Offices with a high standard, best location, 7 years weighted remaining rental period, market rent and secure tenants.
We assume a seven-year weighted remaining lease period, and therefore estimate that longer leases can be traded even lower.
Offices with ordinary standard, located in one of the office clusters outside the city center, 4-5 years weighted remaining rental period, market rent and ordinary companies as tenants.
Normal yield is meant to reflect an average office property. We have defined it to be an office property with 4–5 years left of the lease contract, an OK location.
Number of transactions> NOK 50 million
The number of transactions indicates the number of transactions with a minimum value of NOK 50 million in Bergen.
Annual transaction volume measured in NOK billion.
The transaction volume indicates the total property value of the transactions made, with a minimum value of NOK 50 million.
Office space offered in the market and available within 12 months.
The office vacancy in Bergen is 8.2 per cent.
Office vacancy rate in Bergen is rising slightly to 8.2 per cent (7.8 per cent), which is roughly the historical average in recent years. However, there are large local variations between the various office clusters. read more
Unchanged rental prices
Despite interest rate increases and more uncertainty in the market, we are still seeing an active rental market in Bergen. Figures from the statistics agency Arealstatistikk show that 63 lease agreements were registered for almost 40 000 square metres in the first half of the year, which is about the same as in the first half of last year.
The average price in Bergen in 2022 has remained approximately unchanged, at NOK 2 050 per square metre per year (NOK 2 030 in 2021), based on 63 lease agreements so far this year. In the top segment (top 15 per cent most expensive rents), however, we’ve seen a decline of 8 per cent to NOK 2 840 per square metre (NOK 3 080). However, this is based on only 10 contracts, so we should be cautious about drawing any strong conclusions from this. It’s nevertheless puzzling that this poll shows only a marginal rental price growth in the A category in Bergen since 2017, while the A category in Oslo has gone up 24 per cent in the same period.
Vacancy rates will rise slightly in the time ahead
The office vacancy rate in Bergen is almost unchanged at 8.1 per cent (7.9 per cent). Of the 210 000 square metres of vacant office space, about half is in the area south of Bergen (Bergen Sør, 11.6 per cent) and Fyllingsdalen (12.5 per cent). Both areas have struggled with relatively high office vacancy rates for some time. In the other areas, the vacancy rate is only moderate to very low. The lowest vacancy rate is found in Solheimsviken/Marineholmen (1.0 per cent).
Going forward, we expect office vacancy rates in Bergen to increase gradually from 8.1 per cent this year to 8.7 per cent towards the end of next year. This largely is largely due to expectations of low employment growth in the coming years. DNB Markets predicts an annual employment growth of 0.1 per cent over the next two years, resulting in very limited demand for office space in the same period. However, low to moderate levels of new construction in 2022 and 2023 will reduce the expectations of an increased vacancy rate somewhat. We expect Bergen to gain approximately 60 000 square metres of new office space in 2022 and 2023 combined.
|AreasSorter||High standardSorter||Office vacancySorter|
|Fyllingsdalen||1500 - 1900||10.4 %|
|Bergen Sør||1300 - 1850||9.9 %|
|Næringskorridoren||2000 - 2800||7.8 %|
|Sentrum||2300 - 3200||6.4 %|
|Sandviken||1400 - 1700||5.2 %|
|Åsane / Bergen Nord||1400 - 1700||2.9 %|
|Laksevåg||1500 - 1800||5.0 %|
|Office vacancy pr.||%|
We are seeing a marked shift in mood among investors. Our recent national investor survey shows that the majority have become significantly more uncertain about the future. Both in terms of activity levels and pricing. The majority also believe yields have already risen, and will increase further in line with interest rate hikes in the period ahead. read more
DNB Næringsmegling has recently revised up its prime yield estimate in Bergen to 4.25 per cent (3.75 per cent). There are few good references in this segment, but it is our clear view that yields will be pushed up given that market conditions have changed so dramatically. However, we believe that the yield increase may be even greater further out on the risk scale. Over time, we’ve seen very high demand for the best properties in Bergen, and it’s not unlikely that some investors will be able to use the turbulence to acquire properties they would not otherwise have had the opportunity to buy.
So far this year, we have seen a normally active year in the transaction market, with transactions amounting to close to NOK 4 billion. This is somewhat lower than we’ve seen at the same time in previous years, but also in line with what we’re seeing at the national level. We’re currently seeing somewhat different expectations among buyers and sellers, and expect that this may result in somewhat lower activity than normal during a transition period.
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Interest rate hikes and market turbulence have resulted in a clear shift in mood among investors. DNB Nærinsmegling has revised up its yield estimates in all of Norway’s four major cities. In the rental market, we are continuing to see a good level of activity in Bergen. The vacancy rate is almost unchanged from the last survey, but we expect to see a slight increase in vacancies.