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Transaction market

The transaction market in Oslo has enjoyed high activity so far in 2019 and the momentum coming off from the end of 2018 has continued into 2019. Pressure on interest rates was not as heavy as feared, and there is considerable product on the market. The volume for the first half in Oslo was NOK 18.2 billion, as compared with NOK 17.6 billion in the first half of 2018.

We have already seen several key transactions in 209, and the largest transaction of the year has perhaps already been completed. SBB decided to sell DNB Midtbygget back to DNB Liv, a building that has changed hands several times in recent years. This is a typical example of a life insurance company once more going directly into real estate instead of issuing property bonds; this is a natural consequence of the most recent interpretation of the SII regulations. However, pure property bonds will not result in less capital being tied up as compared to owning property directly. The net property value was communicated to be NOK 4,488 million. The yield is confidential and calculated on the basis of the gross property value, but it’s not likely to be below the prime yield of 3.75% for office space. A yield record has also been set in Nydalen. Skanska completed Workplace Oo at the end of 2018 and have brought in tenants such as the Norwegian Directorate of Health, Sagene District, Opera Software and Evolve Business Spaces. With solid tenants holding long-term contracts, DNB Scandinavian Property Fund had to pay a total of NOK 1.325 billion for the property. The yield is not known, but Newsec has reason to believe that it is under 4% adjusted for the VAT compensation and TI rents.

In Bjørvika, Carucel Eiendom purchased a third of the area’s ground floor from Madison, which recently acquired the entire ground floor in a major transaction toward the end of last year. Carucel completed the purchase on the same conditions as Madison. Furthermore, BaneNOR Eiendom and Eiendomsspar entered as equal partners into a company that has purchased all the shares in Oslo S Parkering as owners of parking facilities at Oslo S and Asker Station. The total purchase sum is NOK 1 billion, of which 85% of the value is in the parking facility at Oslo S, corresponding to a value of nearly NOK 1.4 million per parking space at Oslo S. The Asker spaces are priced at NOK 275,000 per unit. With a total yield of 4.95%, Newsec’s prime yield for the Oslo parking facility remains at 4.75%.

Rental market

As of the second quarter of 2019 there is approximately 510,100 sqm of vacant office space in Oslo, which results in a vacancy rate of 5.8% as compared with the record high of 8.6% in 2015. This is the first quarter since the beginning of 2017 in which the vacancy rate did not fall, but remained stable. Recent times have been characterised by few completed developments and a high number of conversions. Going forward, more projects are slated for completion and conversions will be reduced. Similarly, Newsec believes in a modest reduction in vacancy based on the recovery pace of the Norwegian economy and the associated increase in employment. Our forecasts indicate that vacancy will bottom out at around 5.6% in 2020, followed by a steady rise towards 6.1% by the end of 2021.


As of Q2, vacancy in the CBD continues to fall and many major contracts have been signed in the last quarter. Presently, there is just under 30,000 sqm of vacant office space, corresponding to a 4.4% vacancy rate. Two co-working interests have signed onto premises here, WeWork and Huckletree (Pier X Venture Hub). The former entered Norway with a total of 11,000 sqm at Tjuvholmen Allè 1-5, Fjordalleèn 15 and Haakon VIIs gate 5. The latter has moved into 1,300 sqm at Bryggegata 3. At Vika-buen, also known as Epleskrotten, the Haavind law firm will move into 6,000 sqm toward the summer of 2022 after Storebrand has performed extensive renovations of the premises. Among the larger vacant areas, we still find Dronning Mauds gate 10 (9,027 sqm) which is in the process of a total renovation, and Hieronymous Heyerdahls gate 1 (3,187 sqm). Støperigata has more vacant area, specifically 2,674 sqm divided between five floors. The building is rented out by Newsec and Gudmund Harlem can be contacted for more information.

The average rent level in CBD has increased by 8% since Q2 2018, and is currently at 3,850 NOK/sqm. There are several competing projects on the high-end. Nevertheless, Newsec expects rent levels to continue to rise in the future as we find there is great interest in the area, and there are a number of buildings being upgraded. Vacancy levels will remain relatively stable throughout 2019 before falling in 2020 as there are no major projects under way this year. The wild-card year will be 2021 once the VIA building is completed. So far, it has by and large been signed tenants who want to move from other buildings in the CBD, and there will therefore be a large supply available. However, Newsec believes that there will always be interest in the CBD, and that the area will have no trouble in absorbing the area that will be available for rent.

Newsec has leased new offices to Kongsberg Gruppen ASA in Støperigata 2 at Aker Brygge on behalf of Norwegian Property

Inner City Center

The Inner City Centre currently has 103,500 sqm of vacant office premises corresponded to a vacancy rate of 4.1%. This rate has remained stable since the previous quarter. In spite of the stable vacancy rate, the inner city centre maintains a high level of activity with several signings. Newsec observes that contracts in Bjørvika are now beginning to mirror that of Vika. Among others, Braathen Eiendom has signed Føyer Torkildsen (3,000 sqm) and Greater Oslo (1,200 sqm) at good market levels in Dronning Eufemias gate 8. Recently, Kvadraturen has become more attractive and Newsec has observed several contracts in excess of 2,500 NOK/sqm. Episenteret (Pilestredet 33) is now fully rented out following a comprehensive renovation. The Visolit IT Group has the top floors, totalling 2,600 sqm. Of the major vacant spaces, we find the newly opened Glasmagasinet, with a total of 10,350 sqm on the 5th and 6th floors. Langkaia 1 and Storgata 26 are still struggling with vacancy, 3,700 sqm and 3,500 sqm, respectively.

Since Q2 2018, rental levels in this part of the city have increased by 9.8% and the average rent is now 2,465 NOK/sqm. The rent has grown steadily since the end of 2016 and Newsec believes this trend will continue in the inner city centre. Some projects will be completed in 2019, but large portions of the vacancies have already been absorbed. The number of square metres has risen significantly in recent times and the pressure in the CBD has spilled over into this district. After 2019, there are few confirmed projects in the absence of vacant plots, and Newsec expects rents to continue to rise and vacancy to remain stable throughout 2019, and then fall towards the end of 2020.

Newsec is letting-adviser for Nedre Vollgate 9 on behalf of Andvord

Inner City

The inner city district is increasing somewhat during this quarter and has a 3.3% vacancy rate for office space, corresponding to 43,000 sqm. The level of activity during the last quarter has been somewhat below normal with somewhat fewer signings, but nothing that Newsec finds worrying. Several smaller areas are rented out, while we have some regulars for larger spaces. At Christian Krohgs gate 10, NAV will vacate its premises and there will be of 5,439 sqm of vacant space. Entra has long advertised 3,000 sqm of office space at Middelthuns gate 29 on Majorstuen. Furthermore, OBOS is now out of Christian Krohgs gate 35, where the infill project will begin once the tenant is on location.

In line will the falling vacancy, the rental level in the inner city has risen recently. However, in the last quarter, growth has tapered off somewhat and is now up 5.5% in the past 12 months; the average rent is now 2,110 NOK/sqm. Newsec believes there will be a slight rise in rent levels beyond 2019, in line with stable to slightly rising vacancy levels.

Newsec congratulates Adecco with their new offices at Skøyen


Office vacancy at Skøyen has come down from high levels in 2017 with a top figure of 10.7%. As of Q2 in 2019, 49,000 sqm of vacant premises are available, which corresponds to 7.8%. Vacancy is falling somewhat from the previous quarter as there is a good deal of interest in the Skøyen Atrium and in buildings on Karenslyst Allè and associated side streets. However, several buildings are still struggling with high vacancy rates, including Hoffsveien 4 (8,400 sqm), Harbitzalleèn 3 (5,600 sqm) and Drammensveien 211-213 (3,500 sqm).

The rent level in Skøyen continues to rise, albeit at a somewhat lower rate this quarter, and is up 4.4% over the past 12 months. Newsec finds that the rent level is high in this area. The area has experienced a formidable rise in rental prices since 2016, especially in the top segment, which tapered off somewhat last year. The best premises can get rents up to 3,600 NOK/sqm, but one does not need to travel far from the main street to find rents as low as 2,500 NOK/sqm. With a lot of development and increased interest in the area, as well as pressure from the city centre spreading out to Skøyen, Newsec believes in a continued rise in rent levels and continued falling vacancy rates in 2019 and 2020.

Newsec has available office space for rent in Lysaker Torg 35 at Lysaker


Lysaker, including Fornebu, is experiencing an increase in vacant space this quarter. Newsec has counted around 104,000 sqm, which corresponds to a vacancy rate of 15.2%. Among other locations, there is a considerable amount of vacant space in NPRO's Fornebu Works at Snarøyveien 36, although some of the space is resolved. MHWirth AS will move into 2,800 sqm at the end of 2019. The PP11 project, which was completed in the previous area, is now fully leased after the top floor measuring nearly 1,600 sqm was rented out prior to summer. The spaces at Drammensveien 260 (9,570 sqm), Professor Koths vei 9 (9,000 sqm) and Drammensveien 264 (9,100 sqm) have still not been resolved since the last time.

Over the past 12 months, the average rent level in Lysaker has increased by 8.6% and the average rent is now 1,985 NOK/sqm. Newsec believes this rent level will increase slightly in the future as there is still a slight fall in vacancy due to the pressure in the city centre / Skøyen and stabilised oil prices. Newsec believes it will take some time before Lysaker / Fornebu gets a real boost in rents. Fornebubanen must be completed, Akers World Ocean Headquarters will face difficulty and there is still a large supply in the area.

Newsec is letting-adviser to Selvaag Eiendom for Maridalsveien 319 in Nydalen


Vacancy in Nydalen has decreased over the past few quarters, and the rate is now back at 2017 levels. As of Q1, the number of vacant office space amounted to 14,730 sqm, which corresponds to a vacancy rate of 3.9%. Regulars can be found in the largest vacant areas. Both Gjedrums vei 4 and 11 went to Avantor (2,690 sqm and 2,435 sqm), Nydalsveien 12B (2,020 sqm) and Workplace Oo, which Skanska just sold (1,896 sqm), linger from the previous quarter; however, all the buildings have rented out parts of their floorspace since the previous quarter.

In recent years, Nydalen has seen a slightly rising trend in terms of rent levels, but is once more experiencing a slight fall this quarter. The average is 1,920 NOK/sqm per second quarter, an increase of 2.5% over the past 12 months. Newsec believes the rent level will increase slightly in the future. A stable vacancy level is expected, as the area has a high level of activity both for residential and commercial development. There are several projects on the drawing board that have not yet been approved by PBE, which may generate an increase in supply in the future. In addition, the Bryn-Helsfyr area is a major competitor.

Newsec is letting-adviser to NCC for Østensjøveien 7


Bryn-Helsfyr has long had a stable vacancy rate of around 13-14%, but that rate has fallen in recent quarters. As of Q2 2019, vacancy is 11.8%, up marginally from 11.3% last quarter. Among others, the Valle Wood project, which was completed before the summer, was fully leased. It is also gratifying to see that construction of Valle View has been initiated after UDI signed for 16,000 sqm in the building. The rent levels should be around 2,200 NOK/sqm without VAT compensation. Aberdeen is expanding and upgrading Brynsalléen 4, where it is leasing over 3,500 sqm over the summer. This is a project featuring the highest vacancy in this quarter. At Brynsveien 14, a new office will be completed by the end of 2019, where there is still more than 7,000 sqm of vacant space. In the award-winning building at Østensjøveien 27, where NCC has its head office, one can now rent up to 5,000 sqm. Newsec has the rental contract, contact Jan W. Roll if interested.

The rent level at Bryn-Helsfyr increased sharply towards 2018 but has recently fallen. The area is undergoing major transformations and several projects are coming to market, so it is natural that the rent level will fall somewhat given such a large supply. In addition, the rent level will be affected by contracts that are signed in the various quarters, as Helsfyr have drawn some business away from Bryn. However, Newsec has observed that Bryn has recently begun to sign tenants at good levels and that rents are rising again in the area. The trailing average is now 1,603 NOK/sqm, a level Newsec believes will remain stable throughout 2019. The area is a good collective hub, but vacancies and tenants who want to wait until more of the area is developed will put a damper on growth in the near future. Among other things, the Brynseng underground station will be upgraded (estimated to be finished in 2022) and the E6 East project is in the planning phase. Newsec believes that new projects will be absorbed and that rents will rise again in 2020.

Newsec is letting-adviser to Tristian and Malling for Ole Deviks vei 2, 4 and 6

Oslo Outer East

In Oslo's outer east side, vacancy is rising somewhat for the first time in over a year, 90,850 sqm corresponding to 10.9%, up from 10% last quarter. There is a lot of activity in the area at the moment, including HasleLinje, Parallel, Økern Portal and more. The first project has filled up the new building at Karvesvingen 3 after the funeral authority (Gravferdsetaten) signed for 1,000 sqm on the top floor. Much of the vacancy in the area will be absorbed, and the number of signed contracts is in line with the previous quarter.

Average rent levels have risen steadily throughout 2018 but have experienced a slight dip this quarter. This is not so worrying in an area with such high activity. The average rents now stand at 1,435 NOK/sqm, up 10.4% from Q2 2018. In the future, around 100,000 sqm will be completed with good projects that will improve the area. However, the large increase on the supply side will dampen rental price growth somewhat, and Newsec believes that vacancy rates will rise slightly before stabilising again towards the end of 2020.

Oslo Outer West

The vacancy rate has remained stable for the past year in Oslo Outer West and is now around 0.8%. Among the properties with the highest registered vacancy in this area, we still find Noreveien 24 with 2,100 sqm, however, this property has resolved 1,400 sqm since last time. Klaus Torgårds vei 3 still has 1,149 sqm, and the same applies to Husebybakken 28B with its 1,000 sqm of vacant office premises.

Average rent levels in Oslo Outer West fell during 2018 but have risen steadily through 2019. Over the past 12 months, rents have increased by 0.6%, now averaging around 1,665 NOK/sqm. Newsec expects a stable vacancy rate, and rents to remain stable or rise slightly, as there are other areas that are grabbing the interest of tenants.