Office Snapshot Sweden 2021
Total Page:16
File Type:pdf, Size:1020Kb
OFFICE 2021 SNAPSHOT SWEDEN Q1 I Know A Place OFFICE SNAPSHOT SWEDEN In our Q1 2021 edition of Cushman & Wakefield offering a mix of private offices and shared common Office Snapshot Sweden, we dive deeper into the areas. This type has gained momentum both in flexible office concept. As usual, the current office Europe and Sweden with expanding businesses. market development in Sweden is covered at a submarket level to give you the best insights for In Q1 2021, office yields and rents are more or less the Stockholm, Gothenburg and Malmö markets unchanged compared to the previous quarter. The as well as for the regional cities. effects of the pandemic are mainly reflected in the It has been a year since the first COVID-19 outbreak, vacancy rates, which continue to rise to slightly and some tenants are looking to reduce their office higher levels in Gothenburg and Malmö CBD. space. However, Cushman & Wakefield would like Stockholm CBD remains more or less unchanged on to highlight the risk that this reduction may imply a quarterly basis due to new rentals compensating for future business expansion. When the need for for recently vacated space. Interestingly, newly expansion emerges, it can be problematic to find developed areas with modern office buildings have suitable office premises since vacancies continues in several cases had decreasing vacancies during to remain at a low level. The Information and this period. communications technology sector in Stockholm, According to the latest Cushman & Wakefield which has benefitted from the pandemic, may Swedish Property Investor Confidence Index, real specifically need to consider this. Factors such as estate experts continue to expect a dropping short-term rental decisions and maturing digital demand for office space. However, the outlook is habits open for hybrid office solutions to gain less pessimistic in comparison with all the post- market shares. pandemic surveys conducted in 2020. Flexible office solutions have been on the market This report provides recent updates on the for several years. For decades, business centres Swedish office market as per the end of Q1 were the only option. Now there also are coworking 2021. When in need of more deep level market and hybrids. The hybrid offices are growing rapidly, data, do not hesitate to send us your request. Staffan Dahlén Annika Edström Head of Strategic Advisory Head of What’s Next / Research +46 702 004 478 +46 702 345 925 [email protected] [email protected] STOCKHOLM CBD 3.30% 8,000 SEK/m2 4.5% Tenants are investigating whether GOTHENBURG CBD their office needs are fulfilled or not, in order to maximise the efficiency. The importance of flexible leases is 3.70% 3,400 SEK/m2 4.5% therefore even greater. We can help you find an optimal work environment, that MALMÖ CBD suits your needs. Gustaf Benndorf 4.00% 3,100 SEK/m2 6.5% Head of Tenant Representation 2021 +46 767 203 418 Epicenter [email protected] Prime yield Prime rent Vacancy 2 Cushman & WakefieldQ1 | Office Snapshot Sweden Q1 2021 FLEXIBLE OFFICE SOLUTIONS Reduction of area when signing new rental space and 55% in Stockholm. Malmö has a larger contracts is expected to lead to a shortage share of business centres, 45%. The coworking of space as the pandemic situation eases and market is strongest in Stockholm and Malmö, CO-USING OFFICE SPACE employees want to return to the pre-pandemic both comprising approximately 20% of the total normal office life. This situation, in combination amount of flexible office square meters. UTILISES THE STOCK MORE with limited availability of office space can boost The trend of landlords managing flexible office the flexible office market ahead. EFFICIENTLY AND FULFILLS THE space themselves is unique for Sweden, totalling Earlier, it was foremost start-ups, small to 15% of the operator market in Stockholm based ENVIRONMENTAL, SOCIAL AND medium sized enterprises and freelancers on our latest assessment. The flexible focus that used flexible office opportunities. As the has positive side-effects such as creating more GOVERNANCE (ESG) CRITERIAS. understanding of the concept increases and attractive activities on the ground floor providing benefits become clearer, more and larger tenants the office building and the area with additional are open for the possibility. Global tenants use services, benefits which also may attract people memberships with coworking operators to to return from the ‘pandemic normal’ of working THE FLEXIBLE OFFICE TREND complement business needs with the amount of from home. The same positive outcome can of space needed for specific projects, time frames course also be obtained by an external coworking RANGE FROM RENTAL CONTRACTS or event requirements. operator. Swedish landlords have both started their own concepts and acquired businesses Flexible office solutions are more densely TO OFFICE DESIGN. to enter the flexible office market. Even hotel focused to CBD and the inner-city compared operators such as Scandic has looked outside of to the outskirts of Stockholm, Gothenburg and its core business and expanded into the flexible Malmö. In Stockholm the total flexible office area office market, benefitting from the unique amounts to 325,000 m2, in Gothenburg 50,000 position of having several locations with ready to m2 and Malmö 45,000 m2. Hybrid offices are BUSINESS CENTRES, HYBRIDS OR use premises and services. particularly popular, especially in Gothenburg where it comprises 65% of the total flexible office COWORKING – THERE ARE AVAILABLE SOLUTIONS FOR ALL NEEDS AND BUSINESS CENTER HYBRID PREFERENCES AS THE NUMBER OF Focus on conventional office tenants Diverse focus, mainly large corporations • Floorplan dominated by private • Combined open plan and private LOCATIONS INCREASES. offices offices • High degree of service orientation • Trendy design • Formal business environment • The benefits make this the fastest growing concept How do you create an office environment where employees thrive, work smarter and are COWORKING FLEXIBLE healthier? A great workplace attracts talent and Focus on start-ups and freelancers Focus on small to medium-sized enterprises keeps its employees, both are key for business • Major share of open plan success. Our team can help you find the best • Targeting communication and • Ready to use offices workplace for your needs. collaboration • Fullt furnished with flexibility in lease • Trendy design period • Short transition period Marie Cronström Deputy Head of Sweden Head of Occupier Services Cushman & Wakefield Sweden identifies four different Flexible Office solutions. +46 706 064 110 [email protected] United Spaces 4 Cushman & Wakefield | Office Snapshot Sweden Q1 2021 Cushman & Wakefield | Office Snapshot Sweden Q1 2021 5 OFFICE YIELD DEVELOPMENT 7% TRANSACTION 6% 5% MARKET 4% 3% 2% SWEDEN 201 1 201 2 201 3 201 4 201 5 201 6 201 7 201 8 201 9 2020 Q1 2021 Stockholm CBD Stockholm Decentralised Gothenburg CBD Malmo CBD The transaction volume for Q1 2021 reached SEK 39.6 billion, including the Uppsala Inner City transaction volume for the office segment of SEK 3.7 billion. In total, the domestic investors have been active comprising 75% of the purchasers and 90% of the vendors. International investors who traditionally are strong office INTERNATIONAL AND DOMESTIC INVESTORS IN THE SWEDISH PROPERTY MARKET, ALL SECTORS buyers are perceived as more careful, much due to the uncertainty regarding occupier demand. Domestic buyers with their local presence and knowledge are 100% slightly more optimistic since the leasing market is still active, although slow. 90% The segments which currently are still benefitting from the pandemic situation 80% are residential and industrial (including logistics), which together constitutes for 70% 60% of the total transaction volume during the first quarter. 60% 50% 40% TRANSACTION VOLUME PER SECTOR, MSEK 30% MSEK 250,000 20% 10% 200,000 0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 2021 150,000 Cross Border Domestic 100,000 OFFICE INVESTMENT VOLUME SWEDEN, GSEK 50,000 Q1 2020 - 5.3 7.4 201 6 201 7 201 8 201 9 2020 Q1 2021 Healthcare, Education etc. Industrial Mixed Use Office Residential Reta il Other Q1 2021 2.5 1.2 Domestic Cross Border Interested in discussing the investment Ola Jacobsson market trends? Let us know and we Partner, Capital Markets will give you an update on the latest +46 703 813 260 development. [email protected] 6 Cushman & Wakefield | Office Snapshot Sweden Q1 2021 STHLM STHLM CITY INNER CITY TRENDS MARKET DATA 5% Submarket Average rent, SEK/m² Prime rent, SEK/m² Yield, low % Yield, high % Vacancy rate, % HAGASTADEN CBD 6,200 8,000 3.30 3.75 4.5 Östra Kungsholmen 5,000 6,000 3.75 4.25 2.5 VASASTADEN GÄRDET VÄRTAN & Västra Kungsholmen 3,200 4,000 4.00 4.50 6.5 FRIHAMNEN Södermalm 4,000 5,200 3.75 4.50 4.5 Overall vacancy rate NORRMALM Hagastaden 3,600 4,500 3.50 4.00 5.0 2 ÖSTERMALM Vasastaden 4,400 5,200 3.75 4.25 6.5 3,000m Norrmalm 4,600 5,500 3.50 4.25 5.5 Östermalm 4,500 6,500 3.35 4.00 7.0 VÄSTRA Gamla Stan 4,000 4,800 3.75 4.25 3.5 KUNGSHOLMEN ÖSTRA CBD Gärdet 3,400 4,200 4.00 4.75 6.5 KUNGSHOLMEN Värtan & Frihamnen 3,200 3,700 4.00 4.75 4.5 New supply 2021 TRANSACTIONS GAMLA STAN Submarket Date Property Purchaser Vendor Size, m² Price, MSEK Price, SEK/m² Yield, % Gamla Stan Mar-21 Pan 1 Vasaparken Parts & Paomees 3,200 Conf. Conf. Conf. Gamla Stan Feb-21 Bacchus 1 Brovalvet AB Havsstigen Investments AB 3,000 550 186,000 - CBD Jan-21 Fyrkanten 11 Mitsubishi Estate AFA Fastigheter 7,000 Conf. Conf.