2018 turned out to be a quiet year for transactions in Trondheim, and the start of 2019 was no different. So far, a volume of NOK 1.4 billion has been registered.
E.C. Dahls Brewery was sold in Q1 2019 to NorgesGruppen, Kjeldsberg and Heimdal Gruppen. The development site has tenants with short lease terms. It is expected to be rezoned for residential development within two years and sales over a 10-year period.
Several large properties are on the market, but without significant interest from buyers. Storebrand is selling City Syd, Tiller Torget and Ivar Lykkes veg 5 for an estimated NOK 2 billion.
The absence of international players in Trondheim in 2018 will continue into 2019.
Newsec now operates with a prime yield of 5.00%, which is still an attractive yield gap compared to other major cities in Norway.
A total of 123,300 sqm of vacant office space in Trondheim, corresponding to a vacancy rate of 8.6%, which is 0.5% points higher than the previous quarter.
The completion of nearly 70,000 sqm of new office space is expected in 2019, most of which is already fully leased.
There is greater uncertainty about new construction in the future. Only 15,000 sqm are certain; however, the market can gain up to 65,000 sqm during 2020-21.
With newly built buildings, it is expected that increased employment in the future will be able to absorb future floorspace and that vacancy will fall slightly or remain stable throughout 2019/2020, however, new buildings in development could affect the market.
The rental rates on new buildings are competitive with existing high-standard office spaces, which puts pressure on rental rates. This is most visible in the top segment where the rent levels fell somewhat in 2015-2017, before rising again in 2018.