The GÖTEBORG Office Market
2007 was a strong year for the Gothenburg office market- falling vacancies and continued rental growth. For the entire year, the total vacancy rate went down from 10, 4 % to 8, 2 %. The largest declines occurred in the CBD, Norra Älvstranden and Mölndal. The demand for office space has indeed increased. New projects offering new office space are undergoing due to this demand. The increased demand has led to an increase in rent levels. Prime rent in CBD was, in the fourth quarter of 2007, at SEK 2, 205 per sqm. For the rest of Inner City, prime rent stands at SEK 1, 850 per sqm. In Norra Älvstranden it is SEK 1, 950 per sqm. The reduction of vacancies has also pushed the prices upwards, notably in central submarkets. On the whole, investment interests from foreign investors remain high and continue to dominate on the Göteborg market although increasing yields. The total investment volume in 2007 was SEK 9,9 billion, with cross-border transactions accounting for 61 %.
A strong domestic economic situation drives growth in the Greater Göteborg Region. The region is expected to increase it Gross Regional Product from 2, 2 % to 3, 0 % in 2008 according to Nordea Bank. During 2007, employment was up by 2, 0 % and is expected to reach 1, 2 % in 2008. It is primarily driven by an active private services sector, which includes office intense businesses such as IT consultants, staff agencies, law and accounting firms. These sectors have expanded by 70 % (approx. 100, 000 employees) in Gothenburg area since 1993.
Source: Nordic City Report Spring 2008 - Jones Lang LaSalle
