The latest GDP data confirms that the Swedish economy has continued to expand. In Q4 2013 the economy recorded an extraordinarily large 3.1% y-o-y increase, driving the 2013 full year figure to 1.5% per annum. The consensus of economic forecasters expects GDP to growth by 2.8% in 2014 and 3.0% in 2015.
In Q4 2013 employment in office intensive sectors rose by 4.0% in Stockholm County, compared to 2.8% in Sweden. The unemployment rate is slowly coming in but it is a lengthy process.
The total supply pipeline for the next three years corresponds to 4.0% of the total existing office stock in Greater Stockholm.
Normally there is a lag before general economic trends reach the occupier market and affect the demand side. At the moment the demands side is hard to interpret as the indicators are painting a mixed picture. On the one hand OIS employment in Stockholm has picked up strength in 2013, and the investors expect occupier demand to strengthen. On the other hand the confidence indicator for the private service sector in Stockholm has recently moved down.
However, we believe that the outlook for rental growth in Stockholm is relatively good. Thanks to a narrow supply pipeline and a vacancy rate that is also fairly low, at least in attractive locations, we expect prime rents to be able to hold up better than would otherwise be the case.
Source : DTZ (Groupe UGL)