Office
The overall vacancy rate continues to increase in Greater Stockholm reaching 10.5%. Vacancies increased the most in the decentralised locations reaching 14%. Meanwhile the vacancies have remained stable in the CBD at about 4% and the City Centre at about 7%. This is in line with a market trend clearly visible in the Stockholm office market, where the tenants choose to decrease their current office space, in exchange for a better, more central location. New completions in Q4 were limited to 5,800sqm, which was delivered in the CBD. As a result of sustained low vacancies and expectations of high indexation in 2023, the prime rents in the CBD have increased to SEK 8,500 (around 6% YoY). The other submarkets were also affected by the latter, and their prime rents have reached SEK 5,800 in the City Centre (+5.5% YoY) and SEK 3,800 in the suburbs ( +3% YoY). In Stockholm CBD, the prime yield has increased to 3.5%. For Stockholm City Centre and Stockholm Decentralised, the prime yield has also seen a decompression reaching 3.75% and 3.85%, respectively.
Retail
Retail is expected to be amongst the most affected by the high inflation and upcoming economic slowdown. With consumer spending decreasing, the retail tenants are expected to be heavily impacted. As a result, the prime rents for most retail asset types have been decreasing since 2019. Q4 has seen further decrease in rental levels with rents for shopping centres decreasing around 2 percent when compared to the previous quarter, rents for high street decreasing between 2 and 6 percent and rents for retail parks decreasing around 3 percent. Similarly, prime yields have continued to decompress in Q4 reaching the highest levels in five years, at 3.5 percent for high-street assets, 4.15 percent for the shopping centre and 5.75 percent for both retail parks and big-box assets.
Logistics
Logistics occupier market remains attractive and competitive. The supply remains high and is expected to reach a new all-time high in 2023. The share of speculative project also continues to increase. Despite the high developer activity the vacancy levels remain low in the prime properties - around 1% nationwide. Meanwhile the overall vacancies have registered a slight increase, reaching 3.5% nationwide. The highest vacancy in the overall stock is currently registered in Stockholm at 6.5%, while the lowest in Gothenburg at 1.5% Rental levels for distribution centres have registered a slight increase across Sweden reaching SEK 950 and SEK 825 in prime locations around Stockholm and Gothenburg respectively. In Q4 2022 over SEK 9bn was transacted across the Swedish logistics investment market, a major decrease when compared to the same period last year. Industrial deals corresponded to approx. 25% of the entire investment volume. Yields for logistics properties have experienced a strong decompression reaching 4.4% in the best locations in Stockholm and Gothenburg.
