THE REnTAl pROpERTy mARkET in THE GöTEBORG REGiOn 2008 for office, retail, industry and logistics AT WHWE OF FER in COnnECTiOn WiTH BUSinESS ESTABliSHmEnT in THE GöTEBORG REGiOn, SWEDEn Business Region Göteborg AB is dedicated to strengthening and developing trade and indus- try in the Göteborg Region. We are a non-profit organisation representing 13 member municipali- ties. Our goals are to contribute to sustainable economic growth, a high level of employment and a diversified economy. The organisation’s Establishment and Relocation Service is a team of four individuals with a mission of facilitating the establishment and relocation process for foreign businesses, investors and indi- viduals. Various databases and a well-developed network of real estate brokers, recruiting agencies, international schools and advisors help to expedite this process. We are a ‘one-stop-shop’ that works with key decision makers in both the private and public sectors. THiS iS WHAT WE DO DATABASE FOR AVAilABlE lAnD AnD pREmiSES The MALO Database is accessible via the Internet (www.businessregion.se), showing a list of available land and premises in the Göteborg Region for either purchase or rental etc. can be viewed and downloaded from this site, on request. inTERnATiOnAl SCHOOlS The Göteborg Region has several international preschools, elementary and high schools, serving the international community. With education being a major factor for those moving with families, we value our relationship with the international schools, in facilitating your establishmentand relocation process. REAl ESTATE / HOmE BROkERS A long-standing and integrated network of real estate and home brokers eases the process of finding accommodation. We foster this network with importance, recognizing that housing issues go hand-in-hand, with finding office space or land. For establishment, investment RECRUiTmEnT COnSUlTAnTS and relocation matters, contact: Our contact is well established with the Swedish Employment Office in Göteborg, which is a state- run, non-profit organisation, offering recruitment expertise, which are branch specific. They can assist a foreign employer by assessing the recruitment prospects, and publish vacancies on petra Sedelius Sweden’s largest job-site, as well as provide suggestions regarding suitable job candidates. Head of Establishment and Investment Service Telephone: +46 31 61 24 22 Mobile: +46 705 26 08 28 qUAliFiED ADViSORS firstname.lastname@example.org Our extensive network of local authority representatives and qualified advisors Roger Strömberg such as accountants, tax auditors, lawyers, Director of Establishment business developers, etc. also ease setting up and Investment Service a business here. Telephone: +46 31 61 24 12 We can also assist you with concerns or Mobile: +46 705 42 89 01 questions relating to multi-cultural/diversity email@example.com issues, infrastructure, regional co-operation, inter-national trade, trade and industry development in general as well as city For information and publications on the commercial planning. Please contact us with your and industrial life of the Göteborg Region, please visit queries and let us make your establishment www.businessregiongoteborg.com and relocation process a successful one. CONTENTS INTRODUCTION pg 4 1 GROWTH pg 8 2 THE TRANSACTION MARKET pg 12 2.1 Transaction volume pg 14–15 2.2 Distribution of capital pg 15 2.3 Future transaction market trends pg 16 3 OFFICE SPACE pg 18 3.1 Vacancy trends pg 19–20 3.2 New development projects pg 20–21 3.3 Demand pg 21–22 3.4 Rent trends pg 22–23 3.5 Required direct yield pg 24 4 LOGISTICS pg 26 4.1 Vacancies, new development projects and demand pg 28–29 4.2 Rent rates pg 29–30 4.3 Required direct yield pg 30 4.4 Ad: Sweden’s 20 top logistics locations 2008 pg 32–34 5 RETAIL pg 36 5.1 Retail development in the region remains strong pg 37 5.2 Expansion of existing commerce pg 37 5.3 Göteborg’s City is the engine of retail pg 37 5.4 Göteborg region still hot pg 38 5.5 Current investments in trade in the Göteborg region pg 38–39 6 CONCLUSION pg 40 4 REPORT ON THE RENTAL PROPERTY MARKET IN THE GÖTEBORG REGION 2008 THE GÖTEBORG REGION COORDINATES ACCESS TO LAND FOR TRADE AND BUSINESS In a situation with a shortage of large, connected region is reconfirming its position as Sweden’s best logis- areas of land for transport, commerce and logistics tics region. companies, there is a higher demand for a compre- Every year, Business Region Göteborg publishes the hensive approach and a good overview over the local property report containing information about lo- region’s local and real estate market. This is one cal property trends in the Göteborg region. The report is condition for effective and rational business estab- based on openness and sound collaboration between the lishment and relocation within the region. Business Göteborg region’s business leaders, banks, finance insti- tutes, property owners, city building and property office, Region Göteborg coordinates business activities for and other partners. This year’s edition of the report was the Göteborg region. Over the year, Business Region produced in cooperation with Jones Lang LaSalle. Göteborg, the Göteborg region’s local federation Business Region Göteborg has a land and property ser- (GR) and the municipalities in the region have con- vice that free of cost can help companies in the process of ducted a project “Land for the commercial and indus- setting up an organization with market data, counseling trial life” aimed at creating a land database that will and contacts. Land and property information can be ac- provide companies with a better overview of avail- cessed at our web site www.businessregion.se. able land in the region. If you have any comments about the property mar- ket or business establishment process in the Göteborg Despite the economic downturn and a sluggish financial region, or if you have any questions about the report, market, the Göteborg region remains extremely attrac- please contact Roger Strömberg, tel +46 31 61 24 12 or tive for investors and several international investments +47 705 42 89 01. Questions about the growth strategy and set-ups were completed in 2007. India-based com- for the Göteborg region will be answered by Henrik Ein- pany ToolTech opened an office and, keen to learn more arsson, tel. +46 31 61 24 19. about our technology and expertise, has to date hired some 25 employees. Several Norwegian companies have business region göteborg expanded and established themselves in the region the September 18, 2008 past years which means that Norway has surpassed Ger- many in terms of the most companies in the Göteborg Roger Strömberg Petra Sedelius Caisa Brunander region. The region holds a special appeal, and it is no surprise that the greatest interest is directed at our geographic location, harbors, airports, the University of Göteborg, Chalmers University of Technology, and our traditions in commerce and industry. The Göteborg region as the Nordic region’s logistics hub is also a strategic factor for establishment that attracts international capital. Accord- ing to the trade journal Intelligent Logistik, Göteborg REPORT ON THE RENTAL PROPERTY MARKET IN THE GÖTEBORG REGION 2008 5 GÖTEBORG’S COMPREHENSIvE 13 STRATEGIC ISSUES PLAN – 13 STRATEGIC ISSUES 1. Göteborg’s role in a 8. Modified transport needs Thirteen strategic issues were defined in the proposal growing region 9. Diverse, safe and humane for the Comprehensive Plan. Goals and strategies have 2. Attractive urban environment 10. Recreation and health 3. Robust society for better quality of life been defined for each issue on the basis of the City of 4. More housing 11. Attractive natural Göteborg’s budget, goals in the Comprehensive Plan 5. Growing and and cultural settings changing commerce 12. Access to the coast for Göteborg (ÖP99), and the work on the Comprehen- 6. Expansive economy 13. Special localization sive Plan. 7. The Nordic logistics center 1. GÖTEBORG’S ROLE IN A GROWING REGION 3. ROBUST SOCIETY Göteborg will be an attractive city for people and enter- In terms of fundamental aspects, Göteborg will be a ro- prises. This can be realized by concentrating activities bust city through safe building and construction, pro- in and developing the region’s core, creating the condi- tected supply of drinking water, and better security in tions for a diversified economy, and improving access by the event of unforeseen events such as accidents and expanding the infrastructure, primarily public transpor- sabotage. By avoiding landslide-prone areas for hous- tation. Attractive residential areas coupled with cultural ing and factories, and taking consideration to the high and commercial city life will be built in Göteborg and a water levels, we can improve our readiness for extreme recommendation has been made to expand the transpor- weather conditions and higher water levels. To safeguard tation system with new links and concentrate new build- the supply of drinking water requires an alternative to ings to the center. The locations for new links over the the Göta River as a source of water supply and that secu- river are planned in order to tie the city’s districts to- rity around the supply is improved. A robust Göteborg gether and make central Göteborg more accessible for also means that the residents can rely on each other and the region’s residents and the people of Göteborg. the municipality and that electronic communication can withstand disruptions. 2. ATTRACTIvE URBAN ENvIRONMENT Göteborg’s planning will provide the prerequisites for an 4. MORE HOUSING attractive urban environment and a rich city life. An att- People who live in and want to live in Göteborg will be ractive city is distinguished by its complexity with a mix offered good housing and a safe, stimulating environ- of functions, visual diversity and the possibility to interact ment in a sustainable urban structure. Planning must with other people. A blended city is the objective, both therefore focus on creating enough of many different when converting central renovation areas and when ad- forms of residence, all with good physical access. The ding to other areas. The basis for all planning must be to focus should be to significantly develop central Göte- give people the possibility to move around in and be in borg and make additions in suburbs and strategic loca- an urban setting. It is increasingly more important to use tions. The Comprehensive Plan indicates the possibility green spaces and water as design elements in a city with of building 2,500 homes per year up until 2025 within denser development. New buildings should enhance the the residential city. The expansion of new, larger hous- city and complement surrounding buildings in a attrac- ing areas in the city’s suburbs must be co-planned with tive manner. All development should be adapted to mini- new regional public transportation connections and is mize the environmental impact. subsequently only possible at a later date. 6 REPORT ON THE RENTAL PROPERTY MARKET IN THE GÖTEBORG REGION 2008 5.GROWING AND CHANGING COMMERCE needed, chiefly in Hisingen. Gullbergsvass, which today Population growth coupled with higher buying power houses logistics companies and a combi terminal, is part has lead to a significant increase in turnover in the re- of the plans for a new mix of urban construction, which gion’s commerce. The conditions will be created for a means that the combi terminal must relocate. The Na- commercial and service structure that provides good tional Rail Administration will examine alternative sites access for all consumers, competition-promoting estab- for the combi terminal. A location near Sävenäs has been lishment opportunities for companies, that takes envi- proposed on the land utilization map, although other ronmental issues into consideration, and that promotes locations are also possible. It is also necessary to contin- good architecture. This can be done by continuing to ue to discuss the location of the ferry terminal and the expand the current central structures. The City of Göte- Vänern Line’s development to see whether these func- borg should be developed as the predominant center. tion can be combined to offer more transports over the Larger shopping centers and locations are intended to Göta River. alleviate the pressure on the city and provide a higher level of service. The conditions for local squares and 8. MODIFIED TRANSPORT NEEDS local shops will be improved, and volume commerce Transports by car and truck are escalating and this in- should be gathered in one area to enable more effective crease leads to congestion and air pollution which is why traffic solutions and a stronger base for public transpor- public transportation should assume a greater share of tation. Spreading commerce activities into industrial ar- the traffic. The goal is to create a traffic and develop- eas should be avoided. ment structure that is adapted to a more effective and sustainable community with good access and a safe traffic 6. ExPANSIvE ECONOMY environment. The K2020 project is aimed at intensifying The economy of the Göteborg region has over the past public transportation travel. Realizing the goal demands twenty years morphed from industry dominated to more a new public transportation structure for Göteborg with knowledge-based. The goal is that Göteborg will create more tram connections across the river and moving the a strong, sustainable growth, a high level of employment bus network from Brunnsparken to a city ring in Allén. and a diversified economy by offering good opportuni- Growth in West Sweden also mandates an investment in ties for setting up different types of companies and busi- the railroad. An expansion of the Västlänken (West Link) ness while concurrently improve access to Göteborg. is vital to boost capacity and provide the opportunity for The Comprehensive Plan has areas and locations which more direct journeys. The present Götaälv bridge needs are fundamental for Göteborg’s future development. to be replaced and more connecting roads over the river are needed. Aspects of the traffic system need to be de- 7. THE NORDIC LOGISTICS CENTER veloped to tie together different districts and make room The volumes of goods in and around Göteborg are grow- for better public transportation. The Comprehensive Plan ing steadily, particularly in terms of traffic in Göteborg’s underscores the crucial correlation between development Port. Göteborg and the harbor will be strengthened as planning and traffic. Good public transportation should the Nordic logistics center. Since more of the goods to be in place before construction on new areas begins. A and from the harbor will run on the railroads, the harbor densely developed city makes it possible for more people track must be developed. The municipality feels that there to walk or bike. Development should be concentrated to are two feasible alternatives: one with short tunnels near the locations where public transportation is good, such as the current track, or one with a longer tunnel. New areas at the proposed locations. for logistics companies are needed. To provide service to the harbor and the industries, more business areas are REPORT ON THE RENTAL PROPERTY MARKET IN THE GÖTEBORG REGION 2008 7 9. DIvERSE, SAFE AND HUMANE forming an attractive and sustainable Göteborg by pre- Göteborg will be a safe city where everyone can feel serving and making particularly valuable and irreplace- comfortable in public places and have the opportunity to able natural, cultural and outdoor settings more tangible meet. This will be realized by creating a better mix with and more accessible. Planning will be based on a mutual well-designed public spaces where barriers are overcome and comprehensive outlook on the natural and cultural and districts are linked together. The diverse needs of values supported by present-day facts. the city’s people will also be considered through better dialogue in the planning process. 12. ACCESS TO THE COAST Good access to coastal areas, lakes and waterfronts will 10. RECREATION AND HEALTH FOR BETTER qUALITY OF LIFE be promoted by linking the coastal areas and other parts Göteborg will be able to offer good opportunities for of the city with paths, sidewalks, bike routes and public recreation and be a healthy, humane and safe city by im- transportation. Future planning will promote a diverse proving access to green areas, games, sports and club ac- selection of activities, experiences and service along the tivities. Natural, cultural and recreational areas that are entire coast and in the archipelago. We will strive for a removed will be compensated. It is vital that the correla- coordinated approach to management of the coastal tion between traffic and ill-health is observed and that zones in respect to nature and cultural values. activities focusing on public health, social issues, safety issues, road safety and physical access are recognised in 13. SPECIAL LOCALIzATION the physical planning. As Göteborg is being more developed, it becomes more difficult to find localizations for businesses that cannot 11. ATTRACTIvE NATURAL AND CULTURAL SETTINGS be combined with housing. The goal is to satisfy enter- Natural and cultural settings are immensely attractive prises’ development needs while keeping disturbances at and extremely valuable aspects of urban development. a minimum. This can be done by creating suitable lo- Göteborg has everything from unexploited, open coastal cations for such operations and distributing these areas landscapes to valuable culture-historical urban environ- better within the region. An intermediate storage of pol- ments, uncovered monuments and rare species. Natural luted masses is one example of such localization and the and cultural values will be emphasized and contribute to locations are presented on the planning map. Photo: Karim Hatoum Source: Proposal for the Comprehensive Plan for Göteborg, Summary Exhibition Local Building Committee April 1, 2008, Town Planning Department 8 GROWTH G O R W TH 1 Photo: Karim Hatoum GROWTH 9 600,000 NEW RESIDENTS IN THE COMMUTER REGION ThE bEST REGioN FoR ENTREpRENEuRShip iN EuRopE AND POWERFUL INvESTMENTS ON THE CITY CORE The Göteborg region was recently named the best region The Göteborg region recently adopted a long-term strat- for entrepreneurship out of 21 European major cities. egy for sustainable growth. Commuting in the region is The award was presented by European Cities Entrepre- growing which means that the labor market region with neurship Ranking (ECER) which compared the enter- Göteborg as the core city is a larger part of West Sweden. prises’ owns assessment of the business climate in their The goal is to become an integrated commuting region respective regions. and a regional market with 1.5 million inhabitants by 2020. The study was conducted by ECER together with re- To realize this goal requires extensive expansion of searchers from universities in six different countries. In the region’s traffic capacity and major inner-city invest- total, 1,700 enterprises were interviewed in 21 cities. The ments. Plans for the period up until 2020 include concen- selection in each city included a mix of innovative com- tration to and expansion of the region core with 40,000 panies (companies holding patents), classic enterprises residents and 30,000 workplaces plus peripheral facilities (commerce, industry and service sectors), and self em- for top-rate service, culture, events, seminars and trade ployed. The common denominator for all the companies shows. However, not only the core will grow but growth was that they started operations during the past three will spread throughout the region. This means that other years. What makes the study unique is that it is the first parts of the region gain at least 40,000 workplaces and survey in Europe where the enterprises themselves judge 90,000 residents. Another goal is to increase the number the quality of local support systems for entrepreneurship. of residents in the region each year by 8,000 people. Ac- tive regional and comprehensive planning is in progress to SECoND CiTiES DomiNaTE realize this strategy. For more information about the strat- Göteborg was clearly number one in 2007 in the over- egy, visit www. businessregion.se. all ranking list. Göteborg was followed by Stockholm and ECER 2007: TOTAL RANKING ENTREPRENEURSHIP CLIMATE 0 10 20 30 40 50 60 70 Göteborg 120 Stockholm Birmingham 100 Amsterdam London 80 Geneva Brussels Warsaw 60 Berlin Lyon 40 Lille Frankfurt 20 Munich Barcelona Madrid Porto Milan Marseille Rome Lisbon Paris Source: ECER 2007 10 GROWTH then Birmingham. Metropolises such as London, Paris more difficult for the capitals to satisfy the need for sup- and Berlin were further down on the list. Two phenom- port programs. ena stand out: With the exception of Berlin, the capi- Not only does Göteborg rank as number one in the tals all ended up after the country’s second city. Cities compiled ranking, it also tops the list in two of the sub- in northern Europe rank higher than cities in southern categories and comes second in the other three sub-cate- Europe where the companies appear to have other ex- gories. It is evident that Göteborg and Sweden have prior- pectations on actual guidance while companies in the itized guidance/promotion and ante-creation guidance. north appear to have a more self-sufficient approach to Particularly noted was the significance of the incubator, entrepreneurship. The capitals appear to be negatively as well as Göteborg International Bioscience Business affected by their size and the number of players which School (GIBBS), Chalmer’s Entrepreneurship School and makes it more difficult to grasp and therefore makes it the initiatives conducted by Business Region Göteborg. ECER 2007: RANKING PER SUB-CATEGORY Total ranking Guidance and Ante-creation Post-creation Financing Economic promotion guidance guidance environment 1. Göteborg 1 2 1 2 2 2. Stockholm 3 1 2 6 5 3. Birmingham 2 7 4 3 1 4. Amsterdam 4 4 3 8 3 5. London 10 5 7 4 6 6. Geneva 9 6 5 10 4 7. Brussels 6 3 11 5 9 8. Warsaw 5 12 6 1 18 9. Berlin 17 10 8 9 10 10. Lyon 14 9 12 11 7 11. Lille 11 8 10 7 12 12. Frankfurt 13 15 9 13 13 13. Munich 8 14 14 15 14 14. Barcelona 12 11 16 17 17 15. Madrid 7 20 15 20 8 16. Porto 18 16 18 16 11 17. Milan 20 13 13 19 20 18. Marseille 15 19 20 14 15 19. Rome 21 18 17 12 21 20. Lisbon 19 21 19 18 19 21. Paris 16 17 21 21 16 Source: ECER 2007 The survey was financed by the French bank Banque Populaire, the television channel Euronews and the European Commission. GROWTH GROWTH 11 Photo: Karim Hatoum 2 12 THE TRANSACTION MARKET ACT IO T RA NS T HE THE TRANSACTION MARKET 13 A RK ET Karim O N M Hatoum Photo: 14 THE TRANSACTION MARKET Both domestic and foreign investors showed a great deal of interest in Sweden’s property market in 2007. TRANSACTION VOLUMES PER SECTOR However, the autumn’s credit turmoil altered the mar- ket conditions and banks and investors have become more cautious in business dealings. Logistics 13% 2.1 TRANSACTION vOLUME In 2007, real estate transactions valued at SEK 129.7 Office billion were completed in Sweden, which is slightly less 41% Retail compared to the transaction figures for 2006 of SEK 17% 132.2 billion. Of the total transaction volume, 41% in- volved office property, 17% retail and 13% logistics and industrial property. The distribution between different types of property is basically identical to 2006. In total, the share of transactions in logistics property has swelled the past years as the direct yield levels for segments such Mixed 29% as office and retail dropped considerably causing inves- tors to look for property in other segments. In addition, Source: Jones Lang LaSalle it is no longer considered less prestigious to invest in lo- gistics property than offices and retail as it was in certain A shift was discernable during the fourth quarter 2007 circles a few years ago. Alongside office and commercial on the heels of the market’s credit turmoil. Investors be- real estate, major investors now view logistics properties came more reluctant, highly encumbered investors had as an accepted form of investment. more difficulty competing, fewer bids per object were The past year, Sweden emerged as the fourth largest made and the transaction processes became longer. This transaction market in Europe and gained international means that yield levels have stabilized with an upward repute, primarily due to sound GNP trends compared to adjustment of 0.25 percentage points for prime real es- many other European countries. Moreover, the Swed- tate. The largest real estate transaction in 2007 was the ish market is distinguished by transparency and sound Norwegian company Acta Förvaltning’s acquisition of liquidity. In 2007, foreign players were involved in cross- Lindholmen 30:1 on Norra Älvstranden which was pur- border deals valued at SEK 74 billion or 57% of the total chased by the Royal Bank of Scotland. The property transaction volume in Sweden. The three single largest measures 37,000 m2 and is leased in its entirety to Er- markets in Europe are the UK (30%), Germany (21%) icsson, the company for which the property was built in and France (12%) which together answer for over 63% of 2002. This deal was the single largest deal made outside the total sales. It is interesting to note that Sweden an- Stockholm in terms of office property. A second inter- swers for over 5% of the total transaction sales and that esting deal completed in 2007 was when the U.S. pri- we only have 1.5% of the total area in Europe. vate equity firm The Blackstone Group sold Bastuban The total transaction volume in Göteborg for 2007 rose 1, better known as Europahuset, in August. The buyer by 10% from SEK 8.7 billion to SEK 9.6 billion com- was Nordea Market in Norway and the purchase price pared to 2006. Interest from foreign investors was solid landed at over SEK 700 million, with a direct yield just in 2007 and these players were involved in over 67% of over 6%. the total transaction value in Göteborg for all of 2007. THE TRANSACTION MARKET 15 These figures can be compared with the SEK 540 million bought the shopping mall 421 in Högsbo for SEK 811 that Blackstone paid Platzer Fastigheter for the property million. The seller was Aspelin-Ramm and the property just two years earlier, marking more than a 30% increase measures over 33,000 m2 of retail space and the direct in value. The largest transaction for retail property com- yield on the deal was about 5%. pleted in Göteborg in 2007 was when Eurocommercial TRANSACTION VOLUME PER YEAR AND ORIGIN 120000 Domestic capital 100000 Cross-border deals 80000 60000 40000 20000 0 2003 2004 2005 2006 2007 Q1 2008 Source: Jones Lang LaSalle 2.2 DISTRIBUTION OF CAPITAL With 45% of Sweden’s total transaction volume in 2007 TRANSACTION VOLUME PER REGION (43% in 2006), the Stockholm region still dominates as the single largest region in terms of invested capital. Malmö Göteborg is stable at the same level (8%) in 2007 as in 2007 Göteborg 3% 2006. In total, the rest of Sweden has the past years seen 8% an increase in capital invested in the country, a trend based on the fact that Sweden has enjoyed good growth and that Sweden is a stable country in which to do busi- Stockholm ness. This gives international investors an incentive to 45% expand their holdings in other parts of the country. In the Stockholm area, both domestic and foreign players were active and one of the most noted deals was Boult- bee’s acquisition of Centrumkompaniet for over SEK Rest of 10.4 billion. In total, the Swedish market attracted sev- Sweden 44% eral new players in 2007, there among France-based Un- ibail, the Icelandic Stodir and the UK company Nordic Retail Fund. Source: Jones Lang LaSalle 16 THE TRANSACTION MARKET 2.3 FUTURE TRANSACTION MARKET TRENDS Stabilizing and elevated yield levels have contributed to In 2008, we expect that the trend of rising required direct making the Swedish players more active on the market in yields will continue for high-quality property in prime lo- Q4 2007 and Q1 2008. Most recently we have been able to cations. The risk increase will however be higher on real discern among foreign investors a greater interest in proper- estate out in the country than in Göteborg and other big- ties that have or will have vacancies since they see greater city regions. Banks are more particular in granting credit potential for growth there and potential to improve operat- which has prolonged business deals and buyers are now ing revenue after taxes. This trend is expected to continue required to have more equity. But despite the higher risk throughout 2008. Norwegian investors answered for a large aversion and higher financing expenses, the real estate portion of the larger investments in 2007. Acta, DnB Nor market in Sweden and Göteborg is expected to remain at- Markets, Vital, and Nordisk Areal I AS with financing from tractive in 2008. And although transaction volumes will First Securities have all invested substantial amounts in the not reach the levels of 2007, turnover will be good none- Swedish market, particularly in Stockholm. Norwegian in- theless. Moreover, there is the chance that one of Europe’s vestors acquired property in Sweden for SEK 21.6 billion largest real estate deals ever will be completed in 2008 in 2007, which is 17% of the total transaction volume. The when the state sells Vasakronan. This will have a major German funds, which were somewhat passive in 2007, ap- impact on the total transaction volume. pear to be making a comeback in the first half of 2008. MAJOR PROPERTY TRANSACTIONS IN GÖTEBORG 2007 Type Property Location Price Buyer Seller Area (SEK M) (m²) Retail Högsbo 23:4 Högsbo 811 Eurocommercial Aspelin Ramm 33,000 1) Office Bastuban 1 Mölndal 700 Nordea Market The Blackstone Group 42,000 Mix 18 buildings Högsbo 700 LänsPlatzer Platzer AB 97,000 Residential Olivedal 5:24 Centrum 360 Private Wallenstam 4,474 Office 9 buildings Hisingen m fl. 220 Teesland iOG Stena Fastigheter 40,000 Office Backa 20:5 Hisingen 210 Castellum Stampen AB 16,000 Mix 4 buildings Hisingen m fl. 200 Teesland iOG Wallenstam 32,000 Residential Drivbänken 1 Mölndal 200 Private Wallenstam 710 Residential Gamlestaden 10:18 Gamlestaden 175 Private Erik Selin Fastigheter 101 Office Lorensberg 45:16 Centrum 125 Vasakronan Folksam 7,814 2) Retail Tingstadsvassen 3:6 Hisingen 110 Fastighets AB Balder Privat 3,825 Office Lindholmen 28:1 Norra Älvstranden 104 Vasakronan GFK Personal AB 3,674 Office Lindholmen 30:1 Norra Älvstranden Conf. Acta Förvaltning Royal Bank of Scotland 37,000 3) Comments: 1) Shopping mall 421 2) Building in the middle of Göteborg. Fully leased. 3) Largest deal completed outside of Stockholm for office buildings. Source: Jones Lang LaSalle, fastighetsvärlden, Data from Q1 2008 THE TRANSACTION MARKET 17 Photo: Karim Hatoum 3 18 OFFICE SPACE PAC E I CE S O FF Photo: Karim Hatoum OFFICE SPACE 19 OVERVIEW GÖTEBORG CBD (CENTRAL BUSINESS DISTRICT) a HISINGEN Norra Älvstranden Gullbergsvass Gullbergsvass Lindholmen Science Park Kålltorp Nordstan Centralstation NORRA ÄLVSTRANDEN Gårda CBD EASTERN CBD GOTHENBURG Within Gothenburg Ullevi Business School Vallgraven Chalmers University REST OF INNERCITY of Technology Sahlgrenska E6 University Hospital Vasastaden WESTERN E20 20 km Liseberg GOTHENBURG MÖLNDAL Source: Jones Lang LaSalle 3 OFFICE SPACE more central submarkets (the CBD and other inner-city The real estate markets in Sweden and Europe have en- locations). This trend is a typical ”boom trend” trigge- joyed strong growth with a drop in vacancies and good red when companies have strong growth that gives them growth in rent rates the past years. The recent boom is more liquid funds. The result was a greater demand on also evident in the re-localizations made within the of- central, modern offices that offer high quality and high- fice space market in Göteborg. Companies, particularly tech standards in 2007 so that vacancies in Class A proper- in the service and IT sectors, are expanding and moving ties are relatively low in the region. Estimates show more to bigger and better, more centrally-located offices while than 6,300 square meters (2.9% of the total space in Class fewer companies are relocating to cut costs. A properties) vacant space in this segment in the entire re- gion. The meager selection of Class A properties has made 3.1 vACANCY TRENDS it more difficult to match property owners and tenants The strong financial growth of 2007 generated strong and increasingly more property owners are now finding employment growth, particularly in the service sector and it difficult to find suitable offices for larger tenants within a more intense demand from expanding companies cau- their own holdings. sed vacancies to drop in the Göteborg region. From Q1 The subsequent vacancy trend in Göteborg depends 2007 to the Q1 2008, the total vacancy rate dropped by on the employment rates. Since employment rates are ex- 2.3 percent from 10.3% to 8.0% (Göteborg, Mölndal, and pected to remain strong throughout 2008 and office spa- Kungsbacka). The city, Norra Älvstranden and Mölndal ce in the form of new offices are basically already leased report the biggest change in vacancy rates the past year. by the time of completion, we predict that vacancies will While all sub-markets report the same decline in vacan- continue to drop for Göteborg as a whole. Vacancy rates cies, Q4 2007 and Q1 2008 did deviate when vacancies are expected to continue to decline, landing at about 7% rose slightly on more outlying submarkets such as West for all of Göteborg at the close of 2008. Europe’s strong Göteborg and Mölndal. This increase in these smaller economic situation in 2007 lead to a strong demand and submarkets are however in line with the trend observed office vacancies plummeted in most European cities. The throughout 2007 when several companies moved from average vacancy rate in Europe for Q1 2008 was 7.1%. the outer areas (like Hisingen and West Göteborg) in to The lowest vacancy rate among the surveyed cities was 20 OFFICE SPACE reported for Warsaw at 2.5% while Frankfurt had the hig- hest at 13.0%. Of the major Swedish cities, Stockholm VACANCY RATES, GÖTEBORG (%) Q1 2008 still has the highest vacancy rate (10.5%) followed by Gö- teborg (8.0%) and then Malmö (6.5%). 25% Demand is expected to remain strong in Europe th- roughout 2008 which, together with a relatively small 20% addition of newly developed offices, is expected to cause vacancy rates to fall even more, despite assumptions that 15% the economy will weaken. 10% 3.2 NEW DEvELOPMENT PROjECTS New development projects, which were few in 2007, will 5% accelerate slightly in 2008 with the completion of over 25,000 sq m of office space. Examples of projects that will Q2-01 Q4-01 Q2-02 Q4-02 Q2-03 Q4-03 Q2-04 Q4-04 Q2-05 Q4-05 Q2-06 Q4-06 Q2-07 Q4-07 be completed in 2008 include the extension of the Policy Station in Ullevi Park, the renovation of Gamla Hassel- Göteborg totalt Mölndal Västra Göteborg bladshuset and the new development of Krokslätt’s fac- Norra Älvstranden CBD Övriga innerstaden tories, corresponding to just over 0.8% of the total stock. It is worth noting however that basically all new office Comparison Göteborg’s submarkets Source: Jones Lang LaSalle VACANCY RATES (%) Q1 2008, COMPARISON WITH EUROPEAN CITIES Frankfurt Dublin Amsterdam Düsseldorf Stockholm Brussels Berlin Budapest Munich Göteborg Helsinki Hamburg Milan Malmö Barcelona Moscow Oslo London Madrid Warsaw 0 2 4 6 8 10 12 14 Source: Jones Lang LaSalle OFFICE SPACE 21 space on the market generated through new development 3.3 DEMAND and renovation projects in 2008 was rented by the time Most of the property owners on the Göteborg market re- of completion. Consequently, companies that want to re- port a strong 2007, leading in many instances to a short- locate to new buildings in 2008 will find it difficult to age of primarily smaller offices measuring maximum find office space which may attract developers to launch 500 sq m, and good quality offices with high-tech stan- “dormant” projects, such as Bygg-Göta’s project in Pa- dards. The demand for smaller offices remains high in goden (Gullbergs Strandgata), PEAB’s project in Lyck- Göteborg and over 70% of the new leasing activity refers holm’s Factories (Nellickevägen) and Wallenstam’s project to offices measuring no more than 1,000 sq m. This is in Almedal’s Factories (Skårs led). largely because many expanding smaller companies are In 2009, new development projects are expected to re- looking for offices that signify an economic boom. A lack main at the same level of 2008 with the completion of of employees may have stifled growth slightly, making a the new police building, Rättscentrumet near Ullevi Park prime location and the image factor more central in at- and some office space in Hisingen. We expect to see more tracting qualified staff, a fact that particularly benefited projects completed in 2010 and estimate that over 87,00 CBD in 2007. sq m will be completed this year, which should add to the In 2008, companies with fewer than 20 employees current stock of over 2.8%. Projects that have scheduled are expected to answer for most of the new jobs creat- completion for this year included the Navet extension on ed which benefits continued demand for smaller offices. Lindholmspiren 3 on Norra Älvstranden, the new police We do see a trend for companies to request lease agree- building at Rättscentrum and Skanska’s project in Gårda. ments with deviation clauses or clauses for optional space New development is relatively spread out in the region, al- and that they choose open floor plans in order to more though the majority will be completed in Norra Älvstran- quickly accommodate staff changes. den and Remaining inner city. Södra Älvstranden and the New leasing activity among the 25 largest property large terminal adjacent to the railroad near the central sta- owners, which represent over 70% of the total market, tion are a few examples of interesting future development amounted to 100,000 sq m in 2007, slightly less than areas where there are advanced plans to build both resi- the 122,000 sq m leased in 2006. Applied to the total dential and commercial property. stock, this means a turnover of 165,000 sq m in 2007. OFFICE PROJECTS GÖTEBORG Project Submarket Developers Area Planned (sq m) completion Nordstaden CBD NCC 13,000 2008 Krokslätts Factories Mölndal Husvärden 2,600 2008 Ullevi Park Phase 1 Police station Remaining inner city Vasakronan 15,000 2008 Ullevi Park Phase 2 Courthouse Remaining inner city Vasakronan/NCC 17,000 2009 Frölunda Torg Västra Göteborg Diligentia 5,000 2009 Projekt Gårda Remaining inner city Skanska 18,000 2010 Lindholmspiren 3 Norra Älvstranden Älvstranden Utveckling 15,000 2010 Source: Jones Lang LaSalle 22 OFFICE SPACE Eco-friendly buildings and offices are a trend gain- ing in popularity among tenants and property owners RENT SPAN PER SUB-MARKET in Göteborg. More properties are conforming to EU’s Green Building program and more buildings are being Svan accredited. Over 40% of the total energy consump- 2500 tion in Sweden goes to buildings and research indicates that up 22% of the carbon dioxide emission levels from 2000 buildings can be eliminated by more effective energy Kungsbacka ‹ SEK/sq m/year › Mölndal use. There is a growing awareness in the industry of the Göteborg Västra Göteborg Östra 1500 Hisingen CBD correlation between energy use, the emission of green- house gases, other harmful environmental influences 1000 Övriga Innerstaden Älvstranden Norra and the cost of energy. Consequently, it is important to weigh in the effects of this when building and managing 500 buildings. The property owners are now actively looking for more eco-friendly alternatives for power supply, heat- 0 ing and ventilation and we see an escalating interest in biogas, district heating and district cooling. Source: Jones Lang LaSalle 3.4 RENT TRENDS The prime rent rates in Göteborg have been stable during leases in this segment. The Class A objects that remain are the period 2001-2006 despite relatively major vacancy chan- often difficult-to-rent units and the attraction of Class B+ ges. This is mainly attributed to the extremely low access to and B objects increases thereby pushing up rent rates for Class A property which results in few new leases. Prime rent these types of offices. The best rent increase potential in in CBD was adjusted upward in 2007 by SEK 50 to SEK the future lies with the properties that best match current 2,250 per sq m, which is also the rate of prime rent for Q1 demands, i.e. that can offer small to medium-sized business 2008. Rents were pushed up with the leases in Läppstiftet’s premises with open floor plans and good technical stan- high-rise and by advanced leases in new development pro- dards. jects, including NCC’s project in the old Hasselbladshuset. Prime rent in the best office locations (CBD) is on the Office shortage is also pressing rent rates up in less central rise in most European cities. The average increase in Eu- submarkets such as Mölndal and Norra Älvstranden. There rope between Q1 2007 and Q1 2008 was just over 9%. should be room for more prime rent increases within a rela- The highest increases are reported for Warsaw (+32%), tively short perspective since access to Class A property is as Moscow (+31%), Budapest (+19%) and London (+18%). previously mentioned extremely limited. At the same time, Due to low vacancy rates in the Class A segment, chances vacancies in premises of a slightly lower standard (Class B+) are good that 2008 will see continued strong growth, alt- but in good locations, are beginning to drop. Our estimates hough probably not levels equal to those of 2007. suggest that there is every chance prime rates will reach SEK 2,350 per sq m in 2008. The past quarters, rent levels for Class B property have begun to exceed prime rent rates, a natural turn of events at the end of an economic boom when the selection of prime objects is considerably limited and restricts the amount of OFFICE SPACE 23 PRIME RENT, EUROPEAN CITIES ‹ Euro/sq m/year › London Moskva Paris Dublin Milano Oslo Madrid Stockholm Frankfurt Warsava Amsterdam Barcelona Bryssel Helsingfors Köpenhamn Hamburg Budapest Berlin Prag Göteborg Malmö 0 200 400 600 800 1000 1200 1400 1600 Prime Rent – European cities; Source: Jones Lang LaSalle 24 OFFICE SPACE 3.5 REqUIRED DIRECT YIELD Interest in Göteborg’s real estate market is still strong, and expectations for relatively good growth in 2008. It from Swedish and foreign investors alike. This means that is possible to discern a growing interest from foreign in- direct yield levels dropped to low levels for the region in vestors for property with vacancies and future vacancies 2007, and reached an all-time low of 4.60%. Due to the where they see a greater potential for growth and where current credit turmoil on the market, a shift was discern- there is potential to improve operating revenue after taxes. able on the market in the fourth quarter 2007. Investors This trend is expected to continue through 2008. became more reluctant, highly encumbered investors had more difficulty competing, fewer bids per object were made and the transaction processes became longer. This PRIME YIELD PER SUBMARKET means that yield levels have stabilized coupled with an upward adjustment of 0.25 percentage points for prime real estate - such as in CBD where prime yield was adjust- 10% ed upward by 0.20 percentage points to 4.80 and Norra Älvstranden where prime yield was adjusted upward 0.25 percentage points from 5.5% to 5.75%. This trend remained steady during the first half of 2008 8% with yet another upward adjustment for prime yield and a slightly high yield increase for Class B property. Prime yield in CBD was 5.20% for Q1 2008. The trend for di- rect yield levels in Remaining inner city mimicked that of 6% CBD and the prime yield levels was adjusted down below 2007 to 5.50%. During the latter half of 2007 and the beginning of 2008, yield levels rose here too and were at 5.75% Q1 2008.The stabilized and higher yield levels 4% have contributed to making the Swedish players more ac- West Göteborg Norra Älvstranden CBD tive on the market. The increasing yield levels are however Mölndal Remaining inner city compensated to a certain extent by the good rent market Source: Jones Lang LaSalle OFFICE SPACE 25 4GISTICS 26 LOGISTICS LO Photo: Karim Hatoum LOGISTICS 27 LOGISTICS 27 28 LOGISTICS 4. LOGISTICS Once a year, the trade journal Intelligent Logistik sur- out-and-out property developers who build new, either veys which cities are Sweden’s best in terms of logistics with the objective of selling immediately and/or leasing and compiles a list. Göteborg has topped this list every after completion or for long-term management. The first time (six times). There are several reasons for this: type of developer seldom builds on speculation, but in- stead custom-builds each building for a certain tenant. • Göteborg’s port is the most important port Example of new development activities for warehouse in Sweden since most of the goods from and logistics property in the Göteborg area are listed be- the U.S.A. and Asia headed for the Nordic low: countries arrive here. • Skanska is building a new logistics unit for • The proximity to other major cities in the Nordic DHL measuring more than 20,000 sq m in countries such as Malmö and Oslo increases Backa. The unit is scheduled for completion in dependency on a good logistics service in Göte- 2009. borg. At the same time, about 70% of the Scan- • ProLogis is planning to build yet another lo- dinavian industries are all within 500 km. gistics unit in Torslanda. This building will • Chalmers in Göteborg offers an academic measure over 15,000 sq m and is expected to logistics education program. be completed in 2009. • Just outside Göteborg is Landvetter’s airport • Papyrus is planning to build a new central which can quickly transport goods to other warehouse in Arendal. It measures over 27,000 parts of the country. sq m and construction is scheduled to begin in the autumn of 2008 and finish in the spring • Finally, the infrastructure in the city is logistics of 2010. friendly. The Göteborg region as a logistics location benefits enor- Logistics buildings developed in Sweden today com- mously by Göteborg Landvetter Airport, from which monly have pre-leased spaces. It is uncommon for devel- there are freight routes to the U.S.A. and Asia. In addi- opers to build on speculation. There are however excep- tion, the airport is trafficked by most of the major freight tions, the most well-known being ProLogis, which has companies and is today one of the largest in Scandinavia built premises on speculation all over Sweden, which in in intercontinental air freight. More than 60,000 tons are turn means that the vacancy rate for brand-new logistics transported via the airport every year. Through invest- property is low, less than 2-3% in all of Sweden. Even ments in the airport and by ensuring new development the spaces that ProLogis has built the past years are oc- projects in 2007, The Swedish Civil Aviation Administra- cupied suggesting that there is a vast need for good and tion expects to double the airport’s cargo capacity. modern logistics buildings in Sweden today. On the other hand, it is more difficult for property 4.1 vACANCIES, NEW DEvELOPMENT owners to lease premises that date back to the 1960s and PROjECTS AND DEMAND 1970s. These premises are seldom flexible and often lack In total, vacancy levels are low in Göteborg, below 4% good planning. The vacancy rate for Sweden is therefore for modern warehouses and logistics property. On the relatively high compared to the rest of Europe. Estimates other hand, there are a fair number of vacancies in older indicate that the vacancy rate in Sweden is between 10 industrial premises with few docks. Today, it is mostly and 15% while the rest of Europe reports rates of be- LOGISTICS 29 tween 5 and 10%. Vacancies did however drop during for diminishing its climate impact. Even if the afore- the boom and are closer to 10% at present. Oftentimes, mentioned make demands primarily on the actual user higher vacancy rates in Swedish towns in the country- and not on the property owners, it means that property side push up the figures, while vacancy rates are some- owners will be indirectly affected. There is an increas- what lower in the typical logistics and industrial cities of ing demand for railroads directly into the premises. At Göteborg, Jönköping, Norrköping and Örebro. the same time, there is also a growing demand that the The logistics sector is also experiencing a greater in- actual building is “green” and for more combi terminals terest in the environment. The transport sector is the so that the number of transports can be reduced. only sector in Sweden today that steadily increases its emission levels, answering for over one third of all of 4.2 RENT RATES Sweden’s carbon dioxide emissions and over one third of Rent rates for warehouse and logistics property on the the emission of liquid hydrocarbon. While shipping and Göteborg market were relatively stable throughout air freight have decreased or maintained their emission 2007. We did however notice an increase on the Stock- levels, road freight’s emission levels are climbing. Giv- holm market which tends to influence other parts of Karim en that there are today about 53,000 trucks in Sweden, Sweden though with a certain delay. it is not difficult to understand that emission levels are Prime rent, or the top rent rates for warehouses/lo- extremely high. Increasingly louder voices are demand- gistics property larger than 10,000 sq m in Göteborg ing that the transport sector start taking responsibility is at SEK 600–650/sq m. The difference in rent rates Hatoum Photo: AVERAGE TOP RENT RATES, WAREHOUSES IN EUROPE ‹ Euro/sq m/year › London Oslo Dublin Helsinki Barcelona Moscow Stockholm Amsterdam Birmingham Madrid Göteborg Manchester Budapest Frankfurt Warsaw Hamburg Rotterdam Berlin Paris Brussels Prague 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 30 LOGISTICS compared with smaller warehouse and logistics proper- in such a short time for logistics property in particular is ty, i.e. up to 5,000 sq m is slight since prime rent in this that logistics property has become an investment alter- segment is SEK 700–750/sq m. native since the direct yield levels for segments such as It is possible to rent older warehouse and logistics office and retail dropped considerably causing investors property in good condition in Göteborg for about SEK to look for property in other segments. In addition, it is 400–500/sq m depending on the property’s parame- no longer considered less prestigious to invest in logis- ters. Of particular significance are ceiling height, loca- tics property than offices and retail as it was in certain tion, infrastructure access, number of loading docks and circles a few years ago. Alongside office and commercial the standard of the property. As for older warehouses real estate, major investors now view logistics properties with low ceilings, the market rent is SEK 350-400/sq as an accepted form of investment. m. The area around Backa stands out in terms of rates We have seen a rise in direct yield during the most re- with rents ranging between SEK 500-550/sq m for lar- cent quarter. For logistics property in Göteborg measur- ger warehouses. For smaller new-built units in the area, ing more than 10,000 sq m, prime yield is now 6.05%, i.e. up to 3,000 sq m with some offices, rents reaching while the figure for logistics property in Stockholm me- SEK 1,000/sq m have been reported. asuring less than 5,000 sq m is now 6.55%. Obviously, the Terminal buildings that commonly have loading docks bank situation in the U.S.A. is the reason for the increase. on both ends of the building are a good example of whe- The situation has made it more difficult for investors to re the design of the property is clearly reflected in rent borrow money from banks to buy property, which in turn levels. Since the loading docks entail considerably higher has pressed down property prices. In terms of logistics investments the rent rates are higher. In Göteborg, we es- properties we see the greatest differences in Class B and timate the interval at between SEK 750 and 850/sq m. C locations. For real estate in Class B locations like Jön- From a European perspective, the top rent rates in köping yield has risen between 0.50% and 0.75% while Göteborg are slightly over the port city of Hamburg property in Class C locations like Östersund have seen an and as for Europe’s largest port – Amsterdam/Rotter- increase in required direct yield of about 1.0%. dam – there are differences in rent rates. In Rotterdam, the rents are lower compared to Göteborg, while they DIRECT YIELD LEVELS are higher in Amsterdam. In all, this means that the rent rates in Göteborg are not markedly different from its three largest logistics competitors. Otherwise, Oslo had 9,5% the largest rent increase in Europe for this type of pro- 9,0% perty with an increase of over 10% since Q1 2007. 8,5% 8,0% 4.3 REqUIRED DIRECT YIELD 7,5% 7,0% When we entered the new millennium, direct yield for 6,5% logistics property was at 8.50–9.00%. Since then we’ve 6,0% watched the figures drop considerably to last year’s low 5,5% at 5.75% for logistics property in Göteborg measuring 5,0% more than 10,000 sq m and 6.25% for logistics property 4,5% Q2-00 Q4-00 Q2-01 Q4-01 Q2-02 Q4-02 Q2-03 Q4-03 Q2-04 Q4-04 Q2-05 Q4-05 Q2-06 Q4-06 Q4-07 Q1-08 in Stockholm measuring less than 5,000 sq m. At most, direct yield levels dropped in 2006 when the yield for Prime Yield Stockholm Prime Yield Göteborg/others logistics property in Stockholm fell by 1.75 percentage points. The reason why direct yield has fallen so much Source: Jones Lang LaSalle Photo: Karim Hatoum LOGISTICS 31 32 LOGISTICS 20 TOP NS ’S DEN S LOCA TIO Photo: Kristian Pedersen, Stadsbyggnadskontoret S WE TIC LO GIS THIS PAGE IS AN AD FROM INTELLIGENT LOGISTIK Below is a list of Sweden’s best logistics locations/ going direct routes and commuters for railroad goods regions for 2008. It represents the best establishment is an advantage when increasingly more consumer prod- locations for central warehouses with distribution of ucts are imported from Southeast Asia. World-leading consumer products, chiefly within all of Sweden but auto clusters, excellent transport infrastructures, leading also in the rest of the Nordic countries. academic logistics education programs and a strong re- gional collaboration make Göteborg number one. The Geographic and demographic locations are most impor- land shortage has been resolved but the traffic situation tant in terms of ranking on the list of Sweden’s top logis- in the city and the shortage of railroad tracks to the har- tics locations. Sweden’s demographic center is between bor are a problem. Moreover, Stockholm which before Örebro and Norrköping. This means that the popula- ranked at the bottom of the list, has acquired a number tion-dense Öresund region, as well as almost two-thirds of major logistics organizations in Arlandastad, Rosers- of Sweden’s land which is north of Gävle, is far from berg and Jordbro. A new combi terminal in the north Sweden’s demographic center. can strengthen Stockholm’s position. In terms of labor market figures, Enköping, Håbo and Nykvarn are in- GREATER GÖTEBORG IS STILL NO. 1 cluded in the figures for the Greater Stockholm area as The largest harbor in the Nordic countries with ocean- well as the county of Stockholm. In just a few years, the LOGISTICS 33 Stockholm region’s largest new central warehouse will waiting on a decision about ICA’s future logistics ven- open in Enköping. tures and new sluices that can secure Lake Mälaren’s Both Halmstad and Varberg’s positions improve with shipping future. the extension of the central warehouse. Eskilstuna/Strängnäs will be home to one of this year’s largest new companies, many new companies and jÖNKÖPING/NäSSjÖ THIS YEAR’S SURPRISE a growing combi terminal as well as excellent access to Jönköping/Nässjö climbed from sixth to fifth place, pri- land for new projects. marily due to all the big, new logistics companies. The Sweden’s second-largest container port in Helsingborg, new railroad commuter from Göteborg also makes it a population base of over 2 million and a new large port easier to transport imported goods. for auto imports in Malmö makes the Öresund region Borås climbed to ninth place. The region is evolving stand out as possibly the foremost inter-regional growth as a logistics region with its proximity to both harbors area in the Nordic countries. When Malmö’s northern and airports and a strong, active logistics network in the port area is completed, Malmö will most certainly at- form of Logistics Sweden. tract new logistics companies. Trelleborg was moved to The region of Skaraborg which includes Falköping, the Öresund region on this year’s list. Skara, Skövde, Götene and Lidköping also rose in the Gävle, with a rapidly-growing harbor for ocean ship- ranking this year, in part due to the expansion of Jula’s ping and Sweden’s third largest container harbor, has central warehouse in Skara and in part due to the recent- improved its infrastructure with the new European road ly-opened combi terminal in Falköping. E4 to Uppsala. “We think it’s perfectly fair that our region ranks so “We’ve already secured new business in form of im- highly. The combi terminal is a huge success”, says Leif port of prefabricated units for Uppsala that are shipped Bigsten, Economic Development Officer in Falköping. from the Baltic countries”, says Ulf Wiik, Marketing Di- rectors for Gävle Port. PROxIMITY TO THE MARKET In addition to Gävle, both Oxelösund and Södertälje Norrköping/Linköping are geographically close to Ports are part of the Greater Stockholm harbor infra- Sweden’s logistics center and all-round transport infra- structure. All three are growing rapidly. All three can structure. Proximity to Europe’s foremost growth mar- accommodate more railroad goods. Railroad and combi kets east of the Baltic Sea and leading academic logistic options are however a problem for Stockholm’s ports. education programs warrant a place in the top. The possibility, at least in the future of transporting Örebro is close to Sweden’s and the Nordic countries’ goods on the railroad, is an option increasingly more logistics center. The Örebro region includes Hallsberg, product owners are demanding. with its rapidly growing combi terminal and Arboga This according to associate professor Nils G. Storha- which landed in tough competition with other locations gen who has extensive experience from logistics in the the Swedish Armed Force’s new central warehouse. construction industry. He recently concluded a project “But we also see ourselves as part of an even larger concerning the future logistics of the consumer goods region in the center of Middle Sweden. We are evolv- industry. ing into a cluster for logistics-related IT competence”, “It is evident that larger consumer good chains are look- says Göran Dahlén, Economic Development Officer in ing for more sustainable solutions”, says Nils G Storha- Arboga. gen. “But marketing capabilities are significant when it Västerås, home of the largest lake harbor with good comes to where the different companies finally end up.” transport infrastructure and two combi terminals, is 34 LOGISTICS THIS PAGE IS AN AD FROM INTELLIGENT LOGISTIK 1. Greater Göteborg 2. Norrköping/Linköping 3. Örebro/Hallsberg/Arboga 4. Stor-Stockholm (County + Enköping, Håbo, Nykvarn) 5. jönköping/Nässjö 6. västerås 7. Eskilstuna/Strängnäs 8. Öresundsregionen 9. Borås/Ulricehamn 10. Halmstad 11. Gävle/Sandviken 12. Nyköping/Oxelösund 13. Skaraborg region 14. Trollhättan/vänersborg/Uddevalla 15. Karlshamn/Karlskrona 16. växjö/Ljungby/älmhult 17. Falun/Borlänge/Insjön 18. Kristianstad/Åhus/Hässleholm 19. Karlstad 20. Sundsvall region 20 The six criteria We evaluate all the relevant circumstances that deter- mine where companies set up central warehouses/ logistics centers for consumer products, with distri- bution primarily in Sweden but also for the entire Nordic region. Our studies are based on open sourc- 11 17 es, interviews with the industry’s relevant player and statistics for new logistic establishments during the year and five years back in time. 19 The ranking is based on the following criteria 1. Geographic location, proximity to the demo- 12 graphic centers of Sweden and the Nordic region. 2. The volume of existing and planned logistics 13 14 operations. 3. Full-service and access in logistics infrastructure (roads, railroads, harbors, freight airports and combi terminals). 16 4. Range of logistic services, relevant academic education and access to labor force. 5. Degree of established cooperation and networks 15 18 in the region. 6. Price and access to land for new businesses. LOGOSTIK LOGISTICS 35 Photo: Karim Hatoum Photo: Thomas Fallander R 5 E TA IL RETAIL 37 BUSINESS ANALYSIS by Magnus Kroon, Swedish Trade Federation 5.1 STILL A STRONG RETAIL DEvELOPMENT IN THE REGION The retail sector continues to do well in the Göteborg the development of current projects and new, spectacu- region. Naturally, coupled with a steady increase in con- lar shopping malls. Allum is one such example. Notable sumer buying power, population growth plays an impor- is that the current market for retail trade in the region tant role here. The figures from the Swedish Retail In- between 1999 and 2007 has grown by over SEK 13 mil- stitute (HUI) indicate that growth for the retail sector lion. We do however see a certain weakening in terms in Sweden was 6.7% in 2007 and the figures for 2008 of new projects for volume retail in the region, which are promising. The forecasts HUI has prepared are op- may indicate that the retail sector is now in a period of timistic. HUI estimates that theretail sector as a whole consolidation. This is much needed and gives commerce grows by 5,5 % in current prices in 2008. Growth in in the region strength to continue to develop in a more everyday commodities is estimated at 6.0% and 5.5% for structured way. durable consumer goods. Measured in current prices, the retail sector will continue to grow at the same steady 5.3 GÖTEBORG’S CITY IS THE ENGINE FOR RETAIL rate observed over the past few years. However, a sub- Göteborg’s City should be, and according to many, is stantially larger share of the growth is attributed to price the engine for retail trade in the region. To maintain this increases in the food industry. Volume growth for the position, retail in the City must be allowed to grow and food industry in 2008 is expected to brake at 1.5%, the spectacular projects must be permitted. The conditions lowest since 1998. In the durable consumer goods sec- for enabling this have never been better! Two significant tor, volume growth continue to surpass sales increases in City areas are under development: Avenyn/Heden and current prices. As before, substantial price reductions in Södra Älvstranden. We hope that these two areas will the electronics sector is the reason. Wise from previous have an innovative design with a content that comple- years, the Göteborg region developed better than the ments the City as a whole. nation as a whole and the retail sector has now enjoyed In addition to these two areas, it is imperative to pro- uninterrupted growth since 1996, which is historic. mote the excellent growth rate of existing commercial In 2007, retail in the region employed about 25,000 areas in the City. Innerstaden and Nordstan are exam- people, making the retail sector a prominent employer in ples of areas that are regularly modernized to appeal to the region. consumers. Yet another key factor for trade is that the tourist in- In the long term, a second challenge lies in better de- dustry is doing well. Robust year-round tourism for both fining and enhancing the shopping streets. The area sur- business travels and private tourists gives retail an added rounding Götaplatsen and the expansive area around boost. Thorough and well-executed activities aimed at Svenska Mässan needs to be connected to Östra Hamn- positioning Göteborg as a year-round events city and a gatan and the waterfront. The thoroughfare should be sound and innovative retail sector pays off! planned to accommodate the stores. The actual routes are actually short, both in terms of time and distance, 5.2 ExPANSION OF ExISTING COMMERCE but the mental distance for residents or tourists is cur- It is worth noting that initiatives to expand existing rently too far. If we manage to bring things into the city trade locations have seriously taken off the past year. and create a natural flow, Göteborg will be able to offer The vitalization of Frölunda Torg has begun, as has the an impressive, top-rate shopping street which will gener- process of transforming Backplan. The retail trade out- ate positive effects for the entire region. side City has noticeably grown over the years through 38 RETAIL 5.4 GÖTEBORG REGION IS STILL HOT • A possible doubling of shopping space in Angereds It feels crucial to note that international investors are still Centrum in Göteborg is in the works. extremely interested in the Göteborg region. This applies • Considerable expansion of shopping space in Möln- both to shop concepts and investments in retail property. dals Centrum is planned in the form of a spectacu- Several projects are currently in the planning phase. The lar project. The city of Mölndal is collaborating with economic situation will obviously be significant to the Steen & Ström. timeframe for some of the investments listed below. • In Mölndal, Kållereds Centrum is trying to position itself as the region’s second Home Center after Bäck- 5.5 CURRENT RETAIL INvESTMENTS ebol. Hornback for instance is looking for space for IN THE GÖTEBORG REGION its second home improvement store in the Göteborg An additional 4,000 sq m will be added to the shopping region. mall Nordstan in Göteborg. • In Partille, KF Fastigheter wants to build a new shopping mall to complement Allum. The project is • Åhléns will open its second department store in the for the Daros land. autumn of 2008 in City on Kungsgatan. • The municipality has large-scale development plans • The city and property owners will invest a total of and is earmarking 40,000 sq m for new shopping ar- SEK 60 million to create more pedestrian streets in eas by 2012. the inner-city area. • In Kungälv, the Kongahälla land next to Ica Maxi is • Frölunda Torg in southern Göteborg is undergoing earmarked for development. Plans currently include a major transformation and renovation. The project an additional 16,000 sq m of shopping space. will be completed in three phases and is scheduled for completion in 2012, entailing the addition of • Alingsås is planning for an external shopping center 26,000 sq m to Frölunda Torg. in Bolltorp with 30,000 sq m for volume trade. In addition, we note that Affärshuset Storken will be • A new shopping area measuring 30,000 sq m is completed in October 2008, marking the addition of planned for Gamlestaden in SKF’s factory area in 27 new shops to Alingsås inner city area. Göteborg. Acquisition is possible earliest 2012. Montage, Avenyn Kv. Örbyhus new facing Montage: Thorbjörnsson+Edgren arkitektkontor AB RETAIL 39 PLAN DRAWING FOR AVENYN KV. ÖRBYHUS Entrance Section TURNOVER FOR THE REGION’S SHOPPING MALLS AND DEPARTMENT STORES Municipality Shopping mall/ Turnover, Turnover, Dept. store total retail total retail 2006 2007 Ale Ale Torg 392 400 Göteborg Angered C 322 325 Arkaden 280 350 Backaplan 1) 590 600 Bäckebol 2,215 2,300 Frölunda Torg 1,504 1,700 Hus 421 2) 260 1,200 Kompassen 268 260 NK 525 540 Nordstan 2,900 3,400 Kungsbacka Kungsmässan 1,245 1,350 Mölndal Kållered 2,100 2,200 Partille Allum 3) 1,150 1,500 Stenungsund StenungsTorg 444 510 TOTAL: 14,195 16,635 The figures are VAT inclusive but do not include figures from Systembolaget and Apoteket. Comments: 1) Turnover for Backaplan does not include turnover for Siba, HCJ Huset, Backa 1, Backa 3, TOYS”R”US. 2) Building in inner-city Göteborg. Fully leased. 3) The largest deal made outside Stockholm for an individual office building. 6 40 CONCLUSION S IO N O N C LU C Photo: Karim Hatoum CONCLUSION 41 This report has been prepared by Business Region Göteborg… vISION The vision for Göteborg Region is to be a leading center to business development and competitiveness. Business for competence, tomorrow’s industries and growth en- Region Göteborg promotes a good business climate terprises in Northern Europe. through constant improvements in infrastructure, edu- cation, the environment, housing and service, etc. The BACKGROUND company works for tomorrow’s trade and industry, The commercial and industrial Secretariat was formed in which is to say all industries and companies that contrib- 1977 as a unit that reported directly to the Göteborg Municipality Board. The Göteborg region’s 13 munici- TRIPLE HELIx MODEL palities have since 1992 created a unique collaboration that promotes development and growth in the Göteborg region. As a result of this collaboration, The commercial and industrial Secretariat became a corporation on Janu- Co ll e e s ary 1, 2000 and was named Business Region Göteborg m s co iti in d m e r ge d er s AB. u s c ia a n ni v tri l a al The company has 76 employees who work for and with life nd U the companies in the Göteborg region. The Board is BRG comprised of political representatives and reflects the fi- nancial initiatives of the municipalities. All of the eco- Public nomic development officers in the 13 municipalities are organizations members of Business Region Göteborg. Strong coop- eration in the Göteborg region is one prerequisite for growth. The platform for our efforts is a close-knit in- Business Region Göteborg applies the tested, three-headed Triple Helix model to stimulate teraction with the Göteborg region as our common la- innovation and development in the region. bor market and economy. ute or will contribute to future growth in the region. BUSINESS CONCEPT GOALS AND INDICATORS Business Region Göteborg is a neutral partner that con- Business Region Göteborg’s overall goals are that the tributes to the development of businesses, new invest- labor market region will include 1.5 million people in ments and new companies, as well as a sound business 2020, to contribute to sustainable economic growth, a climate for tomorrow’s trade and industry in the Göte- high level of employment and a diversified economy. Be- borg region. Business Region Göteborg is a nonprofit, tween 2007 and 2010, Business Region Göteborg will independent organization. Distinguished by its entre- contribute to making annual growth in the region high- preneurial spirit, the company’s efforts will contribute er than for the country as a whole (growth measured in 42 CONCLUSION …in collaboration with jones Lang LaSalle. jONES LANG LASALLE Jones Lang LaSalle is a real estate services firm with than 150 experts and a network of Nordic consultants in more than 170 offices and operations in more than 700 all areas of the real estate sector. The company has one cities in some 50 countries around the world. Jones Lang of Europe’s most comprehensive real estate and rental LaSalle provides owners, tenants and investors with real property databases to provide employees on every local estate and investment counseling on local, regional and market access to relevant market information. In Swe- global levels. The company’s turnover is about USD 2.7 den, the analysis department regularly maps the domes- billion and a global portfolio of over 110 million sq m. tic real estate market and compiles financial and prop- LaSalle Investment Management, the company’s invest- erty-related data used to identify profitable investment ment operations, is a real estate manager with about objects. USD 49.7 million in managed assets. If you have questions about Jones Lang LaSalle and In 2008, Forbes magazine ranked Jones Lang LaSalle our services, please call +46 (0)8 453 50 00 or visit www. as one of the 400 Best Big Companies for the third con- joneslanglasalle.se. secutive year. Please direct questions about the report to Pär Abra- In the Nordic countries, Jones Lang LaSalle has more hamsson, +46 (0)31 708 53 61. CONCLUSION 43 Business Region Göteborg would like to thank the following companies/partners who facilitate activities when marketing the Göteborg region as a place to establish businesses and invest in at investor fairs like MIPIM and ExpoReal: Alaska Fastigheter AB Higabgruppen Aspelin Ramm NCC Castellum Skanska Eklandia Fastighets AB vasakronan Harry Sjögren AB vinge Chalmersfastigheter Wallenstam Diligentia Wistrand Förvaltnings AB Framtiden älvstranden Utveckling Business Region Göteborg welcomes the region’s new establishments and expansions of the following companies: Cochlear Parex Bank Cosentino Power Pipe DnB NOR Prologis Dormy Golf Taktica Frode Laursen v-TAB Hornbach zara Group Intersport Weigl Group AG Kuhne Nagel MediaMarkt Business Region Göteborg AB Ale Municipality Kungsbacka Municipality Lilla Edet Municipality Stenungsund Municipality Box 11119 Jerry brattåsen michael Fransson Kjell hermansson anette oscarsson Tel +46 (0) 303-33 02 77 Tel: +46 (0) 300 83 40 50 Tel +46 (0) 520 65 95 40 Tel +46 (0) 303 68 301 404 23 Göteborg firstname.lastname@example.org email@example.com firstname.lastname@example.org email@example.com Besöksadress: Norra Hamngatan 14 Alingsås Municipality Kungälv Municipality Mölndal Municipality Tjörn Municipality firstname.lastname@example.org Lennart anderberg anette Svahn Lars Ekberg berndt Grönlund Tel +46 (0) 322 61 69 01 Tel: +46 (0) 303 23 90 88 Tel +46 (0) 31 315 13 11 Tel +46 (0) 304 60 14 90 email@example.com firstname.lastname@example.org email@example.com firstname.lastname@example.org Business Region Göteborg Roger Strömberg, petra Sedelius Härryda Municipality Lerum Municipality Partille Municipality Öckerö Municipality Tel: +46 (0)31 61 24 12, +46 (0)31 61 24 22 helene Evensen hans parck Nina orback-Schultz bo michelson email@example.com Tel +46 (0) 31 724 63 06 Tel +46 (0) 302 52 16 16 Tel +46 (0) 31 792 11 35 Tel +46 (0) 31 97 63 63 firstname.lastname@example.org email@example.com firstname.lastname@example.org email@example.com firstname.lastname@example.org www.dragster.se 44 OFFICE SPACE business Region Göteborg ab visiting address: Business Region Göteborg AB box 111 19 Norra hamngatan 14, 1 tr works to strengthen and develop 404 23 Göteborg Tel +46 (0) 31 61 24 02 trade and industry in the Göteborg www.businessregiongoteborg.com Fax +46 (0) 31 61 24 01 region. We are a nonprofit orga- email@example.com nization representing 13 member municipalities. our goals are to contribute to sustainable economic growth, a high level of employment and a diversified economy.
Pages to are hidden for
"in COnnECTiOn WiTH BUSinESS ESTABliSHmEnT in THE GöTEBORG REGiOn"Please download to view full document