COVID-19: State of the Occupier Update - Stockholm

Universities and upper-secondary schools have been closed for the last month, but there is no government-mandated restriction on work. The Swedish model, freedom with responsibility, is very much reflected in how occupiers are handling the situation. Most offices are open, but the majority of staff are working from home and trying to avoid physical meetings as much as possible. We estimate physical occupancy is about 15-20% with variation among sectors.

We haven’t yet seen significant impacts to the office market but companies that are not in a rush to relocate are taking a “wait and see” approach. We see a light upswing in the demand for short-term leases, but it is still too soon to measure the trend. Retail occupiers and office occupiers in heavily impacted sectors are asking for help on achieving short-term rent abatements and/or rent-free periods.

OCCUPIERS?

Retail occupiers are sending letters to all landlords requesting rent relief. There are not wide scale similar movements by office occupiers, other than office occupiers in heavily impacted sectors.


LANDLORDS? DEVELOPERS / INVESTORS?

Some landlords are waiving penalties connected to opening hours and providing rent reductions. Developers and investors are taking a “wait-and-see” approach, which already has resulted in postponed projects. The government is proposing landlords apply for subsidies to pass through rent abatement up to 50% for heavily impacted sectors.

The market has been strongly landlord favorable over the past four years, with vacancy consistently under 4% in the central business district, leaving little room for negotiation. There is a general sentiment of uncertainty, and we expect rents to stagnate or trend downward soon. In the short term, we see an opportunity to secure more favorable deals for those who are willing to make quick decisions.

Contact us.