American, German and Swedish real estate investors have been actively buying into Norwegian commercial real estate projects, mostly office buildings, in recent months. Local experts say they’re driving up prices, while Norway’s huge oil fund is arguably doing the same thing in markets abroad.
“It worries me a little, if price expectations aren’t maintained,” Bård Bjølgerud, chief executive of the Norwegian real estate consulting firm Pangea Property Partners, told newspaper Dagens Næringsliv (DN). “In a year or so there will be a market correction. It can be brutal.”
Meanwhile, an office building on the waterfront in Oslo recently sold for a record NOK 94,482 per square meter and foreign investors were behind 40 percent of all real estate purchases during the first quarter of this year. “Historically, they’ve stood for 6- to 8 percent in Norway,” Johan O Solberg of Oslo-based consulting firm CBRE told DN. “Last year it was 30 percent.”
They’ve been attracted by Norway’s strong real estate market, stable political environment, economic growth, extremely low interest rates and the hunt for sizeable gains. Solberg sees no disadvantages.
“Foreign investors raise the quality of both buildings and the market,” Solberg told DN. “They have different types of demands.”