Logistics Market Report Norway // Greater Oslo Area // October 2019 This document is an interactive PDF and you can easily click on the desired page from the table of contents on the next page. You can also use the button on each page to return to that page. This document appears best in fullscreen mode. Exit by pressing esc. PAGE 2 // 66PAGE 2 // TABLE OF CONTENT SUMMARY 4 HIGHLIGHTS 5 MACROECONOMICS 6 Employment market / Interest rate / CPI LOGISTICS MARKET UPDATE 8 OVERVIEW AND DEFINITIONS 10 Prime rent and yield / Vacancy / Areas / Ports LOGISTICS AREAS // NORWAY 13 CENTRE 14 Groruddalen 14 THE NORTHERN AXIS 16 Gardermoen & Kløfta 17 // Lindeberg/Frogner 18 // Skedsmo 19 // Gjelleråsen 20 // Lørenskog 21 THE SOUTHERN AXIS 22 Oslo South 23 // Vinterbro 24 // Ski 25 // Ytre Enebakk 26 // Spydeberg 27 // Vestby 28 // Moss 29 THE WESTERN AXIS 30 Bærum 31 // Asker 32 // Røyken 33 // Drammen 34 // Lier 35 // Tønsberg 36 // Sandefjord37 FORECAST 38 PORTS IN NORWAY 40 PAGE 3 // 66PAGE 3 // Definitions / NORWEGIAN PORTS 41 Oslo 44 // Bergen 46 // Narvik 48 // Porsgrunn 50 // Haugesund 52 // Drammen 54 // Fredrikstad 56 // Moss 58 INTERVIEW 60 Einar Marthinussen, Traffic Director – Port of Oslo GREATER OSLO AREA 2019 SUMMARY 62 / Ports CONTACT // NORWAY 64 LOGISTICS Table of Contents Table Industrial and logistics / Research and valuation NUMBERS & FACTS Summary By Research and Valuation team Norway The logistics sector has experienced a very positive The vacancy rate for all areas is 4.9%. If we take ports. Some of these ports are located in or close market development over the past few years, with out the new areas and compare like for like with the to some of the logistic areas covered in this report, decreasing yields, as well as increasing demand, areas covered in 2018, the vacancy has increased others are further out, but serve as an important rents, transaction volume and investor appetite. Our from 4.8% to 5.4%, meaning that there is about transportation link for the logistics industry in investigation and analysis confirm that logistics still 20 000 m2 more available logistics space this year. Norway. This report will therefore cover the Port are one of the hottest segments in Norway. of Oslo, Bergen, Narvik, Porsgrunn, Haugesund, The transaction volume within the logistic & Drammen, Fredrikstad and Moss. Since 2015 the prime yield has dropped from 6.0%, industrial sector was per October at 10.5 bnNOK, to a current level of 4.7%, which is significantly which is somewhat lower than anticipated. Note Hopefully you will find the report useful and more compared to both the office and retail sectors´ that we do not separate industrial and logistics as interesting, and feel free to contact our logistics yield development in the same time period. Prime we did before, hence we cannot compare this year’s team in Norway, that are here to secure your rent has in the same period been more stable at volume with last year’s all time high of 8,5 mNOK. decision making and accelerating success. 1 250 NOK/m2 until this year, where we have seen We are certain that the lower volume is explained evidences that support an increase to 1 300 NOK/ by lack of objects for sale, rather than a decreasing Enjoy your reading! m2. interest from investors. That is certainly the case regarding foreign investors, which have been In this report we have added further areas that virtually absent this year. we consider to be a natural part of the greater Oslo region. Lindeberg/Frogner, Ytre Enebakk, We have had positive forecasts for the logistics Spydeberg and Røyken are all fairly new logistics segment for several years in a row. The forecast areas close to Oslo with some land available for well correlated with the actual result, when we look development. Tønsberg and Sandefjord are also at the developments that has taken place. We still included, as they are important logistics areas, believe that the logistics segment will continue the and a natural extension of the southern axis. positive trend going forward. Consequently, we cover 20 different logistics areas in this report with a total stock of 4.65 million m2, As a special topic for this year’s report, we have Feel free to download this report directly to your phone. compared to 3.5 million m2 in 2018. chosen to cover some of Norway’s most important Use your mobile camera to scan the code. PAGE 4 // 66PAGE 4 // NUMBERS & FACTS Highlights Logistics Greater Oslo Area PRIME YIELD VACANCY RATE 4.7% 4.9% PRIME RENT TRANSACTION VOLUME 1300nok/m2 10.5 BN PAGE 5 // 66PAGE 5 // / GREATER OSLO AREA 2019 / LOGISTICS TABLE OF CONTENT NUMBERS & FACTS Macroeconomics Norway Statistics Norway is now suggesting that the in employment within construction and several The Central Bank of Norway decided September Norwegian economy is facing a change of pace. service industries, excluding public administration, this year to increase the key policy rate by 0.25 The upturn is likely to be over within a year due to has been strong. It is therefore expected that percentage points to 1.50%. Additionally, they lower international growth. unemployment will be at 3,6% in 2019 and then stated that the rate is likely to remain at this level in increase with 0,2 percentage points until 2022. the foreseeable future. The outlook is that the upturn in the Norwegian The main driver behind this prognosis is lower economy will continue this year as a result of high oil international demand which will negatively impact CPI prices and industrial investments. Simultaneously, the labour demand in the years to come. The consumer price index (CPI) ended up at 2.7% reduced international demand is likely to dampen in 2018. According to Statistics Norway’s forecast, growth in the Norwegian economy as of 2020. INTEREST RATE it is expected that the CPI will fall in the upcoming Overall, this implies that the Norwegian economy According to Statistics Norway the interest level years, but at a lower level than what was previously will remain close to cyclically neutral until 2022. has reached its peak and with a slightly rising forecasted. It is expected that CPI will fall to 2.2% productivity growth and a roughly unchanged in 2019 and down to 1.8% in 2020 before rising GDP growth was 1.3% in 2018, and according to wage growth in the coming years, the inflation will slightly towards 2022. November-November Statistics Norway’s latest update, the GDP growth subsequently remain close to the inflation target inflation, which adjusts most rental contracts on is expected to be 1.6% in 2019 and 3.3% in 2020 until 2022. The weak Norwegian currency level the property market, wound up at 3.50% in 2018. before decreasing to 1.9% in 2021 and 1.4% in will make it unnecessary for the central bank of 2022. Norway to reduce interest rates in the years ahead, despite deteriorating prospects for the international EMPLOYMENT MARKET economy. Lowering the interest rate might become The Norwegian work force was 70,2% in 2018, necessary if the currency exchange rate should and the forward prognosis indicates an increase strengthen against the equilibrium level for the real to about 70,6% in 2020 and remaining unchanged exchange rate. Similarly, there will also be room until 2022. Moreover, Statistics Norway’s to raise interest rates in the future if, for instance, prognosis suggests that the previous significant trade tensions desist and that the consequences drop in unemployment is likely to be over and that of Brexit prove to be not as dramatic as expected. we will see a more stabilised unemployment rate Thus, developments in the international economy PAGE 6 // 66PAGE 6 // going forward. Over the past 6 months the growth could be better than assumed. NUMBERS & FACTS - Gross domestic product // - Forecast - Work force (right axis) // - Unemployment rate 3,5 % 5,0 % 72,5 % 3,0 % 4,5 % 72,0 % 2,5 % 4,0 % 71,5 % 2,0 % 3,5 % 71,0 % 1,5 % 3,0 % 70,5 % 1,0 % 2,5 % 70,0 % 0,5 % 2,0 % 69,5 % 0,0 % 1,5 % 69,0 % Gross domestic product Forecast Work force (right axis) Unemplyment rate - 5 year swap // - 10 year swap // - Key policy rate - Consumer price index (CPI) // - Forecast 5,0 % 4,5 % 4,0 % 3,5 % PAGE 7 // 66PAGE 7 // 3,0 % / 2,5 % 2,0 % 1,5 % 1,0 % 0,5 % GREATER OSLO AREA 2019 0,0 % / LOGISTICS Key policy rate 5 year Swap 10 year Swap Souce: Statistics Norway TABLE OF CONTENT NUMBERS & FACTS Logistics Market Update Norway 2018 was a record year in many ways. The prime yearly of the stock. In 2018 and so far in 2019 it sector counts for 15% of the total volume. The retail yield level broke the resistant 5% level to 4.8%, the has been completed above 250 000 m2 which is market has undergone some major changes over the transaction volume of logistics properties and share a significant increase, but our opinion is that the last years, and we see that logistic properties are of total transaction volume was record high and we demand is still higher than the supply. If the newbuild used as hedging towards retail for many investors. experienced that rents increased in almost all areas activity increases even further, it will even out the that we cover. Along with high investor appetite on the marked and slow down the rent increase. We see that syndicates are the most active on the buy side, we concluded that logistics was the hottest buy side.