Only 30 000 m² of new office space, spread over three buildings, were completed in 2022. This was primarily because few developments were initiated at the start of the pandemic – reflecting not only great uncertainty but also increased raw material prices. We expect a total of 110 000 m² to be completed in 2023-24, with less than 50 000 m² becoming available annually in 2022-24. That is far below an average year, which has been 120 000 m² since 2000.

Three new office buildings totalling 50 000 m² are due for completion this year, with the 30 000 m² in Aker Tech House at Fornebu accounting for most of this figure. All three have been fully leased for a long time. Since it typically takes 18-24 months to complete an office building, it is becoming increasingly unlikely that the current volume of almost 60 000 m² for 2024 will go up by much. Almost half of this space remains unlet, and could thereby contribute to some rise in vacancy down the road.

The newbuild volume is set to increase sharply in 2025, to around 185 000 m². Two projects make a particular contribution to this expansion.

• Construction City: 80 000 m² in new office space is due for completion in 2025. Veidekke is also moving its head office from Skøyen to a new building of 11 300 m² on the neighbouring site in early 2025.

• Government quarter: blocks A and D, totalling 47 000 m², are due to be ready in 2025. However, several delays have already arisen, and we would not be surprised if completion is postponed further.

In other words, new construction in central Oslo is very low. Only the first stage of the government quarter development will probably be completed in the forecasting period. Otherwise, the Colosseum quarter at Majorstuen and Veksthuset at Urtegata 9 are due for completion in 2023 and 2024 respectively. On the other hand, several large renovation projects are being pursued in the city centre. These include Storebrand’s total renewal of Filipstad Brygge and Norsk Hydros Pensjonskasse’s project at Bygdøy Allé 2.

Office vacancy has fallen to low levels for most office areas, and is now 4.7 per cent in the city centre.¹ In the eastern fringe, where vacancy averaged nine per cent in 2010-21, the figure is now seven per cent. That is primarily because newbuilds have largely been filled up with tenants, and new construction has declined substantially in the past two years. Vacancy in the western fringe has remained stable at less than seven per cent over the past three years. It is worth noting that office vacancy is generally low in all areas, which has contributed to a broad-based rise in rents over the past year. We must go back before the 2008 financial crisis to find comparable conditions.

Office vacancy in Oslo bottomed out at 5.5 per cent at the New Year, and we now see that it is starting to rise.² The figure today is 5.7 per cent, which is in line with our forecast from last autumn. The newbuilding volume in 2023-24 is low, and much of this space is already let. Since we expect lower demand, however, our view remains that vacancy will rise weakly over these years. Newbuilding is set to increase substantially in 2025, and we expect office vacancy to peak at around seven per cent. Even though this represents a considerable rise from the present level, it is not particularly high in a historical perspective.

We have not so far registered a single confirmed development with completion in 2026. Although we are aware of many potential projects, a number of developers have put these on ice to await a better market. Building costs increased substantially during the pandemic because of high raw material prices and bottlenecks in global value chains. Although raw material prices have now fallen considerably, building and conversion costs remain at a high level. Manufacturing glass, for example, is very energy intensive. Yields have also increased, and uncertainty prevails about economic activity and how the letting market will develop.