Office markets in the Nordic region are starting to stabilise. This stabilisation is being driven by the economic upturn in the area that has taken hold in 2004. The forecast for GDP growth in 2005 is also positive, with growth expected to be well above 2.0%. This reveals from the latest CBRE office market index.
The investment market in the region is very active. Even though the markets in Denmark, Finland, Norway and Sweden are dominated by local investors and property companies, the increased interest from foreign investors is evident. Investors are being attracted by the recovery in demand and the improving prospects for rental growth. There is concern, however, about the still high level of availability of quite good quality space and as a result developers remain cautious.
Sweden
The investment market in Sweden remains strong, now with greater participation from Swedish investors. Activity in the investment market is expected to continue strong throughout the year. The rental market has in general stabilized after some years of rising vacancy rates and falling rental levels.
The Swedish economy has slowly recovered from the downturn and the international economy is predicted to result in increased demand for Swedish exports. GDP growth is expected to reach 2.7 per cent this year and 3.0 per cent in 2005.
Denmark
The investment market remains strong with increased demand from foreign investors. The rental market is experiencing some pressure from competitive sub-letting, although there are signs of an expected upswing in the market.
The Danish economy seems to have recovered well from the downturn. GDP growth is expected to develop well throughout the year, the labour market seems to have stabilized, and private consumption is strong compared to 2003.
Finland
The investment market in Finland continues strong and foreign investors are still active. The office rental market is stable in Helsinki and Tampere. Activity in the development sector remains relatively low in the Helsinki area.
The Finnish economy is expected to perform positively in terms of growth throughout the year. GDP growth is expected to reach about 3 per cent this year, unemployment figures are developing positively, and the rate of inflation will be low.
Norway
The rental market in Oslo has now reached a stage where rental levels and vacancy rates have stabilized after several years of falling rents and rising vacancies. The investment market has been stable during the year. Interest rates are still
regarded as low and demand for solid properties is high.
Growth in the Norwegian economy is currently high and GDP is expected to reach about 3 per cent this year compared to 0.3 per cent in 2003. There are signs of downward pressure on unemployment figures.
Source: CBRE
