stockholm gothenburg copenhagen helsinki oslo...

Economies: All Nordic countries are expected to grow more quickly in 2014 than in 2013, albeit at modest rates.

Office markets: Prime CBD office rents have generally been high in the main Nordic cities and the forecast is for them to remain stable or increase in the short term, assisted by a restricted office development pipeline.

Investment markets: In 2013, the transaction volume for the Nordics has been similar to that of 2012, with prime office yields across the main markets consistently low and stable.

STOCKHOLMGOTHENBURG COPENHAGENHELSINKIOSLO MALMÖ

Nordic City Report Spring 2014

Nordic Office Markets – February 2014

2 On Point • Nordic City Report • Spring 2014

DefinitionsCBD Central Business District.Prime rent Represents the top open-market annual rent per sq m that can be expected for a notional office unit of the

highest quality and specification in the best location in a market. All prime rents are effective, representing face rent. The rent quoted normally reflects prime units of over 500 sq m in size.

Prime yield Represents the best (i.e. mid point) yield estimated to be achievable for a notional office property of the highest quality and specification in the best location in a market.

Net-absorption Net absorption represents the change in the occupied stock within a market.Cross-border Cross-border describes investment flows from or into a country, including cross-border – cross-border

transactions.Vacancy rate Vacancy rate represents finished floor space offered on the open market for leasing within three months.Take-up Take-up represents floor space acquired within a market for occupation during the survey period

(normally three months).Grade A property Real estate for which the rental level is above average for the submarket in question (e.g. CBD and near

suburbs).Grade B property Real estate for which the rental level is average for the submarket in question.Grade C property Real estate for which the rental level is lower than the average for the submarket in question.

Executive Summary ..................................................................................................... 3 Stockholm Office Market ............................................................................................. 4 Gothenburg Office Market ........................................................................................... 6 Malmö/Lund Office Market .......................................................................................... 8 Oslo Office Market ..................................................................................................... 10 Copenhagen Office Market ........................................................................................ 12 Helsinki Office Market ................................................................................................ 14 Hotel deals on the upswing ........................................................................................ 16 Transaction Data ........................................................................................................ 18 About Jones Lang LaSalle ......................................................................................... 19

Economic Key Data Sweden Norway Denmark Finland EUGDP growth 2013 (%, change p.a.) 0.1 1.8 0.0 -1.2 -0.1GDP growth 2014(F) (%, change p.a.) 1.2 2.1 1.3 0.8 1.2Inflation 2013 (%, change p.a.) 0.0 2.1 0.8 1.5 1.8Inflation 2014(F) (%, change p.a.) 0.5 2.0 1.3 1.5 1.4Employment growth 2013 (%, change p.a.) 1.0 1.4 0.1 -1.1 -0.3Employment growth 2014(F) (%, change p.a.) 0.7 0.9 0.1 -0.3 -0.3Unemployment rate (%, seasonally adj.) 7.5 3.5 5.8 8.2 11.0Exchange rates (SEK/NOK/DKK per €)* 8.8 8.4 7.5 - -Typical lease length (years) 3-5 3-10 5-7 3-5 -Property tax (%) 0.5-1.0 0-0.7 1.6-3.4 0.6-1.35 -Capital gains tax (%) 30.0 27.0 25.0 20.0 -VAT (%) 25.0 25.0 25.0 24.0 -Stamp duty (%) 4.25 2.5 0.6 4.0/2.0 -Corporation tax rate (%) 22.0 25.0 25.0 20.0 -

Contents

Source: European Central Bank, European Commission, Eurostat, IHS Global Insight, Ministry of Finance, National Statistics*Exchange rates from 2014-01-22

On Point • Nordic City Report • Spring 2014 3

Executive Summary

Note: Corporate deals and transactions < €4 million not included Residential and land not included

Source: Jones Lang LaSalle


Nordics: Direct Property Investment Volumes

Note: Short-term rental cycle

Amsterdam, HelsinkiCologne

Rental Growth Slowing

Rental Growth Accelerating

RentsFalling

RentsBottoming out

St. PetersburgOslo, Stockholm, Stuttgart

Dusseldorf, Frankfurt, Hamburg, Munich

Berlin, Moscow, Gothenburg

London City, London West End

Edinburgh, Manchester

Luxembourg

Istanbul

Dublin

Geneva, Zurich

Warsaw

Milan, Paris CBDAthens, Lisbon, Rome

Budapest, PragueBarcelona, Bucharest, Brussels, Copenhagen, Kiev, Lyon, Madrid, Malmö

Source: Jones Lang LaSalle IP

* Based on local currency

*Non Euro currencies converted to the average rates for the quarter, ECB. Note: Residential and corporate deals not included.

Dire

ct P

rope

rty In

vest

men

t Vol

umes

H2

2013

€ Million

0

1000

2000

3000

4000

5000

6000

Cross-borderDomestic

DenmarkFinlandNorwaySweden

-8

-6

-4

-2

0

2

4

6

8

10

12

Paris

Barc

elon

a

War

saw

Cop

enha

gen

Buda

pest

Lisb

on

Stoc

khol

mR

ome

Osl

o

Mos

cow

Mal

mö

Mad

rid

Brus

sels

Berli

n

Hel

sink

i

Fran

kfur

t/M

Got

henb

urg

Edin

burg

hLo

ndon

Cha

nge

in p

rime

rent

Q4

2012

- Q

4 20

13*

%

Osl

oPa

ris

Got

henb

urg

Stoc

khol

mBe

rlin

Hel

sink

i

War

saw

Mos

cow

Lond

on

Fran

kfur

t

Cop

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Buda

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Edin

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hM

alm

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Barc

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2013 can be summarized as a relatively stable year for the Nordic markets. Slowly but surely, underlying economic factors have been stabilizing, while office markets have performed solidly throughout the year. We have also noted considerable restraint with regard to speculative new office construction, which has prevented an increase in vacancies and a decline in rental levels.

At year-end, Stockholm reported record low vacancy rates in most submarkets. At the same time, a record low volume of new office space has been completed, less than 50,000 sq m. Volumes of new office space scheduled for completion in 2014 will be significantly higher at 166,700 sq m, but only 18 percent of this remains unlet. A limited supply in combination with increasing demand is likely to lead to rising rents in 2014.

In Gothenburg, demand for modern office space in combination with limited supply has led to record high rents. At year-end 2013, Jones Lang LaSalle reported a prime rent of SEK 2,600 / sq m p.a., a level never before achieved in Sweden’s second largest city. A lack of speculative construction in Malmö has resulted in a stabilization of vacancy rates, which in time may also lead to rental growth. Like last year, the rental market in Oslo has been strong, with high demand, low vacancy rates and limited new construction. Only 60,000 sq m of new office space is scheduled for completion in 2014 and rents are expected to increase in the range of 5 to 10 percent in the coming years. The office market in Copenhagen has been characterized by continuing weak demand. This has led to limited new development, a slight increase in vacancies and a downward adjustment in rents. During 2013, vacancies have also increased in Helsinki, especially in older properties, although despite the increase, rents in the CBD have risen slightly.

The transaction markets in the Nordics have reported transaction volumes for 2013 at approximately the same levels as in 2012. However, the fourth quarter has been relatively weak in all the Nordic countries with the exception of Finland, where Q4 results have been the strongest since 2008. We have also noted yield compression in the Stockholm CBD, while yields have been stable in the other Nordic markets.

In this issue of the Nordic City Report, our focus article concerns the hotel market, where the transaction volume in 2013 increased by 17 percent in EMEA. 50 percent of this was in the UK and France. The Nordic countries have accounted for only 5 percent of the transaction volume involving hotel transactions, 61 percent of which has been in Sweden. Hotel operators have remained key buyers.

Europe: Rental Growth Rates

Europe: Office Property Clock Q4 2013 The Jones Lang LaSalle Property ClocksSM


E18

E4

E20

AdjacentSuburbs

Solna/Sundbyberg

Kista

Rest of Inner City

CBD

Bromma

Frösunda

Alvik

Nacka

Marievik Globen

Solna Centrum

Nacka Strand

KTH

Sundbybergs Centrum University

E4Only a limited amount of speculative office space has entered the market during H2 2013. As a result, overall vacancy during the period has decreased to its lowest level since 2001. Demand has remained strong, with the highest activity in peripheral submarkets. Prime rental levels have remained stable across all submarkets. Investment volumes have decreased and inter-national capital continues to experience difficulties competing for the most attractive properties. Nevertheless, interest in Swedish real estate from an international perspective is still considered to be high, while prime yield has decreased to 4.25 percent in the CBD.

Supply – Lowest vacancy rate since 2001During H2 2013, the vacancy rate has decreased in all markets in the Stockholm region. The total vacancy rate in Stockholm has dropped by 0.4 percentage points and is currently estimated at 9.1 percent, which is the lowest recorded vacancy rate for the Stockholm office market since 2001. During H2 2013, the vacancy rate in the CBD has dropped by 0.3 percentage points to 3.6 percent. The Adjacent Suburbs submarket, where the vacancy rate has decreased by 2.3 percentage points from 15 to 12.7 percent, has recorded the largest drop, finishing at its lowest level since the beginning of 2009. The Solna/Sundbyberg submarket has remained at 8.4 percent, which is the same low level as in H1 2013. During H2, 34,500 sq m of new office space has been constructed, compared to 11,000 sq m in H1 2013. A limited amount of new supply has entered the Stock-holm office market for 2013 as a whole. Only 45,600 sq m has been constructed, compared to over 100,000 sq m in 2012. Of the office space completed during H2 2013, only 5,600 sq m was speculative on completion. During H1 2014, approximately 120,000 sq m is scheduled for completion, of which only 9 percent is speculative. Larger volumes of new office space will be completed in both 2014 and 2015, with a total of 270,000 sq m in the pipeline.

Demand – Take-up volumes decreasingDemand for office space has weakened during H2 2013. Total take-up in Stockholm has reached 117,000 sq m for the period, compared to total take-up of 215,000 sq m in H1 2013 and 163,000 sq m during the same period last year. For 2013 as a whole, total take-up has decreased by 60,000 sq m compared to 2012, finishing at 332,000 sq m. The most active submarkets during H2 2013 have been Kista and Adjacent Suburbs, which both registered take-up of 24,000 sq m each, followed by the CBD and Solna/Sundbyberg with take-up of 22,000 and 21,000 sq m respectively. The single largest decline has been recorded in Rest of Inner City, which dropped from 121,000 sq m

in H1 2013 to 17,000 sq m in H2. The single largest leasing trans-action was in the CBD when AMF Fastigheter let 4,900 sq m of office space in the Grävlingen 12 (CityCronan) property on Regeringsgatan to DNB.

Investment volumes – High investor demand puts pressure on office yields During H2 2013, the transaction volume in Stockholm has decreased substantially to SEK 14.6 billion, a decline of approximately 20 percent compared to the SEK 18.2 billion figure of H1 2013, and approxi-mately the same as the transaction volume in H2 2012 of SEK 18.7 billion. For 2013 as a whole, the decline has been 15 percent, with the Stockholm area recording a total transaction volume of SEK 33.4 billion compared to SEK 38 billon for 2012. Stockholm accounted for almost 40 percent of the total transaction volume in 2013, which is in line with 2012. The largest transaction during H2 2013 has been the sale by Allianz to AMF Fastigheter of Jericho 34, the mixed-use property mostly let to EY. The purchase price was approximately SEK 1.6 billion. Office transactions as a percentage of the total transaction volume have amounted to nearly 50 percent during H2 2013. During this period there have been seven cross- border transactions totalling SEK 4.6 billion, which has accounted for 30 percent of the total transaction volume in Stockholm. However, this is a decline of almost 50 percent compared to the previous half-year, as international investors are still experiencing difficulties competing for the most attractive properties. Nevertheless, interest in Swedish real estate from an international perspective is still considered to be high, especially in major urban areas such as Stockholm. All prime office yields in Stockholm have been adjusted downwards since the previous half year. The CBD has a prime yield of 4.25 percent, which represents a drop of 0.25 percentage points in the final quarter. Prime yield in Rest of Inner City has declined from 5.25 to 5 percent and in Adjacent Suburbs from 6.75 to 6.5 percent, while in Solna/Sund-

Stockholm Office Market


Office Properties CBD Rest of Adjacent Kista Solna/ Total* Q4 2013 Inner City Suburbs Sundbyberg

Office stock Q4 2013 (m2) 1,759,600 3,449,100 1,769,400 904,000 1,681,400 11,436,500Total Completions 2013 (m2) 10,600 29,000 - - 6,000 45,600Total Est. Completions 2014 (m2) 30,000 55,000 12,700 8,000 61,000 166,700Total Est. Completions 2015 (m2) 30,000 - - 38,000 34,000 102,000Vacancy rate (%) 3.6% 4.7% 12.7% 12.8% 8,4% 9,1%Short-term forecast ( ) -Prime rent (SEK/€/m2) 4,400 3,300 2,400 2,100 2,200 -Short-term forecast ( ) -Rent - Grade B properties (SEK/€/m2) 2,500-3,100 1,600-2,000 1,000-1,600 1,000-1,400 1,200-1,600 -Short-term forecast ( ) -Prime yield (%) 4.25 5.00 6.50 6.50 5,75 -Yield - Grade B properties (%) 6.00 - 6.50 6.75 - 7.25 7.25 - 7.75 7.75 - 8.50 7,25 - 7,75 -

byberg and Kista prime yield has decreased from 6.25 to 5.75 percent and 6.75 to 6.5 percent respectively.

Rents – Stable since 2012During H2 2013, prime rent in the CBD, which currently stands at SEK 4,400 per sq m p.a., and all Stockholm submarkets has remained stable since the minor fluctuations of H2 2012, when prime rent in the CBD finished at SEK 4,300 per sq m p.a. Prime rent in Adjacent Suburbs has also increased from SEK 2,250 per sq m p.a. in Q2 2012 to its current level of SEK 2,400 per sq m p.a. The property clock for the rental market is still set at slowing rental growth.

Market outlook – Minor increase in prime rent and stable yields Stockholm has benefitted from a relatively strong economy. Salaries have been rising faster than previously and the rate of new business formation has also been increasing. Stockholm’s population is growing at double the national rate, while the region’s unemployment rate has remained relatively stable and lower than the national average. Stockholm’s office market is characterized by very low supply (the vacancy rate in Stockholm has not been this low since 2001) as well as low new development, which has resulted in relatively low take-up levels. During H2 2013, average letting size has also decreased. Prime rents have remained stable throughout the year, although an increase is expected, albeit a weak one, by the end of 2014. The popularity of Stockholm’s prime office property can be evidenced in the decreasing yields for H2 2013. The CBD and Solna/Sundbyberg submarkets have recorded the largest drop in yields of 50 basis points, while prime yields in the other Stockholm office sub-markets have fallen by 25 basis points. During 2014, we are expecting a more stable outlook for prime office yields.

Vacancy Rate


Prime Rent

Inflation

Source: Jones Lang LaSalle, Eurostat

Prime Yield

Source: Jones Lang LaSalle* Also including submarkets not presented

Prime Rent / Vacancy Rate

Prime Yield / Inflation

3,500

4,000

5,000

6,000

5,500

4,500

20

15

10

5

0

2005

2006

2007

2008

2009

2010

2011

2013

2012

2014

(F)

CBD Prime Rent (LHS) Total Vacancy Rate (RHS)

SEK/sq m/p.a. %

0

1000

2000

3000

4000

5000

0

1000

2000

3000

4000

5000Vacancy rate

Prime rent

2005

2006

2007

2008

2009

2010

2011

2013

2012

2014

(F)

Prime Yield (LHS) Inflation (RHS)


5.0

7.0

7.5

6.5

8.0

8.5

6.0

5.5

4.5

%%

%%

-1

0

1

2

3

4

5

6

-1

0

1

2

3

4

5

6Inflation

Prime Yield20

02

2003

2004

2005

2006

2007

2008

2010

2009

2011

(F)

3.5

2.5

1.5

0.5

3.0

2.0

1.0

0

4.0

-0.5


The Gothenburg rental market has seen continuing high demand during H2 2013, and this has resulted in historically high prime rents and very low vacancy rates. As no speculative office space is currently under construction in the CBD, this trend is expected to continue for the time being. The investment market has been dominated by domestic capital as international investors are failing to outbid their Swedish competitors.

Supply – Rest of Inner City has dominatedThe overall vacancy rate has shown a minor increase to 6.4 percent during H2 2013, although this is still one of the lowest levels recorded in the last ten years. Continuing high demand, especially in the central submarkets of CBD and Rest of Inner City, has pushed the overall vacancy rate below 7 percent for the third consecutive half-year. The vacancy rate in the CBD has decreased by 0.5 percentage points since the last report and currently stands at 3.4 percent, its lowest level in over ten years. Meanwhile, very little new office space is currently under construction in the submarket, although Aberdeen is currently adding 400 sq m of pre-let space at Östra Hamngatan. The Rest of Inner City submarket has shown a stable vacancy rate of 3.6 percent in the last two reports. This is the submarket with the largest volume of office space currently under construction, 55,500 sq m, of which 29 percent is speculative. One example is Platzer’s newly launched Gårda Norra development project, which comprises 6,800 sq m of new office space. The two largest lease agreements of H2 have been signed at Gårda Norra with Försäkringskassan and GR, and all the available office space has already been let. Completion has been scheduled for autumn 2015. In addition, PEAB has begun construction work to add 15,200 sq m of office space at Lyckholms Fabriker by Q2 2015. PEAB, which will take up 4,200 sq m of the available space, is the only known tenant. Skanska is also due to complete its development of 14,000 sq m of office space in Q1 2014 in the same area, 85 percent of which had been pre-let at year-end. Both Alecta and Wallenstam will be developing property in the same area, near Mölndalsvägen, which will make Almedal the largest development area in Göteborg at the present time. Of the 76,500 sq m of office space currently under construction, 25 percent is speculative. The bulk of this speculative space is not scheduled for completion until 2015, thereby ensuring that the short-term vacancy rate forecast remains accurate.

Demand – Projects have dominated take-upDuring H2 2013, total take-up has totalled 53,500 sq m, which is a drop of 23 percentage points compared to H1, although it should be

noted that a record large volume was registered during H1. At sub-market level, the largest take-up volume, 19,800 sq m or 37 percent of the total, has been recorded in the Rest of Inner City submarket. A substantial proportion of this volume was the result of the two leases at Platzer’s Gårda Norra mentioned above, in other words the 7,300 sq m taken up by Försäkringskassan and the 3,200 sq m taken up by GR. The second largest take-up volume has been recorded in the CBD with 25 percent of the total, or 13,300 sq m. The two largest transactions in this submarket have been the lease by Danske Bank of 2,500 sq m in the Wallenstam property on Östra Hamngatan 45 and the lease by Bassoe Technology of 2,300 sq m in the Aberdeen-owned property Nordstaden 17:8, which is also located on Östra Hamngatan. As the supply of larger floor plates has been scarce in central locations, office developments have continued to account for the bulk of the larger leases. In addition, an increasing number of tenants are realizing the potential benefits of space efficiency and work space solutions. During H2 2013, 41 percent of the total take-up was in office developments.

Rents – CBD rents are still moving upwardsDuring H2 2013, prime rent in the CBD has increased by SEK 100 to a new record high of SEK 2,600 sq m p.a., while prime rental levels have remained stable in other submarkets. The increase in the CBD was expected, as leases above prime rent level had been registered during the year. In addition, the vacancy rate has been exceptionally low for the past few years in this submarket. The Rest of Inner City submarket is also experiencing high demand, but as the supply pipe-line is substantially larger, prime rent is expected to remain quite stable.

Investment market – No international buyersThe total transaction volume during H2 2013 has been SEK 2.1 billion, a decrease of 24 percent compared to H1. The Gothenburg market accounted for 5 percent of the total Swedish volume during H2. Office

Gothenburg Office Market

Gullbergsvass

Eastern Gothenburg

20 km

CBD

Rest of Inner City

Mölndal

Norra Älvstranden

Hisingen

WesternGothenburg

E6

Gårda

LindholmenScience park Kålltorp

Chalmers University of Technology

E20

SahlgrenskaUniversity

Hospital

GothenburgBusiness School


Office Market Data CBD Rest of Norra Rest of Mölndal Western Eastern Total Q4 2013 Inner City Älvstranden Hisingen Gothenburg Gothenburg

Office stock Q4 2013 (m2) 871,500 743,500 258,300 424,000 361,000 325,000 246,600 3,229,900Total Completions 2013 (m2) 11,000 2,500 9,300 - - - - 22,800Total Est. Completions 2014 (m2) 400 14,000 - - 12,000 - - 26,400Total Est. Completions 2015 (m2) - 41,500 8,600 - - - - 50,100Vacancy rate (%) 3.4% 3.6% 7.3% 10.7% 7.7% 15.5% 11.9% 6.4%Short-term forecast ( ) -Prime rent (SEK/€/m2) 2,600 2,050 2,100 1,000 1,500 1,150 1,100 -Short-term forecast ( ) -Rent - Grade B properties (SEK/€/m2) 1,800 - 2,600 1,500 - 2,000 1,400 - 2,000 700 - 1,000 1,000 - 1,500 800 - 1,100 800 - 1,100 -Short-term forecast ( ) -Prime yield (%) 5.00% 5.50% 6.00% 8.00% 6.50% 7.25% 7.25% -Yield - Grade B properties (%) 6.0-6.5% 6.5-7% 7.25-7.75% 9-9.5% 7-7.5% 8.25-8.75% 8.25-8.75% -

property has dominated the transactions at SEK 952 million, with a total of 6 out of 11 transactions or a 68 percent share of the total volume. The single largest transaction during the half has been Platzer’s acquisition of the 16,700 sq m Tennet property in the CBD from Skanska for SEK 630 million. The second largest transaction was Balder’s acquisition of Kanoldhuset at Bö 92:3 from Aberdeen Pan-Nordic Fund for SEK 190 million. Three of the transactions during H2 have been cross-border, which accounted for 21 percent of the total volume. It is also worth noting that all three of these trans-actions involved Swedish buyers. International capital has continued to show interest in the Gothenburg market, but has frequently been outbid by domestic investors. During H2 2013, prime yield in Norra Älvstranden and Mölndal has decreased by 25 points to 6 percent and 6.5 percent respectively. Yields have remained stable in the other submarkets.

Market outlook – Almost no development in the CBDThe Gothenburg market has seen a high level of activity during H2 2013, with record high take-up, increasing rental levels, continuing low vacancy rates and decreasing prime yields. In the rental market, the high demand is expected to continue going forward. Bearing in mind the small amount of speculative space due to enter the market in 2014, vacancy rates will most likely remain stable. Further increases in prime rent in the CBD are possible due to the current supply situation. In the investment market, domestic capital is expected to dominate in 2014 as international investors find it difficult to compete, especially with strong domestic institutions. Opportunistic capital, both domestic and international, may well continue to find interesting acquisitions. As demand and financing increase, the yield gap between prime and secondary product is expected to begin decreasing slightly during 2014.



InflationPrime Yield


Vacancy RatePrime Rent




2005

2006

2007

2008

2009

2010

2011

2013

2012

2014

(F)

1,750

2,250

2,750

2,500

2,000

15

10

5

0

SEK/sq m/p.a. %

0

500

1000

1500

2000

2500

3000

0

500

1000

1500

2000

2500

3000Vacancy rate

Prime rent

0,00

1,00

2,00

3,00

4,00

5,00

6,00

7,00

8,00

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008F

Prime Yield Inflation


2005

2006

2007

2008

2009

2010

2011

2013

2012

2014

(F)


2002

2003

2004

2005

2006

2007

2008

2010

2009

2011

(F)

5.0

7.0

6.5

8.5

8.0

9.0

7.5

6.0

5.5

4.5

%%

%%

-1

0

1

2

3

4

5

6

7

8

-1

0

1

2

3

4

5

6

7

8Inflation

Prime Yield

3.5

2.5

1.5

0.5

3.0

2.0

1.0

0

4.0

-0.5


The overall vacancy rate has increased in the Malmö/Lund market during H2 2013. However, as a limited amount of speculative space is scheduled to enter the market in the coming years, the vacancy rate is expected to stabilize. Rental levels have remained stable in all submarkets, while the residential segment has dominated the investment market.

Supply – Declining speculative developmentDuring H2 2013, the overall vacancy rate in Malmö/Lund has increased by 1.7 percentage points to 8.5 percent. The Malmö CBD has recorded a rise of 2.9 percentage points to 7.7 percent, its highest level since 2007. This rise is probably due to the increasing trend for modern and efficient office space. Other submarkets have seen larger new construction volumes in recent years and the CBD has lagged behind. During H2 2013, 10,600 sq m of new office space has entered the market, of which 30 percent was speculative on completion. This space has been divided between two developments, Vasakronan’s Triangeln in the CBD, totalling 4,600 sq m, and Mast-husen 11, the Diligentia development that has added 6,000 sq m of space to the Västra Hamnen submarket. A total of 42,000 sq m of office space is currently under construction in the Malmö/Lund market, of which 34 percent was speculative at year-end 2013. Only 6,500 sq m is scheduled for completion during 2014, all of which has been pre-let due to the fact that Skanska will be relocating to its own Klipporna development in Hyllie. During 2015, 35,500 sq m of new space is due to enter the market, divided into three developments. Skanska is currently constructing Malmö Live, a hotel, conference and office complex that includes 10,000 sq m of office space, and developing another 7,000 sq m of office space in phase 2 of Klipporna in Hyllie. The third ongoing construction project is Niagara, an 18,500 sq m development in the CBD for Malmö University.

Demand – Large leases have dominatedThe total take-up volume during H2 2013 has decreased by 9 percent to 33,800 sq m, of which as much as 20,800 sq m, or 62 percent, has been registered in the CBD. By far the largest lease during the period has been the take-up by Sweco, the technical consultancy, of 11,000 sq m in Skanska’s Österport 7 property in the CBD. After substantial renovation, Sweco will begin sharing the premises with its new acquisition Vectura in early 2015. The transaction is unusual because leases of this size are typically associated with office projects. Other notable leases have been Malmö Municipality IT, which has signed for 2,400 sq m in the Briggen-owned Betongen 11 property,

and the Siemens lease of 1,700 sq m in phase 2 of Skanska’s Klipporna development in Hyllie.

Rents – Stable across all submarketsRental levels in Malmö/Lund have remained stable in H2 2013, with a prime rent of SEK 2,100/sq m p.a. The substantial amount of speculative development in recent years has most likely contributed to the lack of rental growth in the market. Since the beginning of 2009, Jones Lang LaSalle has only made minor adjustments in prime rental levels.

Investment market – Dominated by residential propertyDuring H2 2013, the transaction volume has totalled SEK 2.2 billion, a decrease of 8 percent compared to H1 and 43 percent year-on-year. The Malmö/Lund market share of the total Swedish volume was 5 percent. Only two of the eleven transactions have been cross-border, but as both of the largest transactions have involved international capital, the cross-border share of the total volume is 64 percent. The largest transaction has been a residential portfolio in Brunkeflostrand in Malmö, which the SEB Domestica fund acquired from Norwegian OBOS Forretningsbygg for SEK 900 million. The yield level has been estimated at approximately 4.5 percent. The second largest transaction has been the purchase by Corpus Sireo, the German asset and investment management consultants, of the Kronan 10 & 11 office properties from NIAM for SEK 500 million. The two properties total 17,000 sq m of space and the yield has been estimated at 5.5 percent. With 60 percent of the volume, residential property is the property type that has dominated transactions, partly due to the portfolio purchase mentioned above. The second most active asset type has been office property, which accounted for 25 percent of the total volume as a result of the Corpus Sireo purchase. Prime yield levels have remained stable in all submarkets, with the CBD at 5.25 percent.

Malmö/Lund Office Market

25 km

E22

Gamla Staden

Bulltofta

Malmö Stadion

Rest of

RosengårdLimhamn

öllevången

Hamnen

Hyllie

Inre Ringvägen

Inner City

VästraHamnen

UniversitetsholmenCBD

M


Office Market Data CBD Rest of Lund Research Park Lund Other Total for Q4 2013 Inner City Inner City in Lund Malmö/Lund*

Office stock Q4 2013 (m2) 633,200 340,700 54,400 256,300 240,200 2,075,500Total Completions 2013 (m2) 9,600 - - 9,000 - 38,500Total Est. Completions 2014 (m2) - - - - - 6,500Total Est. Completions 2015 (m2) 28,500 - - - - 35,500Vacancy rate (%) 7.7% 4.2% 10.4% 12.0% 3.9% 8.5%Short-term forecast ( ) -Prime rent (SEK/€/m2) 2,000 1,350 1,700 1,900 1,600 -Short-term forecast ( ) -Rent - Grade B properties (SEK/€/m2) 1,600-1,900 1,100-1,300 1,400-1,700 1,600-1,900 1,300-1,600 -Short-term forecast ( ) -Prime yield (%) 5.25 6.75 6.5 6.5 7.25-7.75 -Yield - Grade B properties (%) 6.25-6.75 7.00-7.50 8.00-8.50 7.50-8.00 -





Source: Jones Lang LaSalle*Also including submarkets not presented


Prime Yield / InflationMarket outlook – Stability aheadDespite substantial speculative development during recent years, the market has managed to absorb the volumes well. Nevertheless, the vacancy rate in Malmö/Lund has increased during H2 2013 to its highest level since 2006 due to slower demand than expected. How ever, as no speculative office space is scheduled for completion during 2014, this should allow the market some time to stabilize. Hence the vacancy rate is not expected to increase a great deal going forward. In the investment market, domestic capital is likely to remain dominant in the core segment. However, as financing opportunities improve, the market for secondary product may well open up.

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1999 2000 2001 2002 2003 2004 2005 2006 2007 2008F

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Oslo Office Market

30 km

Rest of Inner City

Outer City West

Outer City East/ North/South

CBD

LysakerStabekk

Fornebu

Skøyen

ydalen

E18

E6

ygdøy

Holmenkollen

Oppsal

Tøyen

Ryen

Bryn

Helsfyr

Økern

N

BE18

The majority of commercial property segments in Oslo have performed well during Q4, both from a leasing and a transac-tion perspective. However, the outlook going forward is slightly more mixed due to reduced macroeconomic expectations.

Supply - Few larger premises vacantThe vacancy rate in the Oslo office market currently stands at 7 percent, or 570,000 sq m of vacant office space. Most vacant space can be found in smaller premises, as only thirteen premises larger than 5,000 sq m are currently unoccupied. During the next two years, approximately forty premises of this size will either become vacant or enter the market on a speculative basis. Grade A buildings in the CBD and close to public transportation are still attractive, while secondary properties in fringe locations have been experiencing a higher vacancy rate. During the next three years the vacancy rate is expected to decrease to 6.5 percent, while only 60,000 sq m of new office space will enter the market in 2014, compared to 147,000 sq m in 2013. However, in 2015 162,000 sq m is scheduled for completion, of which 30 percent is speculative.

Demand – Strong take-up Despite the somewhat lower growth projections for the Norwegian economy, there are few indications that this has been impacting the Oslo office market. Office take-up has remained strong through-out 2013 and preliminary figures suggest an absorption level of approximately 800,000 sq m (including renegotiations), an increase of 90,000 sq m compared to 2012. Demand for office space has remained robust in the CBD and ongoing refurbishment projects in the prime area are starting to fill. The western fringe has attracted several large tenants during 2013, of which the largest in 2013 has been Aker Solutions at Fornebu, totalling 26,000 sq m. Going for-ward, office demand is expected to remain strong, and currently there are more than three hundred registered tenants searching for approximately 780,000 sq m in the upcoming four years. Twenty of these companies are looking for space in excess of 10,000 sq m.

Rents – Submarkets outperformed prime in rental growthduring 2013During 2013, prime rents have grown by less than 5 percent, while other submarkets such as Kvadraturen, Lysaker, Fornebu and Helsfyr-Bryn have recorded growth of between 5 and 10 percent. On the other hand, prime rents have experienced incredible growth in the past few years, while most fringe areas have recorded moderate growth in the same period. During 2014, growth of

between 5 and 10 percent in the CBD and Nydalen is expected, with relatively stable rental levels for the remaining fringe areas. Known office supply for the upcoming years is low, current vacancy is low and employment growth is relatively good, which all indicate a solid rental market in the long term.

Investment Market – Healthy market but lower volumesPreliminary figures suggest that the transaction volume for 2013 will finish at nearly bNOK 40, although this represents a setback compared to 2012 when the volume reached bNOK 54. While the number of transactions has only decreased marginally, the top 10 transactions during 2013 accounted for only 30 percent of the total volume, compared to 50 percent 2012. Q4, which is traditionally very active, has been disappointing this year, with a volume of bNOK 10, well below the figure achieved in 2012. The market has been healthy, despite the relatively scarcity of major transactions, as the total number of properties sold has been high and the pro-portion of cash-flow properties to development-oriented properties has been more balanced than it was in 2012. Prime office yield has remained unchanged at 5.25 percent, but there has been a gradual improvement in debt financing during the year for stable property companies acquiring prime objects.

Market Outlook - Limited supply aheadAfter a weak H2 2013 with declining prices and sales down 20 to 40 percent, the residential market is now considered the most important variable for the upcoming year. Any impact on the commercial sector will be indirect, and it will only occur if prices continue to fall. The latest indications are that this is unlikely to happen and that construction activity will remain well above crisis levels. The Oslo market still has a large number of strong investors and a reasonable supply of leasing tenants, very few of which currently appear to be nervous about the future. However, the


Source: Jones Lang LaSalle, Akershus Eiendom AS, Eurostat


Source: Jones Lang LaSalle, Akershus Eiendom AS


limited supply of new space is hampering the downside of the market. Banks also consider the commercial property sector to be healthy, and there is reason to expect downtown Oslo rents to rise slightly and property values to remain at their current levels at least.



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1999 2000 2001 2002 2003 2004 200520062020 20072020 2008F200200

eldPrimme YnInfllationYin

% %

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Office Market Data CBD Rest of Outer City Outer City Total Q4 2013 Inner City West East/North/South

Office stock Q4 2013 (m2) 3,250,000 1,050,000 1,400,000 2,600,000 8,300,000Total Est. Completions 2014 (m2) 60,000Total Est. Completions 2015 (m2) 162,000Total Est. Completions 2016 (m2) 68,000Vacancy rate (%) 4 7 8 9 7Short-term forecast ( ) Prime rent (NOK/€/m2) 4,000 2,500 2,900 1,900 -Short-term forecast ( ) Rent - Grade B properties (NOK/€/m2) 2,500 1,600 1,450 1,300 .Short-term forecast ( ) -Prime yield (%) 5.25 5.5-6.0 5.5-6.0 5.75-6.25 -Yield - Grade B properties (%) 5.75-6.25 6.25-6.75 6.5-7.0 6.75-7.75 -

Source: Jones Lang LaSalle, Akershus Eiendom AS


Copenhagen Office Market

Greater Copenhagen

Frederiksberg Old CBD

North Harbour

Tuborg

New CBD(Waterfront)

Ørestad Kastrup

Glostrup

Skovlunde

Hellerup

Bronshoj

GladsaxeBallerup

Lyngby

South Harbour

The overall economic outlook in Copenhagen is more positive than it has been for a number of years. There have finally been a few indicators of stable, positive GDP growth, and expectations for 2014 are relatively positive. This positive economic outlook has resulted in an increase in investment volumes in Denmark and an encouraging atmosphere in the commercial real estate business overall.

Supply – Vacancy levels have stabilized During 2013, vacancy rates have been relatively stable both in the CBD and in Greater Copenhagen. In the CBD, the vacancy rate stood at 9.3 percent at the beginning of Q4, which represents an increase of 20 bps since the beginning of 2013. From the beginning of 2012 until year-end 2013, the CBD vacancy rate has remained stable in the 9 to 9.5 percent range. In Greater Copenhagen, the vacancy rate has fluctuated slightly more in the corresponding period, from 9.7 to 10.9 percent. At the beginning of Q4 2013, the vacancy rate in Greater Copenhagen stood at 10.5 percent, which was a drop of 40 bps compared to the previous quarter. Construction activity has been slow in recent years, but a number of major projects have recently been announced, many of which are outside the centre of Copenhagen, which suggests that it is picking up again. Maersk, the major shipping conglomerate, will be taking up 22,400 sq m of office space in 2015 in Lyngby, north of Copenhagen, and Microsoft is relocating all its Danish operations to a new 24,000 sq m office property in the same area. In Copenhagen, Nordea Bank has announced that it will be starting construction work on a new head office of approximately 50,000 sq m, which will house around 2,000 employees. The building is scheduled for completion in 2016. Demand – Demand still low while the market waits foremployment growthWhile there are positive indicators for the overall economic out-look, and the investment market has shown encouraging signs, the demand side of the market is still struggling. Danish corporations have been increasing their earnings primarily by cutting their costs, and this has led to a drop in the employment rate. Demand for space from occupiers in the Copenhagen office market has therefore been low and it will only begin increasing if employment figures do likewise. Nevertheless, the employment rate is expected to increase slightly during 2014, albeit slowly. Major leases in Copenhagen in H2 2013 have included the take-up by Microsoft of 24,000 sq m of office space in Lyngby, north of Copenhagen. The property has been planned as a purpose-built headquarters. In Frederiksberg, the

CBS business school has rented approximately 8,000 sq m at H.V. Nyholmsvej.

Rents – Low demand has led to a small drop in rentsOffice rental levels had dropped slightly by year-end 2013, and prime rents in Copenhagen currently stand at 1,750 per sq m p.a. Low demand has put pressure on rental levels, which has resulted in a small decline in certain locations. However, there has only been a minor correction. The expectation continues to be that rental levels will remain constant during 2014 before increasing again when economic growth has become more significant. Current demand is primarily for modern and space-efficient properties and it is this type of property that can drive prime rental levels. Prime rents in the CBD currently stand at DKK 1,350 to DKK 1,700 per sq m p.a., exclusive of taxes and operating costs, with top rents of DKK 1,750 per sq m p.a. Office rents in secondary CBD locations range between DKK 1,100 and DKK 1,250 per sq m p.a.

Investment Market – Prime properties still dominate, with some activity in the secondary marketThe office investment market is still dominated by Danish institutional investors looking for prime properties on long leases. However, there has also been a growing interest in secondary properties and it is expected that this market will grow during 2014. The largest trans-action during H2 2013 has been the sale for DKK 1,900m and 15-year lease-back of the DONG Energy office premises in Gentofte to the Danish pension fund ATP. Yield for prime office property in the CBD has remained stable at 5 percent and 5.75 percent in the secondary CBD segment. Yield for prime office property outside the CBD has stabilized at 5 percent, while the secondary segment outside the CBD currently stands at 7.5 percent.


Office Market Data Old CBD New CBD Rest of Ørestad Greater Q4 2013 (City) (Waterfront) Copenhagen Copenhagen*

Office stock Q4 2013 (m2) 5,730,000 190,000 11,795,000Total Completions 2013 (m2) 0 80,000 25,000 0 140,000Total Est. Completions 2014 (m2) 20,000 70,000 30,000 50,000 230,000Total Est. Completions 2015 (m2) 10,000 50,000 30,000 70,000 26,000Vacancy rate (%) 9.30% 9.90%Short-term forecast ( ) Prime rent (DKK/€/m2) 1,350 - 1,700 1,750 1,000 - 1,650 1,300Short-term forecast ( ) Rent - Grade B properties (DKK/€/m2) 1,050 - 1,200 1,250 600 - 1,050 900Short-term forecast ( ) Prime yield (%) 5.00% 5.00% 5.00% 5.00%Yield - Grade B properties (%) 5.75% - 6.50% 5.50% - 6.00% 7.25% - 8.75% 6.00% - 6.50%

Source: Jones Lang LaSalle, Sadolin & Albæk A/S, Eurostat


Source: Jones Lang LaSalle, Sadolin & Albæk A/S


Source: Jones Lang LaSalle, Sadolin & Albæk A/S

Market Outlook – Growth in activity is expected to continue during 2014The investment market has seen a certain degree of growth during 2013 and this is expected to continue in parallel with improved over-all economic conditions. Before the office investment market can recover fully, some positive growth is needed on the demand side, and this is currently the missing link. Demand is expected to pick up during 2014, which will lead to increasing investment activity. Currently, there is more focus from investors on residential and retail investments. Residential investments have been driven by a very positive demographic outlook for Copenhagen, and if current forecasts are correct, this will also have a positive impact on employment and consequently on the office sector.



5.5

7.5

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F)

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*Also including submarkets not presented


Helsinki Office Market

Rest of Helsinki

Vantaa

Espoo

CBD

Malmi

Tapiola

ItäkeskusLeppävaara

Ruoholahti

Pitäjänmäki

Keilaniemi

Herttoniemi

Aviapolis

Pasila

The sluggish trend in the Finnish economy has continued into H2 2013, but forecasts for 2014 indicate that the economy will start growing again slowly. There have also been a few early recovery indicators in the investment market, as Helsinki reflected the trend in the main European markets during Q4 2013 and recorded its highest investment volume since Q1 2008. However, the vacancy rate in the Helsinki office market has continued to rise gradually, while the Helsinki CBD has witnessed slight rental growth in the prime segment.

Supply – Vacancy still increasing except in the Helsinki CBD The vacancy rate has continued to increase slightly in H2 2013. In the Helsinki CBD, a slight decrease in vacancies has been recorded, but otherwise, particularly in B/C stock in Espoo and Vantaa, vacancies are still increasing. The development pipeline has also continued to shrink rapidly and planned projects have been post-poned. Never theless, a few new projects have reached the market, although nobody is launching speculative construction projects. The amount of new space entering the market is expected to decline from approximately 95,000 sq m in 2013 to approximately 70,000 sq m in 2014 and then to around 50,000 sq m in 2015, while the vacancy rate is expected to continue increasing slightly in the short term. At the same time, a small proportion of old stock will be demolished or converted, typically for residential use.

Demand – The CBD is performing best Demand in the Helsinki CBD has remained relatively strong despite several large occupiers relocating to the Töölönlahti area. However, this demand has mostly been focused on grade A premises, which has led to owners launching several refurbishment projects. With the employment rate decreasing and minimal growth in the economy, expansionary take-up is currently almost non-existent. The difficulties of letting out new developments at office hubs outside the CBD have also been evident and the competition for tenants is tightening, particularly in areas with large existing modern office stock such as Aviapolis and Leppävaara. As a result, the amount of vacant modern space has started increasing, which has created new opportunities for tenants looking for cost-effective but modern solutions.

Rents – Prime rents increase slightly after two years of stagnation A slight increase in prime rents in the Helsinki CBD has been recorded in Q4 2013. Prime rents have risen to €306 per sq m p.a. compared to the stagnant level of €300 per sq m p.a. of the pre-

vious two years. Record-high rental levels in new developments in Töölönlahti and refurbishment projects in the CBD have pushed up asking rents in the CBD. In other areas, both asking rents and head-line rents have remained stable. However, with its high demand the CBD as a whole stands apart from the rest of the Helsinki metropolitan area, where rental levels are seeing some downward pressure in the short term.

Investment Market – Transaction activity increased in Q4 High transaction activity has been recorded in Q4 2013, bringing 2013 up to a normal full-year volume despite a slow Q1-Q3. The office transaction volume in the Helsinki metropolitan area during Q4 finished at approximately €380 million, which is the highest quarterly figure recorded since Q1 2008. Transaction stock has consisted of several modern office buildings in the main office hubs outside the CBD and several older buildings in established office areas such as Vallila and Pasila. Activity on the buy-side has been dominated by local institutions and Nordic funds, and on the sell-side by developers and sale & leaseback driven owner-occupiers. Investment demand has still been strongest for prime properties, but the lack of supply is diverting this interest to good quality buildings in secondary office areas. Prime yield has remained stable in the CBD at 5.2 percent and is expected to remain at this level in 2014.

Market Outlook – Slow recovery in both the economy and the office marketIn parallel with the expected recovery in the global economy, the export-driven Finnish economy has been forecast to return to a growth track in 2014. However, only moderate growth is expect-ed, and the positive impact on the office market is anticipated to remain limited as a result. Even if the number of office occupiers has started to increase, companies are looking to use space more efficiently, and expansionary take-up is expected to remain low.


Office Market Data CBD Rest of Espoo Vantaa Total Q4 2013 Helsinki

Office stock Q4 2013 (m2) 1,070,000 4,800,000 1,800,000 910,000 8,580,000Total Completions 2013 (m2) 0 30,000 25,000 40,000 95,000Total Est. Completions 2014 (m2) 0 35,000 20,000 15,000 70,000Total Est. Completions 2015 (m2) 0 25,000 15,000 10,000 50,000Vacancy rate (%) 6.0 % 10.6 % 15.8 % 10.4 % 11.1 %Short-term forecast ( ) Prime rent (SEK/€/m2) 306 228 204 204 -Short-term forecast ( ) -Rent - Grade B properties (SEK/€/m2) 186-210 78-114 72-108 72-108 -Short-term forecast ( ) -Prime yield (%) 5.20 6.00 6.50 6.75 -Yield - Grade B properties (%) 7.0-7.5 8.0-8.5 8.5-9.0 8.5-9.0 -





Although development has been decelerating, the vacancy rate is expected to continue increasing, with rental levels outside the CBD under downward pressure. With its limited supply will remain the strongest submarket but the possibility of rental growth is limited in the short term as well. Investment demand for core assets remains strong, as equity rich investors continue to look for safe havens, but there are also signs that investors are starting to diversify their portfolios, both in terms of risk and geography, and are looking for more value-added and secondary opportunities. However, stronger economic fundamentals are needed before more robust growth can be expected.




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Hotel deals on the upswing

We also expect to see a rising appetite among institutional inves-tors for making considerable investments in the debt market, which should facilitate transaction financing. Core markets such as the UK, France and Germany will provide good opportunities for investors in 2014 since the maturity of these markets, as well as their familiarity, will drive more value.

In 2014, private equity investors will continue not only as buyers, but also as sellers. Where fund life cycles are coming to an end, private equity players will need to make strategic decisions regarding when to exit their existing funds and focus on reinvesting in the sector.

Countries with a large number of distressed assets such as Spain and Ireland will also offer good investment opportunities, and investors will be eager to move on well-positioned assets in these markets. In CEE we have seen the re-emergence of the hotel investment market in 2013 after years of slow activity and we would expect this trend to continue.

Sovereign Wealth Funds and High Net Worth Individuals (HWNI) will continue to hunt for trophy assets across Europe as they did in 2013. With a preference for single-asset transactions, these investors are keen to acquire hotels in prime locations such as London, Paris and Munich, which have strong trading fundamentals and where capital can be secured in the long term.

Hotel operators that continue to pursue asset-light strategies will remain the primary sellers during 2014, along with owners of franchise hotel groups, some of which have retained assets for 20 to 30 years and are now looking to exit the sector.

Europe is attracting cross-border investment As US real estate becomes more expensive – with hotel values not far below their previous peak – US-based private equity funds and other investors are turning their gaze towards Europe, with a prima-ry focus on core markets and institutional or opportunistic assets. Investors from Asia are also keen to tap into this region, as the European hotel real estate market is offering some very attractive returns.

0

5

10

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F

15

20

25

Single Asset Sales Portfolio Sales

EMEA hotel transaction volumes 1998-2014F

2013 has been a resurgent year for the hotel investment market in Europe, the Middle East and Africa (EMEA), with transaction volume reaching €10.9 billion. Although economic recovery in Europe has remained sluggish, overall investor confidence has improved.

Source: Jones Lang LaSalle Hotels & Hospitality Group

The UK and France have together accounted for more than half of the EMEA transactions during 2013. The UK has been the most liquid market, gaining a 34 percent share of investment volume at €3.7 billion. France has secured the second highest share of total EMEA transaction volumes at 19 percent or €2.1 billion, led by the sale of a number of trophy assets and several notable portfolio trans actions – including Groupe du Louvre and Club Med.

More opportunities in 2014Despite the continued economic challenges across Europe, we expect hotel investment volumes in EMEA to reach approximately €12 billion in 2014. This increase will be bolstered by the continuing sell-down of over-leveraged assets in the control of lenders, as well as a number of private equity funds that are due to reach the end of their life cycle. We are also expecting brands to continue their asset light / asset right strategy, which may lead to more asset disposals that benefit from strong investor sentiment.

Improved trading fundamentals will further underpin 2014 trans-action volumes, with most markets continuing to show trading growth or stability after a period of decline. Although some markets are at varying stages of the recovery curve, the underlying sentiment is far more positive, which has led to renewed interest in hotel investment. There may also be several seasonal downturns due to the absence of trade fairs and sporting events. Nevertheless, we are anticipating stronger growth in rebounding peripheral markets.


Investment volumes double in the NordicsAt €462 million, hotel transactions in the Nordic countries have accounted for just 5 percent of all EMEA transaction volumes in 2013, though this was a 55 percent rise compared to the previous year. The majority of the transactions took place in Sweden, which accounted for 61 percent of the total, followed by Denmark (37 percent) and Norway (1 percent). No hotel transactions have been recorded in Iceland and Finland in the last two years. Historically a domestically- driven investment market, the majority of investments have remained within the Nordics, although there has been recent interest from US-based investors keen to find opportunities on European soil.

Hotel operators remain key buyersHotel operators have been the key investors during 2013 with 57 percent of total transaction volumes, followed by REITs at 22 percent and developers/property companies with a 13 percent share. There has only been one portfolio transaction, the sale of Hotel Skt. Petri and First Hotel Vesterbro in Copenhagen by First Hotels to Choice Hotels Scandinavia for €147 million, while the remainder were all single-asset transactions. Several of the more noteworthy trans-actions have included the sale of First Hotel Amaranten in Stockholm by AB Hotels to Sweden’s Home Capital AS for €114 million, and the sale of the Radisson Blu Lindholmen Hotel in Gothenburg by Skanska AB to Fastighets AB Balder for €48 million and the sale of the Sheraton Hotel by the Blackstone Group to Host Hotels & Resorts.

Source: Jones Lang LaSalle Hotels & Hospitality Group

Stockholm continues to attract investor appetiteThe Swedish economy has rebounded quickly after the economic crisis in 2009, and robust trading conditions in Stockholm have resulted in a rising appetite for hotel assets in the capital. The hotel investment market has been dominated by domestic investors, with only a limited number of foreign acquisitions taking place in recent years. Publicly reported transaction activity in Sweden totalled €283 million during 2013, over 80 pecent of which was Stockholm. This represents significant growth compared to the previous year, when only €98 million changed hands. Domestic demand drives visitor numbers to the capital and accounts for approximately 70 percent of the visitor total, which has increased RevPAR by €2 during 2013 to €86. The proportion of foreign visitors has de-creased slightly due to the strong SEK. According to STR Global, the Stockholm hotel market currently amounts to about 19,000 hotel rooms and it is estimated that the market will see supply growth of approximately15 percent in the next few years.

Source: STR Global & Stockholm Tourist BoardData from STR Global concerns November YTD 2013 – Data from Stockholm Tourist Board concerns October YTD 2013

57%

22%

13%

4% 3% 1%

Hotel / SA Operator

REIT

Developer / Property Company

Investment Fund / Private Equity

Unknown

Bank / Institutional investor

HNWI

Other

Hotel buyer categories London Amsterdam Moscow Stockholm Copenhagen Helsinki Berlin0

30

60

90

120

150

2013 RevPAR Performance


Transaction Data

Property Location Area (sq m) Price Purchaser Vendor (Million €)

Fralten 1, 2, 3 (Torsplan) Rest of Inner City, Stockholm 30,000 184 KLP Fastigheter NCC

Jericho 34 CBD, Stockholm 21,000 182 AMF Fastigheter Allianz

Polisen 2 (Arken) Solna/Sundbyberg 52,950 140 Delarka Holding Vasakronan

Lustgården 10, 18 Rest of Inner City, Stockholm 21,600 91 Alecta Credit Suisse

Tobaksmonopolet 6 Rest of Inner City, Stockholm 13,600 59 AMF Fastigheter Aberdeen Pan-Nordic fund

Tennet (Gullbergsvass 5:26) CBD, Gothenburg 17,000 72 Platzer Skanska

Kanoldhuset (Bö 92:3) Rest of Inner City, Gothenburg 9,200 22 Balder Aberdeen Pan-Nordic Fund

Nordstaden 28:2 CBD, Gothenburg 9,100 confidential SEFA NIAM

Office Portfolio Mölndal/Partille 9,500 9 NREF Klövern

Masthugget 4:5 Rest of Inner City, Gothenburg 2,500 6 Sigillet TG Holding

Kronan 10, 11 Malmö CBD 17,000 57 Corpus Sireo NIAM

Björnen 6 Malmö CBD 2,200 5 Unknown Briggen

Portfolio at Fornebu Western fringe-Fornebu 70,000 154 Technopolis IT Fornebu

Gullhaug Torg 4 Eastern Fringe-Nydalen 21,000 109 Ness, Risan & Partners Storebrand

Østensjøveien 27 Eastern Fringe-Helsfyr 16,700 55 RS Platou and Malling & Co NCC

Storgata 51 Inner City, Oslo 10,300 confidential Oslo Areal Eiendomsspar

Lille Grensen 7 CBD, Oslo 7,000 37 Nordea Liv Obos Forretningsbygg

DONG domicile Gentofte 57,000 255 ATP DONG

Lyngby Hovedgade 75-85 Lyngby 22,400 56 PFA Ejendomme Sjælsø

Gladsaxe Company House Gladsaxe 15,400 41 PensionDanmark NCC Property Development

Kigkurren 6 Copenhagen 12,000 24 TG Partners Private

ISS Headquarter Søborg 6,200 19 PFA Ejendomme Private

Skanska HQ Helsinki 9,000 32 Union Investment Skanska

Falcon Business Park Espoo 26,300 76 Technopolis Aberdeen Property Nordic Fund

Pöyry HQ Vantaa 25,000 n/a Niam Nordic Core Plus Pöyry

Elimäenkatu 23 Helsinki 3,800 n/a Finnish insurance company HGR & Sveafastigheter Fund III

Plaza Business Park Halo Vantaa 5 700 n/a Finnish institution NCC

Source: Jones Lang LaSalle, Akershus Eiendom AS, Sadolin & Albæk A/S

Representative Office Investment Transactions Q3-Q4 2013

Source: Jones Lang LaSalle, Akershus Eiendom AS, Sadolin & Albæk A/S

Representative Office Leasing Transactions Q3-Q4 2013

Property Location Tenant Leased Area (sq m) Owner

Farsta Centrum Rest of Inner City, Stockholm Stockholms Stad 4,543 Atrium Ljungberg

Gångaren 10 Rest of Inner City, Stockholm Skatteverket 1,500 AREIM

Grävlingen 12 CBD, Stockholm DNB 4,900 AMF Fastigheter

Träsket 17 CBD, Stockholm SAP 2,205 Diligentia

Gårda Norra Rest of Inner City, Gothenburg Försäkringskassan 7,300 Platzer

Gårda Norra Rest of Inner City, Gothenburg GR 3,200 Platzer

Inom Vallgraven 21:11 CBD, Gothenburg Danske Bank 2,500 Wallenstam

Nordstaden 17:8 CBD, Gothenburg Bassoe Technology 2,300 Aberdeen

Österport 7 Malmö CBD Sweco 11,000 Skanska

Betongen 11 Malmö Suburbs Malmö Stads IT 2,400 Briggen

Hans Michelsen 9 Malmö CBD King 1,700 Vasakronan

Klipporna phase 2 Malmö Suburbs Siemens 1,700 Skanska

Fornebuporten Western fringe-Fornebu Aker Solutions 26,000 Aker ASA

Pilestredet 42 Inner City, Oslo Oslo and Akershus University College 13,000 Norwegian Property

Stranden 5 CBD-prime, Oslo DLA Piper 5,000 Norwegian Property

Akersgata 64-68 Inner City, Oslo Ministry of Labour and Social Affairs 18,000 KLP

H.V Nyholmsvej 21 Frederiksberg CBS 8,255 Topdanmark Ejendom A/S

Borgergade 24, 4.-6. Copenhagen Elmer & Partnere 1,875 Jeudan

Lyngbyvej 2 Copenhagen Devoteam 1,030 Topdanmark Ejendom A/S

Nordhuset, Kajakvej 2 Kastrup Broen Armatur A/S 834 Skanska

Kanalvej 2 Lyngby Microsoft 24,000 Danica


* Services in Malaysia are provided through a strategic alliance with Jones Lang Wooton Malaysia

ArgentinaBuenos AiresBrazilCuritibaRio de JaneiroSão PauloCanadaCalgaryMississaugaMontrealOttawaTorontoVancouverChileSantiagoColombiaBogotaMexicoGuadalajaraMexico CityMonterreyTijuanaPuerto RicoSan JuanUnited StatesAlpharetta, GAAltamonte Springs, FLAnn Arbor, MIAtlanta, GAAustin, TXBaltimore, MDBellevue, WABethesda, MDBoston, MACharlotte, NCCherry Hill, NJChicago, ILChicago, IL – O’HareCincinnati, OHCleveland, OHColumbus, OHDallas, TXDenver, CODetroit, MIEast Bay, CAEl Segundo, CA

Fort Lauderdale, FLFort Worth, TXHartford, CTHasbrouck Heights, NJHouston, TXIndianapolis, INIselin, NJJacksonville, FLKansas City, MOKing of Prussia, PALas Vegas, NVLos Angeles, CALos Angeles(North), CALos Angeles(West), CAMelville, NYMemphis, TNMiami, FLMinneapolis, MNMontgomery, ALNew York, NYOrange County, CAOrlando, FLPalo Alto, CAParsippany, NJPhiladelphia, PAPhoenix, AZPittsburgh, PAPortland, ORRaleigh, NCRichmond, VASacramento, CASan Antonio, TXSan Diego, CASan Francisco, CASt. Louis, MOSeattle, WAStamford, CTTacoma, WATampa, FLVienna, VAVirginia Beach, VAWashington, DCWestmont, IL

Americas

AustraliaAdelaideBrisbaneCanberraMelbourneMelbourne – GlenWaverlyPerthSydneySydney – BrookvaleSydney – LiverpoolSydney – MascotSydney – NorthSydneySydney – ParramattaGreater ChinaBeijingChengduChongqingGuangzhouHong Kong – KowloonHong Kong – QuarryBayHong Kong –QueenswayMacauQingdaoShanghai – PudongShanghai – PuxiShenyangShenzhenTianjinIndiaAhmedabadBangaloreChandigarhChennaiCoimbatoreDelhiGurgaon – MG RoadGurgaon – South CityHyderabadKochiKolkataMumbai – Lower ParelMumbai – Parel

NoidaPuneIndonesiaBaliJakartaSurabayaJapanOsakaSapporoTokyo-Nagatac-choTokyo-Sanban-choKoreaSeoulMalaysia*Johor BahruKuala LumpurPenangNew ZealandAucklandChristchurchWellingtonPhilippinesManilaSingaporeSingaporeTaiwanTaipeiThailandBangkokPhuketPattayaVietnamHanoiHo Chi Minh City

Asia Pacific

BelgiumAntwerpBrusselsLiègeCroatiaSplitZagrebCzech RepublicPragueEgyptCairoFinlandHelsinkiFranceLyonParis – Central Paris –La Defense Paris –Plessis-Robinson Paris –Saint-DenisGermanyBerlinDusseldorfFrankfurtHamburgHannoverCologneLeipzigMunichStuttgartHungaryBudapestIrelandDublinIsraelTel AvivItalyMilanRomeKazakhstanAktauLuxembourgLuxembourgNetherlandsAmsterdamEindhovenThe HagueRotterdamUtrechtPolandGdanskKatowiceWarsawPortugalLisbon

RomaniaBucharestRussiaMoscowSt. PetersburgSerbiaBelgradeSaudi ArabiaJeddahRiyadhSlovakiaBratislavaSouth AfricaJohannesburgSpainBarcelonaMadridSevilleValenciaSwedenGothenburgStockholmSwitzerlandZurichTurkeyIstanbulUnited Arab EmiratesAbu DhabiDubaiUK/EnglandBathBirminghamBristolExeterLeedsLiverpoolLondon - CanaryWharfLondon - City London- South East London -Heathrow London -West End ManchesterNewcastle upon TyneNorwichNottinghamSouthamptonUK/ScotlandEdinburghGlasgowUK/WalesCardiffUkraineKiev

Europe, Middle East and Africa

Global Presence

Jones Lang LaSalle is a financial and professional services firm specializing in commercial real estate services and investment management. We create value for companies and institutions that invest in and use real estate. Our 48,000 people work across 1,000 locations in 70 countries to serve the global, regional and local needs of corporates, investors and developers. Our integrated services offering is grounded in expertise in all property types, a deep understanding of real estate markets and capital markets, and is coordinated and consistent across geographies.

We hold ourselves accountable for the social, environmental and economic impact of our operations. Our people have the skills and opportunity to reduce the significant impacts that real estate has on the environment. We will lead the transformation of the real estate industry by making a positive impact both in – and beyond – our business.

Jones Lang LaSalle World Wide

© Copyright Jones Lang LaSalle 2014. This publication is the sole property of Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior written consent of Jones Lang LaSalle IP, Inc. The information contained in this publication has been obtained from sources generally regarded to be reliable. However, no representation is made, or warranty given, in respect of the accuracy of this information. We would like to be informed of any inaccuracies so that we may correct them. Jones Lang LaSalle does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication.

Capital Markets:Our strategic advisory services maximize conditions for profitable real estate transactions. Whether your investment strategy calls for buying, selling or financing, we’ll provide a capital solution that maximizes both value and returns.

Corporate Solutions:Before we put our knowledge of local real estate markets to work, weget to know your short- and long-term business objectives and youroccupancy needs. We’ll advise on how to reduce the costs and risksassociated with leasing, ultimately finding space for you that maxi-mizes workplace flexibility and productivity.

Leasing:Our leasing agents are known for being the most creative and knowledgeable in the industry. We’ll help you meet your financial goals by taking a proactive approach to positioning your property, securing tenants and maximizing rental rates.

Research & Valuation:We use our global experience and deep knowledge of local real estate markets to providean accurate, reliable evaluation of your property or research reports as a basis for decision making. We per-form valuations and appraisals for single assets, global portfolios and a range of property types.

Retail & Development:The world of retail and leisure may be fast-moving, but we understand evolving consumer demand, retailer strategies and the trends that are altering the retail landscape. Our experts use their deep industry expertise, local market knowledge and global connections with investors and retailers to enhance the value of the property you invest in or use.

Contacts: StockholmJones Lang LaSalleLästmakargatan 20Box 1147SE-111 81 StockholmTel: +46 8 453 50 00Fax: +46 8 453 50 10www.joneslanglasalle.se

GothenburgJones Lang LaSalleLilla Bommen 6Box 1058SE-405 22 GöteborgTel: +46 31 708 53 00Fax: +46 31 708 53 10www.joneslanglasalle.se

HelsinkiJones Lang LaSalleMikonkatu 15 AFI-00100 HelsinkiTel: +358 207 61 99 60Fax: +358 207 61 99 62www.joneslanglasalle.fi

In cooperation with: Oslo Akershus Eiendom ASHaakon VII’s gate 5, 7 etg NO-0161 OsloTel: +47 22 41 48 00 Fax: +47 22 41 48 06www.akershus-eiendom.no

Copenhagen Sadolin & Albæk A/SPalægade 2-4DK-1261 Copenhagen KTel: +45 70 11 66 55Fax: +45 33 32 72 96 www.sadolin-albaek.dk

Jones Lang LaSalle Sweden – Our Services

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