Retail
The transaction market for retail properties was weak in 2023 compared to historical numbers for the segment. There was also low activity in the leasing market throughout last year, though demand for prime spaces remained strong. High interest rates and inflation created uncertainty, but with the peak in interest rates now behind us, sentiment among consumers and investors is likely to improve going forward. In the short term, we expect strong activity in the high-street market to continue, with a positive trend in footfall.
6 Retail
General
The online shopping trend has continued to grow stronger than traditional retail since the pandemic. Given that e-commerce still constitutes a smaller portion of total consumption in Norway compared to other similar countries, this trend is expected to continue in the coming years. In the first half of 2024, footfall on high streets has returned to post-pandemic levels. Similarly, consumer behaviour among Norwegians has
also normalised.
Transaction Market
The retail property transaction market has had a slow start to 2024. Compared to the same period in 2023, the volume is down by nearly 28 percent for the first half of 2024. As of August, we have recorded retail transactions amounting to approximately NOK 2.5 billion. This represents a share of just over 5.4 percent of the total transaction volume. The segment has experienced a longer period of value depreciation compared to office and logistics properties. However, we are now seeing increased interest at new levels. Demand is particularly strong for defensive investment strategies in retail, such as grocery stores and big-box retail in prime locations.
Leasing Market
The activity in the leasing market for retail has picked up somewhat in the first half of 2024. High-street locations continue to see strong demand from tenants looking to secure space in the best streets. However, there is still limited availability in these areas, leading to upward pressure on rents for high-street locations. Demand is somewhat lower for less prime retail spaces. Our rent estimate for prime high-street retail remains at NOK 30,000 per square meter, with an expectation of further upward pressure.
Rent levels for high quality retail space, NOK per sq.m
Prime yield
Rent levels
NOK/sqm
4.
60
%
2,
470
20
,000
0
.0
%
Key figures
High street
Big-box
Outlook