Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting to read:%0A%0A {0} %0A%0A {1}

Norway Real Estate Market View

Hans Petter Skogstad • 5/5/2022

GDP Growth slowing down
GDP for mainland Norway increased by 1.4% in Q4 2021. Growth will be lower in Q1. The registered unemployment rate is at a record low and decreased further to 1.9% at the end of April. Unemployment has not been lower since before the financial crisis in 2008. The shortage of labor limits the possibility of further growth going forward.

Decreased growth in our most important trading partners in Europe as well as increased uncertainty related to the outlook for developments in the US economy means that the forecasts for GDP growth in Norway have been adjusted downwards. This year, a growth of about 3½% is expected, which may fall to about 1½% next year.

Increased oil & gas prices contribute to increased inflation, but also provides a strong increase in Norway's total export revenues.

Norges Bank - first mover in interest rate hikes
Inflation ended at 4.5% in March. High energy prices are still driving up inflation. High oil and gas prices mean that electricity prices will remain high in the near future.

Norges Bank's inflation target is 2%. Underlying inflation has been at the target of 2.0% in both February and March. Rising inflation among our trading partners and a tight labor market mean that underlying inflation is expected to rise.

Norges Bank has raised interest rates three times since the zero-interest rate during the COVID-19 pandemic. The interest rate is now 0.75% and Norges Bank has announced 3 more increases this year and 4 next year. The key policy rate could end at 2.5%, going into 2024.

The increase in long-term interest rates in the United States has led to a corresponding increase in Norway as well. 5 and 10-year SWAP interest rates are now about 2.9% and have been around that level throughout April.

CRE Markets
The high transaction volume continued in Q1, which was the best first quarter since 2017. The second quarter has started calmer but considering all the objects that are out in the market, we expect continued pressure towards the summer. Nevertheless, we are noticing a different market than this autumn, with greater uncertainty around financing and global macro conditions.

Strong office market in the first quarter. The Oslo office vacancy was 6.75% by the end of 2021 and has seen further declines in 2022, decreasing to 6.5% vacancy in Q1 and 6.25% by the end of April. Rent levels increased moderately by 3% in Q1 (y / y).

Strong growth in construction costs will contribute to postponing some construction projects and increase rental prices through renegotiations that involve adaptations of existing premises.


10 March

The Russian attack and the war in the Ukraine have dominated the headlines after two years of COVID-19 and restrictions. It has been three weeks since all restrictions was lifted, and it feels like an eternity. Life is back to normal in Norway, but the reality of war is steadily moving closer. Yesterday the first busses filled with refugees arrived in Norway. It looks like the war will last longer than first anticipated. War spreads uncertainty and affects the broader economy as well as the CRE markets. 

Economic Growth

The war in the Ukraine arrived as the Norwegian economy is experiencing strong growth and the unemployment rate is falling. The share of unemployment has not been as low since before the financial crisis in 2008. Increased electricity prices pushed inflation above 5% late in 2021. The Norwegian Central Bank fears high wage-demands in this year’s wage settlement, starting a wage-price spiral. The key policy rate was increased twice before new year and is currently at 0.5%. It is expected further rate hikes in March and 2 - 3 further increases during 2022. The war in the Ukraine has fueled oil and gas prices to record levels. The increased prices provide the Norwegian sovereign fund with increased income but provides negative effects through increased price and costs for our European trade partners. 

CRE Markets

The transaction volume totalled to a record high NOK 168 billion in 2021, and the activity has been high thus far in 2022 as well. Investors are particularly positive towards logistics and offices, but more investors are also looking towards hotels. Thus far we have not experienced any transactions that have been stopped by the consequences of the Ukrainian war. The amount of office workers increased in record-setting pace in 2021. The Oslo office vacancy was 6.75% by the end of 2021 and has seen further declines in 2022, totaling to 6.5% vacancy in Q1. Rent levels increased moderately by 2% last year. We expect stronger growth in 2022, especially in the city center of Oslo. 

COVID-19 status
All COVID-19 restrictions were removed in the middle of February. Many have been infected over the last couple of months, but the number of severe cases was never as comprehensive as the Government feared. Now, everyday life is continuing mostly at pre-pandemic levels with increased restaurant-visits, concerts, theatres, sports etc. The largest difference is that the use of public transport is still 20-30% lower than pre-pandemic levels.


11 January

COVID-19 status
After a couple of months of freedom, new restrictions were introduced in December following the first warnings about Omicron. Prohibition on serving alcohol, reintroduction of at least 1 metre distance and restrictions on the number of guests / visitors were the most important. The pace of vaccination has been sharply increased. Now almost everyone over the age of 65 has received the 3rd dose, and everyone will have received an offer during January / February. The effort has yielded results. The number of hospital admissions has exceeded the peak and has decreased so far in January. The Government has announced easing of the restrictions from Friday 14 January.

Economic Growth
Even though restrictions were reintroduced in December, the proportion of registered unemployed in Oslo increased from only 2.6% in November to 2.7% in December. The shopping centres increased turnover by about 7% on a national basis compared with December last year and set a new turnover record for December. There was strong economic growth before the restrictions were introduced. The experiences from December indicate a slowdown in growth, not a decline. Inflation in December ended at 5.3% (year-on-year), driven by strong growth in electricity prices. Inflation ex electricity prices shows an upward trend and ended at 1.8% in December. Norges Bank is concerned about rising inflation. The key policy rate has therefore been increased twice this autumn to 0.5% and 3-4 more increases are expected during 2022, next time in March.

CRE Markets
The real estate markets have proven very robust during the pandemic. 2021 was a record-breaking year in the transaction market with a total volume of approximately NOK 160 billion. Due to the high activity in the last quarter, several sale processes were pushed into 2022. We expect the high activity to continue in Q1. The logistics segment is still very hot, pushing the prime yield from 4.25% to 4.0%. Logistics properties attracts great interest from all type of investors, both domestic and foreign investors. The office market is doing well, with record high search activity, low new construction, decreasing office vacancy and reports of rental growth in new leasing contracts. Office vacancy in Oslo ended at 6.75% in 2021, while we expected 7.5% at the beginning of 2021. The reopening showed that downtown shopping, restaurants, and hotels will quickly return as restrictions are lifted. The number of guest nights in hotels was as high in November last year as it was in November 2019. The restaurants experienced record sales before new restrictions were introduced. Several leases were entered at high rental prices in the best locations in Oslo. Prime rent for retail thus increased after a longer period without any major known leases.

14 Dec

COVID-19 status
COVID-19 is back, and some national restrictions have been reintroduced as a result of strong growth in the number of infected and admitted COVID-19 patients in hospitals. Stricter rules have been introduced for entry as well as various restrictions and recommendations that will affect Retail and F&B. Most people who work in offices in the larger cities follow the call to work from their home office. This also applies to our office. 83% of the adult population has taken 2 vaccine doses, and all will be offered the 3rd dose during the first quarter of 2022. Nearly half of those over 65 have already taken the 3rd dose. Nevertheless, the number of hospital admissions is increasing, but half of those admitted come from the small minority who have not received any vaccines.

Economic Growth
The latest figures for activity in the Norwegian economy show that GDP is some 3% higher than before the pandemic, and the proportion of registered unemployed is down to 2.1%. Lack of labor slows further growth. CPI growth ended at 5.1% in November. The strong growth is almost only due to particularly high electricity prices compared with November 2020. CPI ex electricity prices increased by a more modest 1.3%. The strong pressure in the economy will probably lead to Norges Bank increasing the key policy rate from 0.25% to 0.50% on 16 December. The recent growth in infection has led to some uncertainty, but we believe that low unemployment requires raising the key policy rate from today’s low ‘crisis level’.

Hot CRE markets
Retail and F&B are hardest hit by the new restrictions. The reopening this autumn has resulted in strong growth in F&B, but activity now in the most important three weeks before Christmas will be sharply reduced. But shopping has held up well so far during Advent. In the last months we have landed several good and large lease contracts in the Retail market. The office market is doing well, with record high search activity, low new construction, falling office vacancy and reports of rental growth in new leasing contracts. The transaction market has already passed the record level from 2021. So far, the transaction volume is €14 billion, helped by a record-breaking transaction. It is the listed office rental company Entra that has bought a company for €1.3 billion. Cushman & Wakefield Realkapital has also landed a large transaction of €0.23 billion. We still find all segments attractive but see the most price pressure in logistics. Our estimate for the logistics prime yield is adjusted down to 4.0%. We are optimistic about the CRE markets for 2022. Merry Christmas and a happy New Year from Cushman & Wakefield Realkapital!


16 Nov

In Norway, all national COVID-19 restrictions have been removed. Rising numbers of hospital admissions have led to local COVID-19 measures, but not in Oslo. The Norwegian economy is experiencing strong growth. GDP was 2% higher than before the pandemic already in August. A further boost to the economy came when national COVID-19 restrictions were lifted towards the end of September. Trade and not least dining and nightlife are back in full swing in central Oslo. Restaurants and many hotels are fully booked towards the Christmas table season. 

The proportion of registered unemployed in Norway fell from 2.7% in August to 2.1% in October. Lack of labor has now become the biggest obstacle to further growth in many companies. The tight labor market is an important reason why Norges Bank increased its key policy rate from zero to 0.25% in September and announced a further increase in December and three next year. The number of jobs in office-intensive industries in Oslo was record high in the third quarter and was as much as 3.5% higher than in the third quarter of 2019. 85% of office employees are back in the office, and the larger companies are trying different models for use of home office. Office vacancy in Oslo is declining and is now at approximately 7% against 7.25% this summer. Office rental prices in the third quarter were about 5% higher than a year ago.

The Norwegian transaction market is heading for a record-breaking volume in 2021.The activity is high in all segments, including retail and hotel. Foreign investors are about to return to the Norwegian market after Covid making it difficult to cross borders. Ongoing structural processes shows that yields are under pressure, despite increasing financing costs.


25 August

Half of the population over the age of 17 have now been vaccinated, and 70% have received at least one dose. Everyone will be offered the vaccine before mid-September. The vaccination rate so far has been over 90%. With this good news, all restrictions on COVID-19 will be removed during September. The Norwegians are finally returning to a normal life.

Employees in many smaller businesses are back in the office. The subway is starting to fill up in the rush hours. Domestic air traffic is at 80% of the level from 2019, while foreign air traffic is still 80% below the 2019 level.

There is strong growth in the Norwegian economy. The GDP level at the end of the second quarter is now on a par with February 2020. Norges Bank has announced a 25 bp increase in the key policy rate in September. The key policy rate has been zero since May last year.

Office rental prices in Oslo rose sharply in the second quarter to good volume. The increase came after a fall in the first quarter. The trend is moderately positive.


14 June

Step two in the reopening of Oslo was introduced on 19 May. 

Together with the sun and heat, it gave the feeling of the ‘old days’.  

Restaurants, bars, gyms etc. were reopened after being closed since November.  

There are still restrictions on distance and restaurants are not allowed to serve alcohol after 22:00. 

Working from home is still mandatory, but several have started working from the office in smaller private companies.  

The number of passengers on public transport is now 75% of normal, compared with 35% two months ago. 

This week, 30% of the adult population in Oslo are fully vaccinated and 40% have received their first dose. The plan that all adults be offered the vaccine by August seems achievable. 

Increased activity has led to a sharp fall in unemployment.  

In Oslo, the share of completely unemployed was measured at 6.3% in April, 5.2% in May and 4.5% one week into June.  

Before the month is over, unemployment will fall below 4% in Oslo. 

Unemployment was 2.5% in February last year and peaked at 13.5% the following month. 


25 May

For the second year in a row, there was no big celebration of our national day on 17 May. Normally, many thousands of people gather in the centre of Oslo to watch the children's train and perhaps get a glimpse of the King and Queen. The number of infections has decreased markedly. Downtown shopping and shopping malls are open again in Oslo. There are still strict measures with closed restaurants, bars, gyms etc. Working from home is still mandatory. If infection rates remain low, there will probably be new relief from next week. 

Now 2.1 million have received their first vaccine and the vaccinations are going according to plan. With that, 40% of the adult population have received their first vaccine. More than 90% of those who have been offered the vaccine have said yes. The immunity of the population will thus be strong when all are offered vaccines. The plan that all adults should have been offered the vaccine during the summer seems to hold. 

The strict measures introduced from the New Year led to a decline in GDP of 1% in the first quarter. The easing in recent weeks has, however, reduced unemployment on a national basis from 4.4% completely unemployed in January to 3.6% last week.


20 April

Spring has arrived in Oslo and we have had a sunny weekend where many have gathered in parks and outdoor areas. The infection rate is dropping and the number of vaccinated is rising. There are still strict measures in and around Oslo, but we expect a cautious relaxation in the measures in the coming weeks. After all, infection rates in Norway are low (160 per 100,000 inhabitants) and GDP for 2020 ended only 0.8 per cent down from 2019. Few countries have had such a small decline. 

1.5 million people have received their first vaccine and the vaccinations are going according to plan. With that, 35% of the adult population has received their first vaccine. The availability of vaccines is still uncertain, but the plan that all adults should have been offered the vaccine during the summer seems to hold. 

There are still strict measures with closed shopping malls, shops, restaurants, bars, gyms etc. Groceries and pharmacies are the only ones allowed to stay open. Home office is mandatory for everyone. 

We received fresh figures for the development in office rental prices this week. After a strong rise in the 4th quarter last year, the figures now show a decline. The trend seems to be flattening out. It will be exciting to see the development when the offices reopen fully from August.


9 April

Everyone in Norway is waiting for the vaccines to reopen society. Infection rates are rising, and the media is full of negative news. But, after all, the Norwegian infection rates are comparatively low at 200 infected per 100,000 inhabitants.

Five percent of the population has received 2 vaccine doses and another 8% has received their first. Vaccination has been slower than an impatient population would like, but the Norwegian health authorities maintain that the entire adult population should have been offered the vaccine by July or perhaps even sooner.

As a result of the situation, strict measures have been introduced in and around Oslo. Travel activity is at a minimum and there are few people out on the streets in central Oslo. All shopping malls and shops are closed. Groceries and pharmacies are the only ones allowed to stay open. Home office is mandatory for everyone. All bars and restaurants are closed as only take-away is allowed. All other indoor facilities and outdoor activities are also closed. All schools with students from the age of 11 (level 5) and higher are closed and have online learning. Kindergartens and schools with the youngest pupils may be open under particularly strict conditions. The measures will last beyond the Easter holidays.


26 January

Norway has among the lowest infection rates and the lowest proportion of deaths from COVID-19 in Europe. Nevertheless, last Saturday (23 January) Oslo introduced the strictest measures so far during the pandemic, because several cases of the mutated ‘British virus’ were discovered last week.  

All shops are closed. Groceries and pharmacies are the only ones allowed to stay open. Working from home is mandatory for everyone. All restaurants are closed, only take-away is allowed. All other indoor facilities are also closed. Schools and kindergartens may be kept open under special infection control conditions. All sports activities will be closed. These measures will last until the end of January. 

Vaccines are now being rolled out and 1.5% of the population has been vaccinated. The plan is to vaccinate all adults before the summer holiday. 

In contrast, the statistics based on signed leases, show that office rents increased sharply in Q4 supported by high volume. Office rents are now 3% higher than a year ago. The transaction market was also recorded as strong in Q4 and continues with many processes running into the New Year. Vaccine optimism is also reported in the retail market.


12 September

Norway has gone through its second wave, but it’s a mere swell compared to the storm many European countries have experienced. Norway has only suffered 353 deaths due to the virus. The second wave hit mostly the cities of Oslo and Bergen, but the infection rates are declining going into the Christmas season.  

In Oslo, stores are open, but some restaurants and hotels are closed due to the lack of guests. To limit gatherings and reduce general mobility, indoor gatherings are forbidden. This includes cinemas, theatres, gyms etc. Masks are mandatory in crowded public places and also on occasions where it is not possible to keep a 1metre distance between people. The Government encourages working from home, and most are following this. 

The economic recovery was strong towards the summer. In September, GDP was only 2.7% behind February levels. New restrictions will limit the recovery. Vacancy declined from 10.7% in April to 3.4% in October. As of 1 December, the vacancy rate is at 4%. 

The transaction market is booming after many large transactions this fall. The volume is closing in on 100 bNOK and will probably pass 2019 levels. Prime yield has dropped from 3.4% to 3.25% after several transactions at this level. Office rents have decreased with 3-5% from the top in January. We are approaching Christmas with better prospects than for a long time. 


8 July

The number of COVID-19 cases are once again rising globally, but here in Norway there are still low rates despite increased activity and people enjoying the lovely weather. We are also worried about the global uncertainty which can lead to a fall in Norwegian exports and weak GDP development during the autumn. 

In Norway, unemployment fell further to 5.1% last week, and for the second consecutive month the Consumer Confidence Index rose. The index rose to the highest level since July 2019 (-0.8 points). The index of retail sales for May was released last week. The index showed ‘all time high’ with 2.8% sales growth in April and 7% higher than in February. The e-trade sub-index is now 27% higher than in February. The hotel industry is still struggling. High occupancy rate is reported in tourist areas in Northern Norway (Lofoten) and in Western Norway, while the occupancy rate is about 20% in the larger cities. 

Several commercial real estate transactions are again made towards the Norwegian summer holidays. Nevertheless, the volume is currently at about 70% of the volume at the same time last year. Recent transactions show that the yield on modern and centrally located properties with solid tenants is at the same level as before COVID-19. This week is the last active week in the Norwegian market before commercial real estate takes a summer vacation. We all wish you a good summer - we are back in August. 


25 June

This summer most Norwegians will travel within Norway, not sunny Spain or Greece as we are used to. Fortunately for us, the heat came to us last week with several days above 30 degrees Celsius. We cannot say that the economy is as hot as pre-corona, but the unemployment rates continue to decline. The unemployment rate was last week at 5.4% and we expect this to decline below 5% by the end of June. An increasing amount of optimism and adjusted forecasts is followed by signaling from the Central Bank of Norway that they may increase the Norwegian policy rate by the end of 2022. The rate is for now kept at 0%.  

The activity within commercial real estate is increasing. June is normally a month with a lot of signings. In 2020, the volume will likely be lower within both transactions and letting. Veidekke, a large Norwegian construction firm has separated its portfolio of real estate for construction and sold it for a sum of €0.8 billion. Cushman & Wakefield Realkapital has also completed some minor transactions of buildings with rental housing. The demand for housing is high and it is expected that housing prices will increase in June. This is one of the reasons why the Central Bank of Norway has signaled the possibility for an increase in the policy rate.


18 June

The Norwegian COVID-19 infection numbers are still low (less than 10 confirmed cases a day), resulting in a low amount of deaths. Norway is among those countries with the least deaths per capita in Europe (4.5 for every 100,000 residents). The economic activity is rising, and unemployment continues to decline. The unemployment rate was last week measured at 5.7% which is close to half of that measured at the peak at the end of March.  

The growing activity also affects commercial real estate. We are experiencing increased activity on the transaction side, but there are still a low number of transactions being completed. Nonetheless, several processes have been restarted, and we expect high transaction volumes when Norwegians return from their summer break in August. 

Last week there were reports of increasing infection numbers in the Unites States with subsequent turmoil and fall in stock prices worldwide. The Norwegian infection numbers have not increased despite the significant rise in activity and mobility within the population.  

With less to worry about at home, our focus is elsewhere. The development in global trade, the trade war between the United States and China, the financing of Corona-losses, Brexit etc. will have increasing effect throughout the Autumn. As for now we are enjoying the much-awaited summer. 

11 June 

The number of new COVID-19 cases in Norway is low, at around 10 cases a day. Over the last weeks we have even had days without new admissions to hospitals. There is only 238 confirmed deaths due to COVID-19 in Norway, and the positiveness from the latest development has changed people’s behavior. An increasing number of people are traveling to the office, the streets of Oslo are experiencing increased traffic and the turnover in stores is increasing. Even though this is the case, everything is not back to normal. There is a decrease in the use of public transport, an increase in the use of cars, there are no tourists in the streets, and we do not shake hands. At our own offices we run a 50/50 strategy, where half of the workforce is allowed at the office while the other half works from home. We are having customer meetings at the office but we experience that some customers prefer digital meetings. 

The Norwegian economy is steadily improving, and the perception of a crisis is low. Newly published statistics show that the Norwegian housing market has bounced back from the decrease in March and April. The prices are now 2.5% higher than May last year. A large driver for this is the decrease in mortgage rates, decreasing from 3% in February to the 1¾% we have today. Unemployment rates are also falling drastically.  
The positive development is also experienced in our own line of work with increased activity both for our Capital Markets department and our rental department. In 4 weeks, the Norwegian summer vacation sets in and we expect that a low number of contracts will be signed before then, but we are looking forward to a hectic opening when we are back in August. 

The Norwegian unemployment rate is continuing its decline and measured 6.4% by the end of May. The unemployment rate peaked at 10.7% at the end of March from a low of 2.3% before the COVID-19 measures were implemented. We expect unemployment to continue its decline in the weeks to come as the economic activity continues to normalise. 

Retail sales came in at an all-time high in April when large parts of the service sector were closed. The seasonally adjusted volume index of retail sales increased by 4.8% from March to April 2020. This follows a decrease of 0.9% from February to March. The largest contribution to the growth in the overall retail index was stores selling building materials, followed by stores selling sporting equipment and boats. Other sectors who experienced growth were clothing stores, flower shops, e-commerce and furniture shops. E-commerce increased its sales by 16.8% in the period. 

The bank margin has increased drastically and is currently on its highest since 2014 according to a new bank survey (source: Union). For new 5-year loans at 65% loan-to-value the average margin was 248 basis points in the second quarter of 2020. At the same time the uncertainty makes banks increasingly selective on loans and solid tenants are necessary to achieve good conditions. The 5-year swap rate is down 150 basis points this year, which makes large and secure borrowers achieve a total loan cost of record low 2.9%.  


28 May

The Norwegian unemployment rate is continuing to decline and measured 7.1% by the end of last week. The unemployment rate peaked at 10.7% at the end of March. We expect unemployment to continue its decline in the weeks to come as economic activity continues to normalise. 

The transaction market took a hit when authorities announced the lockdown in March. However, most large transactions are still ongoing, but will not be closed in Q2. Estimated numbers show that the volume of H1 will be approximately half of 2019 (NOK 20 billion vs NOK 40 billion). Our latest investor survey shows that investors believe that transaction volumes will be back at 2019 levels in 2021. 

We have recently completed a tenant survey among our customers. The survey shows that 54% expect to be back in normal operating activity before the 4th quarter of 2020. A majority (63%), expect smaller changes in the way offices are used. The most significant change is the increase in and normalisation of digital meetings. Furthermore, the flexibility of contracts and office solutions will be increasingly important. The big question is if COVID-19 will affect the required square footage. Our survey shows that 60% expect no change in their needs and 26% expect that their need for offices will decline.


21 May

In Norway, we celebrated our National Day on Sunday, 17 May. In Oslo's main street there is normally a parade of children with flags to greet the Royal family in front of the Royal Palace. This year the street was empty, and the King and his family drove around Oslo in an open car. Restaurants were open, but few tables were booked. The value of footfall was fully demonstrated. Daily figures for payment card usage shows that sales from F&B fell by approximately 80% (compared to the same days in 2019) when the COVID-19 restrictions started on 12 March. Between 1 and 15 May, the fall was reduced from 60% to 35%. On the other hand, DIY sales have been on average 30-40% higher than last year. 

Registered unemployment continues to decline. While it was at 2.3% in February, it rose steeply to 10.7% by the end of March. Now the rate is 7.8%. 

Inflation was measured at 0.8% in April, aided by record low electricity prices. The record low price of electricity will not continue. On top of that the exchange rate of EUR/NOK has fallen by 10-15% since February. A rate at this level will lead to increased import prices. We may see inflation at 3% by the end of the year. In Norway we have inflation-adjusted leases - another good reason to invest in CRE. 


14 May

Norway is continuing to reopen, as the Norwegian economy is recovering from its low point in April. This week the Government announced that all secondary and high schools will open before 15 May and on 1 June amusements parks can reopen. Several cinemas have stated they will reopen this week, complying with the maximum crowd rule of 50, increasing to 200 by 15 June. From 15 June fitness centres will reopen, as well as professional football leagues.  

It was expected that housing prices would take a hit in April, but the prices were unchanged for the month. The decline in mortgage rates and comprehensive public support for the ones hit by COVID-19 measures have helped with keeping the housing prices up. For foreign readers we can confirm that 82% own their own residences and are therefore free to sell.  

The Norwegian Central Bank set its policy rate to 0% (0.25%) for the first time on 7 May. Furthermore, the Central Bank stated that they believe the interest rates will remain at this level until the end of 2023. The rate on 10-year government bonds fell from 0.9% on 13 March to 0.4% on the 7 May. The decline in long government bonds as well as a functioning credit market makes us less prone to an increase in prime yield. On the contrary, it has opened opportunities for a decline in prime yield. 


7 May

In Oslo, the activity slowly begins to return to normal. Two major changes have been made by the authorities this week.

  1. Recommended distancing was reduced from 2 metres to 1 metre. This will make it easier to return to the office.

  2. Events with up to 50 people participating will now be allowed. This is positive for cultural institutions and Food & Beverages. Some cinemas will open this week.    

Registered unemployment dropped from 10.7% by the end of March to 9.4% by the end of April. We expect a further decline in May as activity increases.  

Office search-volume in the first four months was 84,000 sq m in Oslo. The number was significantly lower (49,000 sq m) in the same period last year. There have been several major office searches since the COVID-19 restrictions were introduced.  

Last week we got the results from our extraordinary (COVID-19 edition) investor survey. The results will be published this week. The survey shows that 60% of the investors plan to increase their portfolio in Norway in the next 6 months. Furthermore, half of the investors are ready to consider specific investment opportunities at this moment. This means that the transaction volume can pick up quickly when buyers and sellers have the same expectations.   


30 April

According to the Government the COVID-19 outbreak is under control. The number of hospitalised in Norway continues to fall and has not been lower since 20 March.  

Last week Norway began to reopen kindergartens. According to school leaders the opening went well. This week primary schools will be allowed to reopen across Norway for children between the ages of 6 and 11. Personal services like hairdressers, physiotherapists etc. will also open this week.  

All major festivals and concerts this summer will be cancelled. The Government announced that no events of 500 people or more will be allowed until 1 September.  In Oslo, the ban on serving alcohol in pubs will be lifted at the beginning of May meaning the pubs will be able to serve during our National Day on 17 May.  

Preliminary figures by Statistics Norway shows that GDP fell by 6.4% in March. Accommodation and food services experienced the largest decline (-30%).  

Brent spot was under USD 20 last week. Low oil prices mean lower oil investment and activity. However, the oil activity is not as important for the Norwegian economy as in earlier downturns. Less than 5% of all employed in Norway work directly or indirectly in the oil business. Recent forecasts predict that the fall in oil investment will not reduce GDP by more than 0.3 percentage points this year and next.


23 April

The COVID-19 outbreak still seems to be under control according to the authorities. There has been a fall in the number of infected people in the last 3 weeks. However, by gradually easing the restrictions there will be setbacks of daily increases. Hopefully we will find the balance between increased activity and controlling the spread. To keep a 2 metre distance from others will affect the openings of offices , retail, F&B and hotels

This week the health authorities launched an app to help limit the transmission of coronavirus. Anonymised data about movement patterns in society from the app are used to develop effective infection control measures. It will then be possible to monitor even more closely whether the measures are working, and whether infected people are in close contact with more people as society eases the measures and restrictions. 

About 60% of all office workers were still working from home in the first week after Easter. In Oslo, the share is as much as 75%. Surveys says that 80% find it more difficult to work from home. The opening of kindergartens this week will make it easier for some of them. 

The hotel industry is now focusing on domestic customers in the next months. Hopefully the borders to Sweden, Denmark and Finland will open towards the summer. The sharp fall in the price of NOK means that Norway now appears very favorable as a holiday country. 

Shopping centres revenues fell by 19.5% from February to March. The fall was expected as the measures against the spread of COVID-19 started at the end of the second week in March. 

Office rents were on average unchanged from Q4 2019 to Q1 2020. The figures may indicate that the prime premises peaked in Q4. IMF forecast a fall in Norway's GDP of 6.3% this year after a growth of 1.2% last year. 


April 16

This Easter was different from usual in Norway. Normally most of us are heading to our holiday properties, but this year we all had to stay at home.  

On 8 April, the Government presented a plan of gradually lifting the lockdown. Children’s day care centres, primary school classes for pupils in years 1-4 and out-of-school care programmes will re-open, and towards the end of April, the Government will lift the ban on people staying at their holiday properties. Hairdressers and other businesses where there are one-to-one contact, will be allowed to resume operations if they follow the requirements for infection control measures. The changes will be brought in gradually, starting from 20 April. 

As the Government eases the restrictions gradually, we will also start the process of re-opening our office in Oslo. Infection control guidelines will be strictly followed.  

Several retailers which have been closed over the last weeks have announced that they will re-open. Norwegians will probably have to stay within the country this summer. Hotels and leisure are experiencing a major increase in number of bookings for the summer holiday. Registered unemployment is highest in tourism and transport, with 26.9% of the workforce registered as fully unemployed. Secondly, managers and retail, respectively, 16.8% and 16.7%.


9 April

We are now entering the fourth week of COVID-19 measures. The measures seem to be working. The number of new confirmed cases is declining and so are the number of people being hospitalised. This week is the national Easter holiday, and usually many of us usually spend time at our cabins, but this year, we are not allowed. Yesterday, the Government released an update about the situation and presented a plan to gradually lift the lockdown later this month.

Registered unemployment has increased from 2.2% in February to 10.7% in April. The sum of people registered as fully and partly unemployed has reached 412,000 people, or about 15% of the labour force.  

Sectors such as travel and transport have been hit particularly hard, but we note that the service sector in general has been deeply affected by the coronavirus crisis.  

House prices fell by 1.4% from February to March, and the number of dwellings traded was 14% lower than in March 2019. The decline was expected, and we believe rate cuts and lower volumes made the fall less dramatic.  

A compensation scheme will provide compensation, for a period, for some of the unavoidable fixed costs of companies severely affected by infection control measures. The companies must document a fall in turnover of at least 30% in March. The feedback is mainly positive. 


2 April

According to the Government social distancing measures are working and there is still sufficient capacity to handle an increase in infected people. The authorities have given themselves a new deadline until Easter to consider a new strategy and potentially renew or change restrictions. It is expected that schools and kindergartens will partially open after Easter.  The registered unemployment rate has risen from 2.2% in February to, currently, 10.4% (S.A.). We would not be surprised to see the registered unemployment rate reached 12-13% in March. The authorities are offering a financial assistance package for businesses most affected by the lockdown (retail, F&B).   The Ministry of Finance has so far presented financial measures amounting NOK 310 billion and we expect more to come. Estimates at the beginning of last week indicate a fall in GDP of 2-4% depending on how long this situation will last. New estimates at the end of last week indicate a fall in GDP of 3-10%.   Several major oil companies have already announced cuts in oil investments, so far 20%. M&A’s are put on hold in all markets, not only CRE. Many of our clients are ready to invest when the time is right.  


Prague, Czech Republic
Research • Economy

Czech Real Estate Market View

A regular update on the commercial real estate market in Czech Republic.
Marie Baláčová • 4/27/2023
Bratislava, Slovakia
Insights • Economy

Slovakia Real Estate Market View

A regular update on the commercial real estate market in Slovakia.
Lukáš Brath • 3/16/2023
Germany Market View
Insights • Economy

Germany Real Estate Market View

A regular update on the commercial real estate market in Germany.
Helge Zahrnt • 1/3/2023
Looking out over Buda castle, Budapest
Insights • Economy

Hungary Real Estate Market View

A regular update on the commercial real estate market in Hungary.
Edit Jakab • 1/1/2023
couple with face masks on Milan street
Insights • Economy

Italy Real Estate Market View

A regular update on the commercial real estate market in Italy.
Raffaella Pinto • 9/23/2022
Rue Sainte-Catherine, Bordeaux, France
Insights • Economy

French Real Estate Market View

A brief bi-weekly update on the French commercial real estate market.
Christelle Bastard • 9/23/2022
Insights • Economy

Spain Real Estate Market View

A regular update on the commercial real estate market in Spain, reflecting all our service lines: Offices, Industrial, Capital Markets Group, Retail and Hospitality.
blue duotone graphic of people in office
Insights • Economy

EMEA Markets View

Our EMEA local market research colleagues share the latest real estate market views from their countries.
Carros eléctricos, Lisbon, Portugal
Insights • Economy

Portugal Real Estate Market View

A regular update on the commercial real estate market in Portugal.
Andreia Almeida • 12/20/2021
Insights • Economy

Bulgaria Real Estate Market View

A regular update on the commercial real estate market in Bulgaria.
Simona Luiza Mircheva • 11/23/2021
Brussels Office Marketbeat
Insights • Economy

Belgium Real Estate Market View

A regular update on the commercial real estate market in Belgium.
New Perspectives (image)

New Perspective: From Pandemic to Performance

As a global leader in the commercial real estate (CRE) industry, Cushman & Wakefield offers clients a new perspective on COVID-19’s impact on CRE and beyond, preparing them for what’s next.
Michael Boonshoft
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Privacy & Cookies.
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All