Stockholm, 20 August 2020 – With focus on the future, Cushman & Wakefield releases the latest office report, Office Snapshot Sweden Q2. The theme for this quarter is the resilience of the office market. New conditions for office work are created with the advance of the pandemic and means that investors in office properties today are especially interested in following the development of both market data and trends closely.
During the second quarter, Cushman & Wakefield see that prime yields have been stable, top rents, on the other hand, have fallen slightly in Stockholm (from SEK 8,200 to SEK 8,000 / sq.m.), Gothenburg (from SEK 3,400 to SEK 3,300 / sq.m.) and in Malmö (from 3,200 to SEK 3,100 / sq.m.). Furthermore, the vacancy rates have also increased slightly in the CBD measurements during the period, from 3 to 3.5% in Stockholm and in Malmö from 4.5 to 6.5%. In Gothenburg the level has been stable at 4%.
Ola Jacobsson, Partner – Capital Markets at Cushman & Wakefield says; “Demand for office investments fell sharply during the start of the Covid-19 pandemic, especially for value-add and re-development projects. During the latter part of Q2, interest in office properties has returned. The supply, especially in Stockholm, has been limited and price levels have therefore not been tested properly. However, our latest office sale transaction in the Old Town shows a strength in the market, which may be the starting point for further price records during the autumn.”
The recommendation from the Swedish Public Health Agency until the end of the year is, if possible, to avoid public transport and ensure social distancing. Ensuring social distance is also important for those people who cannot work remotely and therefore adjustments need to be made in the workplaces. Cushman & Wakefield developed the concept "6 Feet Office" already this spring, which aims to adapt the workplace itself so that people can return to the office in a safe and secure way through methods to keep a safe distance.
Annika Edström, Head of What’s Next at Cushman & Wakefield says; “At present, our clients are very interested in developments in the office market in order to understand the future demands for office tenants. This is healthy as the tenants are currently reviewing their local strategies to optimize the use of office space. Globally, we see that the market is becoming more accommodating for occupiers of office space and the same development is also happening in Sweden.”
To understand the type of adaptations that need to be made in office buildings, in order to be relevant in the long run, it is more important than ever to understand the needs and businesses of future office tenants. The fact that productivity has been kept high in the short term even during a period when work from home has been the norm, has opened up for a more flexible thinking among business leaders and an increased understanding that employees can also work in locations and places other than the traditional office. Certain trends, such as increased digitalization, have also accelerated in many places for organizations to continue running their businesses. The strength of the office remains as being a creative meeting point and needs to be sustained to ensure the attraction of the property in the transaction market.
Annie Lilja, Strategic Advisor – Valuation & Strategic Advisory at Cushman & Wakefield says; “In the current market situation, we see an increased interest in analyses of future development projects, both for individual properties and entire districts. The competition for tenants is high and we see a clear trend in cluster profiling. Here, it is important that the end products are designed in an efficient way to meet the full range of tenants' needs, both in their daily operations but also to enable strategic growth in the future."
About Office Snapshot Sweden
Office Snapshot Sweden contains updated market information for the office market with the Cushman & Wakefield view on the rental and investment market throughout Sweden. The report is released quarterly and provides an opportunity to closely monitor developments in the office market. In the report, Cushman & Wakefield presents current quarterly data and trends for the office market in metropolitan regions throughout Sweden, focusing on submarkets in Stockholm, Gothenburg and Malmö. Cushman & Wakefield has used our employee's experience and expertise to produce a well-founded office market report as a basis for decision-making for actors in the industry.
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global real estate consulting company that delivers significant value to property owners, investors and tenants. Cushman & Wakefield is among the largest real estate consultants with 53,000 employees in approximately 400 offices in 60 countries. In 2019, the company had sales of USD 8.8 billion and a range of services that include capital markets, tenant advice, valuation, leasing and other services. For more information, visit www.cushmanwakefield.com or follow @CushWake on Twitter.