Retail

In the first half of 2025, the retail segment have been characterized by increased investment appetite in the transaction market, while the leasing market shows a clear divide. The most attractive locations experience strong demand, whereas tenants are more cautious toward less favorable retail space. With interest rate cuts and stronger household purchasing power, conditions are in place for a more positive market climate in the second half of the year.

General Overview

Despite geopolitical uncertainty and concerns around tariffs, retail activity has developed better than expected. Norway’s first interest rate cut in June has supported consumption and is expected to further boost retail activity going forward.

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Transaction Market

So far in 2025, approximately NOK 2.5 billion worth of retail properties have been transacted, accounting for nearly 7 percent of the total transaction volume. Activity is thus somewhat higher than at the same point last year, signalling a stabilization in the segment. Demand is particularly focused on prime assets, where investor interest remains stable.

Based on transactions completed in the first half of the year, we have updated our prime yield estimates. For high street retail, the level has been reduced by 25 basis points to 4.50 percent, while big-box has been adjusted down to 5.75 percent. Prime yield for shopping centers remains unchanged at 5.75 percent. These downward yield adjustments underline a market where investors continue to seek the most attractive and defensive retail property investments.

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

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Rental Market

The leasing market for retail properties in the first half of 2025 has been marked by a clear polarization. Prime high-street locations are experiencing strong demand, driven by limited supply and growing interest from international players who see attractive entry opportunities in Norway due to the weak Norwegian krone. Demand for less attractive retail space is, however, somewhat lower. After a relatively strong start to the year driven by expectations of interest rate cuts and improved consumer confidence, activity has become more cautious through the spring. Many tenants remain careful, opting for short-term leases rather than longer-term commitments.

Key figures

Outlook

Expectations of lower interest rates and further real wage growth through 2025 are likely to strengthen household purchasing power. This provides a basis for increased activity among retail operators during the year. At the same time, the supply of attractive locations remains limited, which helps keep rental levels stable and puts moderate additional upward pressure on rents for high-street retail properties.

Read our latest retail market commentary here: In Short, December 24: Retail