A more favourable macroeconomic environment
After a turbulent start to the 2020s and despite a continued serious geopolitical climate, we now see a turn in the macroeconomic environment. Inflation has come down as well as interest rates and the real estate industry is no longer under pressure from increased financial expenses nor from further decreases in value. Falling long-term interest rates and expectations of further interest rate cuts are beneficial for the whole industry which will eventually have a positive impact on the real estate market. The interest rate reductions are also a prerequisite for avoiding a further downturn in the economy.
Continued strong net letting
It is evident in our letting statistics that our core business is stable and function well. Net letting during the first three quarters has amounted to SEK 99 million, of which SEK 13 million has taken place in the third quarter, mainly due to a number of fine lettings in Stockholm and New York.
The operating surplus has decreased compared with last year because of a number of divestments. In a comparable portfolio, income has, however, increased by 3 per cent and operating surplus by 1 per cent. Profit from property management amounted to SEK 736 million for the first three quarters.
Intensity in the portfolio
Many now witness an office rental market that is somewhat hesitant. The supply of office premises is increasing and rental increases are slowing down, which increases competition for every vacant square metre. However, at Corem, we are experiencing a continued high level of demand and intensity of transactions at almost all locations, which is also reflected in our net letting statistics.
There is still some uncertainty in the office rental market about how to best react to continued opportunities for working from home and how this will affect the demand for premises, but we experience this as being just applicable to Stockholm. In the rest of the country, people are back at work and office attendance is also continuously increasing in Stockholm. It is evident that office design has become increasingly important given new digital working methods and as a social meeting place.
Kista – one of Sweden’s most innovative places and Corem’s strongest letting unit to date during 2024
The Stockholm market component Kista is one of Corem’s prioritized development areas where we and other owners of real estate are now developing the location to a vibrant urban environment with a mixture of workplaces, service and housing.
In Kista, large established companies are located side by side with new tech companies, which makes it one of Sweden’s most innovative places. The location with good communications close to Stockholm City and Arlanda airport, with direct access to the E4 and E18 motorways, is unique. There are top modern offices here but unlike other alternatives in the city centre, they are offered at competitive rental levels, which make the area perfect for large and small companies and for public authorities and activities.
It is worth noting that Corem’s portfolio in Kista has by itself produced a positive net letting of SEK 19 million, which makes the management unit Corem’s strongest during the quarter. Kista also accounts for 50 per cent of Corem´s total net letting in Sweden during the year. Among other lettings, we have let approximately 6,000 square metres to Mycronic, which is moving parts of its business from Täby to Kista, and around 1,100 square metres to Transcom. This is evidence of a well-functioning office letting market and that we at Corem offer competitive premises.
