Stockholm office space the second priciest in Europe

Catherine Edwards
Catherine Edwards - [email protected]
Stockholm office space the second priciest in Europe

Offices in Stockholm are the second most expensive to rent in Europe, according to a new ranking, in which the Swedish capital's business district was outdone in Europe only by London.

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The study by real estate management firm JLL looked at how much it costs to rent premium office space in 54 cities across the world, and ranked Stockholm 20th worldwide for rent costs.

"Rents in Stockholm have been increasing faster than in the rest of Europe for at least the last two years," Tor Borg, JLL's Head of Analysis for the Nordics, told The Local. "There are increases of around ten to 15 percent per year in the Stockholm office market, which is well above the European average."

Globally, demand for office space is high and the available space is low, causing rent prices to soar, but this trend is particularly pronounced in the Swedish capital.

"The economy is doing very well in Sweden if you compare it to the rest of Europe, and the city of Stockholm is doing especially well, plus employment levels are going up," Borg explained. "There also hasn't been much office construction in recent years, and that pushes up rents."

The growth of the tech sector in particular was a key factor, and JLL's researchers noted that global tech hubs featured heavily among the most expensive markets.

However, it added that "these cities will need to work hard to maintain their attraction for technology firms and start-ups in the face of strong competition from more affordable tech hubs like Berlin and Amsterdam."

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Office space in premium locations in Stockholm costs around 800 kronor ($95) per metre squared according to JLL's data, a figure which was the highest in Europe apart from London, whose West End and City neighbourhoods both featured in the top 20, where office space costs $193 and $108 to rent respectively.

Premium office space in Berlin, Amsterdam, and Brussels, can be rented for around half the cost of a Stockholm office, Borg said. In its second year (although 2017 was the first year in which Stockholm was included in the study), the Premium Office Rent Tracker report standardized costs including rent, service charges, and property tax in order to enable a better international comparison.

Overall, central Hong Kong was the most expensive space to hire premium office space, according to JLL's rankings, with rents of more than $323 per metre squared. It was followed by Midtown Manhattan and London's West End, where one square metre of office space cost $194 and $193 respectively.

These areas were followed by Beijing Financial Street, Silicon Valley, Delhi, Beijing Central Business District, Shenzhen in Guangdong Province, China, Marunouchi in Tokyo, and Pudong in Shanghai.

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