After a rather cautious first half, activity in the city has risen substantially. Figures from Arealstatistikk show a positive trend for rents. The average rent for leases awarded in the first half was NOK 2 010/m² (1 940 NOK/m² in 2020). Several leases were signed at good levels in Bergen during this period, and the average for the 15 per cent with the highest rents is NOK 3 000/m².

Entra has recently awarded a 10-year lease to the City of Bergen for Møllendalsveien 6-8, with occupation in late 2022 when refurbishment of the 14 250 m² building has been completed. The same company has also renegotiated a lease with the Western Police District covering 14 100 m² at Allehelgens gate 6 in central Bergen. Its term has been extended by five years.

No other county in Norway encompassing a major city has experienced a bigger fall in jobs during the pandemic than Vestland. After a lengthy period of declining employment, however, a one per cent increase has now been seen.  The letting market has benefitted from a favourable supply side, with a total of 36 500 m² completed in 2020 and 2021.

A total of 26 000 m² spread over three office buildings are due to be completed in 2022, while 30 000 m² in three buildings have so far been confirmed for 2023. In other words, the supply side is expected to increase somewhat in the time to come, but newbuild activity is considerably below the average for the post-2013 period.

Transaction market

Great investor interest is being shown in Bergen property. The city has witnessed no less than 28 transactions totalling NOK 5.9 billion so far this year.  That represents a record for a first half-year in Bergen. As usual, locals are very active. But Oslo-based players have also been responsible for many transactions. So far this year, a number of residential portfolios and four hotel properties have changed hands. Office transactions account for only a third of the volume.

The biggest transaction so far this year is MNG Holding’s sale of Fabrikkgaten 3-5 at Minde for NOK 450 million. Covering 20 300 m², this building accommodates such tenants as Asplan Viak and Certego.

Few purchase opportunities, particularly in central Bergen, has put pressure on yields. During the first half, we have seen references which support a prime yield of 3.75 per cent. The gap down to prime yield in Oslo is thereby only 50 basis points.