News release

Positive outlook for a strong property market in 2022

As a result of a record-strong transaction market, the Nordic region ranked as the third largest transaction market in Europe in 2021, just after Germany and the UK. Sweden, accounting for 50 per cent of the total Nordic volume, stands out as an exceptionally liquid market. For 2022, we foresee continued keen investor interest in and support for new record pricing levels for properties in those segments viewed as low risk, meaning residential units, community service properties and logistics properties, but we also foresee rising interest in well-situated and sustainable office properties and in certain types of retail properties.

February 16, 2022

Although rising inflationary expectations normally benefit real estate, the equity market’s focus on the increase in interest rates has exerted pressure on share prices for property companies. However, we continue to see premium valuations for listed companies which, combined with favourable financing opportunities in the bond market, supports the potential for structural transactions also in 2022, with some reservations concerning the escalating uncertainty in the Eurobond market in the past few weeks. In our assessment, the risk appetite for offices will increase, driven by a clear recovery in the leasing market for sustainable offices, which indicates that transaction volume for offices will remain high during the year.

The most recent edition of the JLL Nordic Outlook indicates, for example, that:

·         Rent for offices in prime locations in Stockholm and Oslo has turned around and we noted a clear upturn during the second half of 2021, combined with rent growth that is expected to exceed inflation in the future.

·         Sustainable offices are characterised by both a lower risk of vacancies and higher rents, which creates potential for the property owner to modernise the portfolio when economic activity stabilises at a high level.

·         Residential properties, logistics and community service properties remain the hottest segments.

·         Investor interest is driven by both domestic and significant amounts of foreign capital, which indicates that we may see even lower return requirements.

We are leaving a record year behind us and expect a continued strong market in 2022

Transaction volumes for the Nordic region exceeded SEK 710 billion in 2021, including structural transactions. The Nordic region again ended up in third position in the ranking of European countries, which means the Nordic region remains highly attractive to international investors. With structural transactions accounting for 50 per cent of total transactions, Sweden stands out compared with all other countries. However, the higher level of interest rates is a cloud on the horizon and this could dampen demand assuming that it persists when inflationary pressures, which are still regarded as temporary, ease. To date, however, the real interest rate is low and this factor, combined with good access to capital, means that properties remain attractive for institutional investors compared with other asset classes.

-       “The extremely high level of interest in properties with a low risk profile is continuing, although we also expect to see increased interest in somewhat more high-yield properties during the year. We also expect an increased interest in office properties, since the signals from the leasing market are positive and, above all, a lot better than what many expected at the start of the pandemic,” says Thomas Persson, Head of Capital Markets Nordics.

Good outlook for sustainable office properties in prime locations

The JLL Nordic Outlook devotes a separate chapter to the outlook for office properties with the point of departure being the results of the Nordics Changing Workplace Experience, JLL’s Nordic survey. The survey shows, for example, that the leasing market is improving despite increasing vacancies, which is connected to increased demand for sustainable, well-invested offices in prime locations. Kista in Stockholm is highlighted, where vacancies in newly built/refurbished offices are much lower than in the older portfolio, despite a significant difference in rents. In Kista, Class B and C properties have a vacancy rate of a full 27 per cent, a rate that has risen more than 10 percentage points over the past decade, which is in stark contrast to the vacancy rate of 11 per cent for Class A properties in Kista.

“The office market is moving from strength to strength and we are positive to the potential for continued rent growth for sustainable properties in prime locations. Well-invested space at higher rents are prioritised by tenants at the expense of lower demand for ‘cheaper’ office solutions,” says Niclas Höglund, Head of Research at JLL.

To download the report, click on the link below,

About JLL Nordic Outlook

JLL Nordic Outlook, which is published twice per year, analyses the Nordic property market from various perspectives. The analysis includes the office markets in Stockholm, Gothenburg and Malmö, and the other Nordic capitals, as well as retail, logistics and residential property markets in the Nordic region. An analysis is also conducted of the transactions market in Sweden and Finland and a special article analyses the outlook in the office market.

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.6 billion in 2020, operations in over 80 countries and a global workforce of more than 95,000 as of September 30, 2021. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit