Nordic office markets outlook, Autumn 2025

• Nordic Office Investment Rebounds: The Nordic office market saw an uplift in the first half of 2025, with investment volumes increasing by 5% year-over-year to €3.5 billion, representing 24% of total market activity. Sweden led this recovery with a 115% surge in transaction volumes.

• "Flight to Quality" Drives Rental Growth and Polarisation: Despite rising overall vacancy rates in some major cities, prime office spaces remain resilient. Rents in top-tier buildings increased 9.6% year-over-year across Europe, while holding more stable in Nordic CBDs. This trend emphasizes a clear tenant preference for modern, high-quality, and ESG-compliant assets, creating a two-tiered market.

• Yield Stabilization and Constrained Supply Point to Market Rebalancing: Despite regional variations in vacancy rates, prime office yields have largely stabilized across Nordic capitals, with selective compression noted in markets like Oslo, indicating returning investor confidence. Crucially, a curtailed development pipeline, with new construction adding only a modest 0.6% annually to the total stock in key markets like Stockholm, is set to mitigate oversupply risks and support market rebalancing in the medium term.

Stockholm’s office investment market showed signs of recovery in the first half of 2025, with transaction volumes clearly higher than last year. Despite near term economic forecast downgrades and challenges with rising vacancy rates, prime office spaces continue to demonstrate resilience with stable or increasing rent levels. The tenant market is two tiered and obsolete and even conventional space needs to be upgraded to meet demand.

Investment market

Stockholm's office investment market demonstrated strong momentum in the first half of 2025, with transaction volumes reaching more than SEK 18 billion, a 100 percent increase compared to the same period last year. Momentum was exceptionally strong in the beginning of the year but has since slowed. Yield requirements have remained stable across all submarkets, with CBD prime yields at 4.00 percent.

Continued improved financing conditions has helped narrow the gap between buyers and sellers, leading to increased bidding activity. Both domestic and international investors are showing renewed interest in Stockholm's office market, with a positive trend expected for the remainder of 2025.

Tenant market

The vacancy rate for Stockholm's office market reached 14.8 percent in the second quarter of 2025, a 1.3 percentage point increase from the previous year. Nearly all submarkets except Hagastaden have experienced rising vacancies. Currently, nearly 1.7 million square metres of office space sits vacant in the region.

Despite these challenges, prime rents have shown resilience, particularly in the CBD where rates increased to SEK 9,500 per square metre per year. Other submarkets maintained mostly stable rent levels. Investments across the value spectrum of CapEx to retrofits lifts the quality and market position of assets and hence carry higher rents.

The first half of 2025 saw moderate leasing with approximately 175,000 square metres of take-up, a number that is likely to be positively revised. 7 of the 10 largest new leases were in CBD, including PWC (13,000 square metres) and SBAB (5,100 square metres). Although a few tenants are taking on more space, many are downsizing, with average space reductions of around 25 percent shown in a brief JLL study conducted earlier this year.

Outlook

Office space under production totals approximately 210,000 square metres, with about 50 percent already pre-leased. This limited pipeline (0.6 percent of total stock annually vs. historical 0.9 percent) should help prevent further oversupply as the market adapts.

For the occupier market to stabilise, take-up volumes similar to 2016–2020 levels (5–6 percent of stock annually) would be needed. The polarisation between prime and secondary assets is expected to persist, with more than 50 percent of new leasing activity concentrated in CBD and Rest of Inner City.

The investment market outlook appears positive, with the increased transaction volume signaling that the market is regaining momentum. Stable yield requirements across submarkets indicate that investors' risk appetite is returning after a period of uncertainty. This trend is expected to continue throughout 2025, reinforced by improved financing conditions.

Gothenburg's office market showed some signs of stabilisation in the first half of 2025, though challenges remain. While overall investment activity is present, the office sector itself has seen limited transaction volume. Increased layoffs and fewer job creations are also impacting the market.

Investment market

While transaction reports show substantial overall real estate investment in the Gothenburg area, it's important to note that specific office transactions were very limited in the first half of 2025. General transaction volumes reached nearly SEK 10 billion, an 85 percent increase compared to the same period last year, but the focus has been Residential and Industrial & Logistics. Office market sentiment suggests stable yield requirements across submarkets, with CBD prime yields around 4.55 percent. Despite the limited office-specific activity, improved financing conditions are potentially narrowing the gap between buyers and sellers for future deals.

Tenant market

The vacancy rate for Gothenburg's office market increased to 13.2 percent in the second quarter of 2025, up 1.6 percentage points yearover-year. Most submarkets, with the exception of Mölndal, have experienced rising vacancies. Despite this, prime rents in the CBD have remained relatively resilient, holding at SEK 4,200 per square metre per year. Leasing activity has been moderate, with approximately 50,000 square metres of take-up in the first half of 2025. Notable new leases include IF (8,800 square metres) and Nordea (5,300 square metres), both in the CBD. Recent activity includes Atrium Ljungberg extending a lease with Ericsson in Lindholmen. It’s a two tiered market with clients looking for, and willing to pay for, modern, high standard, flexible space primarily in central locations. The labour market is facing headwinds, with terminations up 50 percent year-over-year in Gothenburg during the first part of the year, a contrast to the slightly lower terminations seen across Sweden as a whole. The car industry plays a vital role in these increased terminations, and the trend is likely to abate.

Outlook

Approximately 90,000 square metres of office space is currently under construction, with around 35 percent pre-leased. Also, the major part will not be finalised until 2027. This limited new supply should help mitigate further downward pressure on occupancy rates. Overall, while general investment activity is present, the Gothenburg office market faces headwinds from rising vacancies, though prime rents are holding. New job vacancies in the Gothenburg region continue to decrease, down 23 percent between January and June 2025 compared to the same period last year, though this is slightly better than the national trend.

The office market in Malmö/Lund continues to show a preference for high-quality, well-connected locations, despite the current economic headwinds. Tenants demonstrate a willingness to pay for quality, while leasing activity slowed in the first half of 2025, with a take-up volume of approximately 20,000 square metres in the first half of 2025 compared to 50,000 square metres in the same period last year. The vacancy rate increased to 11.7 percent in CBD and to 13.5 percent across Malmö/Lund, with median rents showing slight positive movement in Hyllie but marginally negative in other submarkets.

Investment market

Investment activity showed signs of improvement during the first half of 2025. A notable transaction was Wihlborgs’ acquisition of eight properties from Granitor for 2.4 billion SEK, where six of the properties are under management while the other two are development properties with 82,000 square metres of land and 12,000 square metres BTA for offices. Prime yields remain stable at 5.00 percent in the CBD, with no changes in yield levels across other submarkets.

Tenant market

The high unemployment rate of 8.8 percent impacts office demand, though employment in Malmö shows more stability in office-intensive sectors compared to other markets. The biggest letting in the first half of 2025 was when Wihlborg signed a 20,000 square metre lease to Malmö University in the project Amphitrite located in Universitetsholmen.

Limited new office supply that is expected to reach the market should help stabilise the market, despite weaker tenant demand, potentially leading to a more balanced market situation towards 2026.

Outlook

The economic recovery that began last year has slowed down, with geopolitical risks and trade disputes dampening growth prospects.

According to recent market data, while financial markets show less volatility and there is higher risk appetite, short-term economic growth is expected to be subdued. The preference for modern, sustainable office spaces with good communications is expected to drive the premium segment of the market even as overall demand remains challenged.

The leasing market remained fairly active in spring 2025, while a slowing down of the market was evident, as political uncertainty prolonged negotiations and decision-making. The polarisation of the office market continues in the Helsinki region. The A-grade assets, which deliver on prime locations with proximity to public transport, urban amenities and technical excellence, demonstrate a 25 percent lower vacancy rate compared to the whole office stock in the CBD.

Investment market

During the first half of 2025, the transaction volume reached EUR 109 million, a significant increase from the EUR 62 million recorded in the first half of 2024, showing clear signs of recovery in the segment.

The largest transaction was HGR Property Partners selling their developed property to Norwegian Public Property Invest for EUR 79 million. The polarisation of the office segment continues, with investors primarily showing interest in properties located in prime locations.

Tenant market

The vacancy rates in the CBD stabilised during the first half of 2025, with grade A vacancies indicating a healthy market in the premium office segment across submarkets. Notably, Ruoholahti and Keilaniemi both recorded vacancy rates close to 4 percent for grade A assets.

While many companies have implemented return-to-office strategies, the largest corporate tenants continue to seek reduce their office footprint. However, smaller tenants, who adapted more quickly to hybrid work requirements due to shorter lease maturities, have moderated their space reduction needs. During spring, multiple public sector entities publicly announced requirements for employees to return to office-based work, which supports the long-term outlook for office occupancy.

Outlook

As the political uncertainty continues, the prolonged lease negotiations and decision-making is expected to result in a cautious tenant market in the second half of 2025. The forecast for the vacancies and rental levels remain stable. The demand for A-grade office space is expected to continue to hold up well.

The Oslo office market saw slower letting activity in 2024 compared to the strong years of 2022 and 2023. Activity has picked up in 2025 and we expect this trend to continue, supported by higher lease expiry volumes among large tenants in the coming years.

Investment market

The investment market for central Oslo office assets has remained strong in 2025. A key driver has been that several pension funds have become underweight in real estate and therefore had significant capital to deploy. This has resulted in sharp pricing for prime CBD assets. A prime example is Gjensidige’s acquisition of Akersgata 51 from NREP. Other notable CBD transactions have led Akershus Eiendom to revise prime yield estimates in both the CBD and fringe areas by 25 basis points, now standing at 4.50 percent and 5.50 percent respectively.

Tenant market

Letting activity in the first half of 2025 remained below the historical average. This has been driven less by weak demand and more by low lease expiry volumes, coupled with a challenging first half marked by political turbulence and uncertainty over future interest rate levels.

Overall, office vacancy in Oslo has moved sideways and currently stands at 6.5 percent. Following several years of strong rental growth, prime rent in Vika–Aker Brygge has increased further to NOK 6,400 per square metre in 2025. Unlike many other European cities, growth has been recorded across all Oslo office submarkets, not just in the CBD.

2025 has already seen several major lettings:

• Statkraft relocating from Lysaker to a new 24,600 square metre development in central Oslo.
• Visma moving from Skøyen to Majorstuen into a fully refurbished 20,000 square metre building.
   

On a short-term horizon, we expect Oslo office vacancy to remain flat or edge down, supported by a recovering economy and continued low new supply. Over the longer term, increased project completions could ease supply, but high residential prices may encourage further office-to-residential conversions.

Outlook

Norges Bank’s first interest rate cut since the pandemic in June, combined with guidance for further cuts this year, is expected to boost activity in both the letting and investment markets. With a tight supply side and improving macroeconomic conditions, we forecast stable rents, healthy demand and continued investor appetite for well-located assets.

Copenhagen’s office market in 2025 is shaped by rising tenant demand for sustainable, energy-efficient premises that meet tightening ESG requirements. While large companies are most affected by new regulations such as the CSRD Directive, smaller firms increasingly use ESG reporting as a competitive advantage. Modern, flexible offices with shared facilities in prime locations near transport hubs remain in high demand, while older, unmodernised spaces face reduced interest.

Investment market

The investment market has slowed due to higher yield requirements following recent interest rate hikes, combined with cautious investor sentiment. This mirrors international trends where rising vacancies dampen foreign institutional interest. In the first half of 2025, Copenhagen’s office transaction volume fell over 27 percent year-on-year, driven mainly by a few large deals, including Calum’s purchase of Copenhagen Business Park and Nrep’s acquisition of FLSmidth’s former headquarters in Valby.

Tenant market

Strong employment and low remote work rates continue to support demand for physical workspaces in Copenhagen. Tenants prioritise modern, well-located offices with flexible layouts, shared amenities and strong sustainability credentials. Larger serviced offices and co-working spaces, such as Nrep’s Woods and PFA’s The Union, meet these needs. Smaller, outdated premises without modern features struggle to attract interest. Overall, leasing activity has slowed compared to 2024, returning to 2019–2022 levels.

Outlook

Office development in Copenhagen has slowed significantly, hindered by high construction costs, tighter financing and rising yields. Notable projects include MT Højgaard’s acquisition in Nordhavn and NPV’s multi-user Engholmene Business Center, due in 2028. Rental growth is expected to persist for prime, sustainable offices with excellent infrastructure links. Projects like the DGNB Gold-certified buildings at Sluseholmen metro station reflect the market’s shift toward highquality, ESG-compliant assets.