Oslo

Key figures

Q3 2023

The transaction volume has slowed markedly from the record high level of activity in 2021 and at the start of 2022. For the last four quarters, commercial property worth approximately NOK 60 billion has been sold. By comparison, in the record year 2021, sales of commercial property amounted to over NOK 160 billion.

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Offices with a high standard, best location, 7 years weighted remaining rental period, market rent and secure tenants.

Prime Yield

4.75
1.25

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.

Secondary yield

6.00
0.7

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 in one of the clusters along Ring 3 with a normal, good standard and ordinary companies as tenants. As with the other yield definitions, we assume that the rent levels are at market rent level.

Number of transactions> NOK 50 million

Transactions in 2022

(Accumulated)
15

The number of transactions indicates the number of turnovers with a minimum value of NOK 50 million in the Oslo/Akershus area.

Annual transaction volume measured in NOK billion.

Transaction volume

(B NOK)
15

The transaction volume indicates the total value of the properties of the turnovers with a minimum value of NOK 50 million. A minimum of 50% of a property must be traded sold in order for us to register the turnover, and we use base our calculations the value of the share that has been sold.

Office space offered in the market and available within 12 months.

Vacancy

(per cent)
6.5
0.9

The office vacancy rate in Oslo, Asker and Bærum has increased by 0.7 percentage point in the last six months from a record low. In the capital, our figures show that the current vacancy rate is 5.1 per cent, which is still a low level.

Office rental market

Q3 2023

The vacancy rate has crept up again to between 5 and 6 per cent, from the record low rate in 2022. Office space remains scarce in the best central city locations. read more

The vacancy rate is low in the central business district (CBD) areas, and has been for a long time. In the western CBD, which includes Aker Brygge, Tjuvholmen and Vika, the vacancy rate has been between 4 and 5 per cent for the past three years. In the eastern CBD, which includes Bjørvika and Schweigaardsgate, the vacancy rate is now down to a very low 2 per cent. Bjørvika has not had vacant premises in recent counts, but it has been possible to find some vacancies in Schweigaardsgate.

The inner city centre has higher vacancy rates, partly because many properties have undergone major renovation in recent years. This is an area where there are limited opportunities for new construction, and the large renovation projects that are now available in the market are the main reason for the vacancy rate.

In the eastern outskirts of Oslo, Helsfyr and Bryn have moderate office vacancy rates, while Økern and Løren are down to a low vacancy rate of 3 per cent. As recently as three years ago, the new builds Økern Portal and Parallel were finished, built on speculation, and the vacancy rate in the area was 26 per cent. In the latter case, the co-working office space provider Evolve has occupied a large part of the area, but in reality it should be possible to get office space in the building.

In the western outskirts of Oslo, Lysaker has had low vacancy rates in recent vacancy counts, and the vacancy level is now down to 4 per cent. At Fornebu, the situation is more demanding for property owners. The vacancy rate is currently at 9 per cent. Here we also know of office space that will become vacant and come onto the market in the next couple of years, which by all indications will bring rising vacancy rates in the time ahead.

Rental prices continued to rise in 2022, especially in the city centre, and rose by 11 per cent on average for Oslo from 2021 to 2022. Low vacancy rates and little new construction will have a positive effect for property owners. In the outskirts, property owners have filled their buildings, and the high construction costs may eventually push up rental prices here as well. Higher rental prices are now required to initiate profitable projects.

 

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AreasSorter High standardSorter Good standardSorter Office vacancySorter
Lysaker 2500 - 2900 1900 - 2500 4 %
Asker og Bærum 1800 - 2400 1300 - 1800 5 %
CBD West 4500 - 6000 3500 - 4500 4 %
Skøyen 3200 - 4000 2500 - 3200 8 %
Fornebu 1800 - 2400 1500 - 1800 18 %
Outer City Centre 3000 - 4000 2000 - 3000 4 %
CBD East 4200 - 5200 3400 - 4200 5 %
Inner City Centre - - %
Helsfyr/Bryn 2000 - 2500 1500 - 2000 11 %
Økern/Løren 1900 - 2400 1500 - 1900 5 %
Storo/Nydalen 2400 - 2900 1900 - 2400 9 %

Rental prices
Top rent
High standard -
Good standard -
Office vacancy pr. %
Construction ()

Transaction market

Q3 2023

In 2022, we recorded 312 sales worth a total of NOK 93 billion, a decrease in volume of 45 per cent compared with the record year 2021. However, the year was one of contrasts, with the first half being one of the best ever, and the second half being the weakest for many years. Distance between buyers and sellers has characterised the past half-year, and this has resulted in a market with little liquidity. We expect this situation to gradually improve throughout 2023, as agreement is gradually reached on the new price level. read more

Our fresh investor survey in Oslo from the first quarter shows that there is still considerable uncertainty among investors, despite there being slightly more optimism compared with the last survey. While many investors are still sitting on the fence, others are looking for opportunities to buy properties that are rarely available in the market. Among investors, more people than before believe that offices will have the strongest value development of the segments. This essentially relates to the fact that they believe that the yield peak is close for prime property, and that it could become a safe haven compared with some of the alternatives. Investors also believe there will be greater differences, and that the difference between prime and secondary property will increase in the time ahead. We are also seeing a change in investors’ preferences, with a larger proportion than before looking for development and value-add properties with a view to achieving profits. This is in a period when many people believe it will be difficult to achieve good returns on pure cash-flow properties.

 

Last autumn, DNB Næringsmegling adjusted the yield estimate for prime office property in Oslo up by 75 basis points, to 4 per cent. We believe recent transactions support this projection, but there are few benchmarks to go by. The drop in value in 2022 was mitigated by a strong increase in rental prices for central office property in Oslo. We nevertheless expect yields to rise somewhat more in the time ahead, but that prime property will fare better than secondary property.

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