Retail

The transaction market for retail properties has shown positive development since 2023 but has not yet returned to historical levels for the segment. The leasing market remains characterized by low activity, primarily due to ongoing uncertainty about economic developments. A soft economic landing, combined with lower interest rates and rising real wages, is expected to create a more positive sentiment among consumers and retail operators moving forward.

Market Overview

Throughout the fall, consumer purchasing power has increased, and we anticipate continued growth as economic prospects improve. According to Kvarud Analyse, Norway’s largest shopping centers have reported solid turnover in 2024, with the 60 largest shopping centers experiencing a 3.5 percent increase compared to 2023.

Transaction Market

The investment market for retail properties improved in 2024 compared to 2023, with transaction volumes increasing by 42 percent year-over-year, reaching a total of NOK 7.4 billion. However, volumes remain below historical levels recorded in the Norwegian market. Shopping center transactions accounted for approximately half of all retail transactions in 2024, indicating a growing interest in defensive retail investments.

At the start of 2025, we have maintained our prime yield estimates at 4.75 percent for high-street retail and 5.75 percent for shopping centers. Based on market observations, we have adjusted the prime yield for big-box retail properties downward by 25 basis points to 5.75 percent.

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Rental Market

Leasing activity in the retail sector remained subdued in 2024, primarily due to higher interest rates, declining real wages, and uncertain economic conditions. Consumers have been more cautious, with overall retail consumption growth remaining weak throughout 2023 and into the past year. Many retailers have postponed expansion plans as rising costs pose challenges for the industry.

Despite this, demand for high-street retail locations has remained strong. This is largely driven by a highly limited supply of prime retail spaces and increasing interest from international brands seeing opportunities in Norway due to the weak Norwegian krone. Given these factors, we have maintained prime high-street rental prices at NOK 30,000 per square meter throughout 2024.

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Rent levels for high quality retail space, NOK per sq.m

Key figures

Outlook

Toward the end of 2024, retailers have reported increased turnover, driven by a strong holiday shopping season and a gradual improvement in household purchasing power. At the same time, lower interest rates and rising real wages in 2025 are expected to boost private consumption. This sets the stage for increased leasing activity among retailers in 2025. With rising demand for prime retail spaces and limited supply, we anticipate upward pressure on rental prices in the coming period.

Read our latest market commentary regarding the retail market here: In Short, December | Retail