Transaction

Based on the improved outlook for the Norwegian economy, sentiment in the transaction market is now improving. We are noticing a resurgence in market activity, and transaction volumes for 2024 are expected to surpass those of 2023.

Improved Sentiment

In the first half of 2024, a transaction volume of approximately NOK 47 billion was recorded across 111 deals, representing a 56 percent increase compared to the same period last year. The expectation of a soft landing in the Norwegian economy and that interest rates have peaked provides reassurance to both investors and banks. This has positively impacted credit margins, which are approaching historical averages. Improved financing conditions, adjusted valuations, and reduced market uncertainty appear to have boosted investor activity, with a greater willingness to execute transactions once again.

The transaction volume in 2024 has been marked by several large deals. Transactions exceeding NOK 1 billion account for over 60 percent of the total volume so far this year. The largest transaction to date is E.C. Dahls Eiendom’s acquisition of all of Entra’s properties in Trondheim. The transaction amounted to NOK 6.45 billion and included 13 properties and one development project.

Transaction volume per segment

Prime Yield

The prime yield for office properties has remained stable at 4.75 percent since the fourth quarter of 2023. Future developments in prime yield will depend on trends in the interest rate market and any benchmark transactions in the market.

Development in prime yield and interest rates

Outlook

It is no longer expected that interest rates will decline quickly; instead, they are likely to remain at current levels for some time. This gives investors greater stability and confidence in the cost and revenue outlook compared to earlier periods. We have already seen positive signs of improved market sentiment, and more investors are positioning themselves for a stronger market recovery.