The level of transaction activity in Stavanger was good during the first half of 2021. We registered no less than 21 properties changing hands for a total of NOK 4.3 billion, a significant increase on the same period of 2020.¹ The number of deals so far this year already exceed the figure for the whole of last year.

Among other transactions, it became clear before the summer that Storebrand Eiendomsfond KS had acquired Skattens Hus at Lagårdsveien 46 for NOK 700 million from a club deal arranged by Pareto. This 20 000 m² property is adjacent to Statens Hus, already owned by Storebrand.

Sales in the first half largely comprised office and mixed use properties, and several premises have changed hands in the city centre as well as at Hinna and Forus. Entra and Camar, for example, have further strengthened their position in Hinna after acquiring Laberget 28 from Oslo Areal for NOK 375 million. Entra has also purchased Lagårdsveien 6 in central Stavanger from SpareBank 1 SR-Bank.

Oslo-based investors are very active in the Stavanger region, with no less than 14 of the 21 properties changing hands in the first half acquired wholly or partly by players from the capital. In addition to the transactions mentioned above, several club deal arrangers have been active this year. Their attention in this region is largely concentrated on properties with long leases. An example is Clarkson’s acquisition of Schlumberger’s Norwegian head office in Risavika with a 10-year lease.

However, local players often accept greater risk by purchasing development assets or properties with shorter leases. We recently saw an example of this when Seabrokers acquired Shell’s Norwegian head office for just over NOK 120 million. With only about 250 employees left there, the oil company is due to vacate this 25 000 m² office building in Risavika.

Transactions in Stavanger so far this year confirm that keen yields are being achieved with attractive objects, and indirect references confirm a level of 4.25 per cent for prime yield.

Letting market
The office letting market in Stavanger has held up well during the pandemic. Estimates from local estate agents and rental statistics from Arealstatistikk paint the same picture, namely that the level of letting has largely stayed flat since 1 January 2020.

A new prime-rent level of more than NOK 3 000/m2/year has become established in the city over the past three-four years. The range of buildings which can achieve this amount in central Stavanger has been narrow, but is growing.

Base Property, for example, has succeeded in landing several attractive leases for its new building at Knud Holms gate 8. The Western Norway Regional Health Authority has signed a 15-year lease for the sixth and seventh floors, while Advokatfirmaet Thommessen is to lease the 11th floor. It had previously been clear that Deloitte will be moving into this 15 000 m2 building, which is due for completion in 2023.

However, newbuild activity remains low in Stavanger. No new office buildings will be completed this year or next. And, apart from the above-mentioned Knud Holms gate 8, we know of only one certain project for 2023. Smedvig Eiendom is to construct a new office building (Auglendsmyrå 11-15) at Åsen in Stavanger. Covering 10 000 m², it is leased to such tenants as Kruse Smith Entreprenør, Bravida, GK Norge and Schneider Electric.

Office vacancy in Stavanger remained unchanged during the first half at 10.8 per cent.² In other words, it is still relatively high. However, a substantial share of this vacancy relates to older and outmoded buildings. The market for modern premises in attractive locations is holding up well.

We are into a period of declining oil investment, primarily because development of the Johan Sverdrup field is approaching completion. Investment activity on the Norwegian continental shelf is expected to fall by about 10 per cent from 2020 to 2022.³ However, this reduction bears no comparison with the decline we saw in 2015-17, when more than 30 per cent of capital spending was shaved off.

Despite the drop in oil investment, SR-Bank’s business trends survey shows that a clear majority of companies in Rogaland county expect to increase their staffing over the next 12 months. In addition to moderate optimism among oil-related companies, we see that new companies in other sectors are popping up at regular intervals. Four “green” stock-exchange listings based in the region have occurred since 1 January 2020, for example.

We expect the positive trend in Stavanger’s office market to continue, but its twofold division will probably persist. The transaction example cited above, where Shell is vacating 25 000 m2 in Risavika, provides a good example that times remain hard in parts of the market. At the same time, we see favourable progress for attractive properties with a central location.