Debate Article This is a debate article written by an external contributor. The article reflects the writer’s opinions.
As the macro economy is on the verge of lifting real estate over the hurdle, there are great opportunities for growth and value development within commercial real estate in the north. However, the real estate industry in Northern Norway has been characterized by small entities and a significant untapped potential for improvement.
The arrows are now cautiously pointing upwards in a commercial real estate market that, for the past two years, can be described as leaden. Interest rates have now peaked, and the publicly listed sector is growing again, including within real estate. There is every reason to believe that the rest of the real estate market will follow suit.
Additionally, the unique northern Norwegian economic drivers are strong. Seafood, tourism, access to energy, and defense investments will generate economic growth and more jobs in the north. A growing economy creates a foundation for good business for the real estate industry.
And people in both the north and south want to live and work in attractive and modern cities, with all the offerings that entails. In this area, we and our colleagues in the real estate industry can make a significant, positive difference.
Poor building stock, weak operation, maintenance, and management result in low rental prices and high costs. This also makes Bodø, Tromsø, Narvik, and Harstad less attractive cities to live and work in. We see enormous potential in northern Norwegian real estate. But potential is only potential – is there a way to unlock it?
Professional and large-scale real estate development in the north requires specialization and focus, knowledge, and expertise. New environmental and climate requirements from the authorities “push” us in a direction where the most interesting tenants are located and also provide opportunities in the form of support schemes and subsidies. In facing this, “the weak” will drop out or take the initiative for consolidation themselves.
Based on my previous work developing Bjørvika in Oslo, I have experienced that professional urban development and the establishment of attractive cities lead tenants to be willing to pay a bit more. Ultimately, urban growth and urbanization are regional, national, and global trends that continue on.
I want to emphasize that commercial real estate and urban development are team sports. We at Polaris Eiendom wish to collaborate with municipalities, businesses, civil society, and other landowners on positive societal development and professional, large-scale, profitable real estate operations in the north. Together, we will “bake a bigger cake” – our experience suggests that it is entirely possible to create value on several fronts simultaneously.
Our vision is for the northern Norwegian cities to become Norway’s most attractive. As the market for commercial real estate now shifts, we all have the opportunity to take significant steps in that direction.
JOIN THE DEBATE! We encourage readers to contribute their opinions, both online and in print.
Interview Between Time.news Editor and Real Estate Expert
Time.news Editor: Welcome, and thank you for joining us today! We’re excited to delve into the evolving landscape of commercial real estate in Northern Norway. With the emerging opportunities and challenges in this sector, I’m eager to hear your insights. Can you start by detailing what has changed in the macroeconomic landscape that is affecting commercial real estate in the north?
Real Estate Expert: Thank you for having me! The macroeconomic environment is indeed shifting. After a prolonged period of stagnation in the commercial real estate market, we are witnessing a cautious upward trend. Interest rates have peaked, which stabilizes borrowing costs, and we’re seeing a resurgence in the publicly listed sector. This positive momentum is expected to ripple through the broader real estate market, facilitating growth in the north.
Time.news Editor: Interesting! So, it seems like actual economic drivers are crucial as well. Could you elaborate on what specific factors are at play in Northern Norway that can unlock this potential?
Real Estate Expert: Absolutely! Northern Norway has some unique economic drivers such as a burgeoning seafood industry, thriving tourism, significant investments in energy, and increasing defense-related expenditure. These sectors are not just contributing to job creation, but they’re also enhancing the overall economic landscape, which directly feeds into real estate demand. As more businesses establish themselves and attract a workforce, the need for commercial and residential spaces will naturally rise.
Time.news Editor: That’s a compelling point. However, you mentioned the untapped potential and existing challenges such as poor building stock and weak property management. How do these issues impact the attractiveness of cities like Bodø, Tromsø, Narvik, and Harstad?
Real Estate Expert: These cities do have great potential, but current operational shortcomings can detract from their appeal. Poor building conditions and inadequate maintenance lead to low rental prices, making it less attractive for both residents and businesses. If we want to revitalize these urban centers, we need to focus on upgrading the existing building stock and enhancing property management practices. This will not only make them more enticing for residents but will also provide a catalyst for investment.
Time.news Editor: It sounds like a multifaceted problem that requires a community effort to solve. In your opinion, what are some practical steps the real estate industry could take to tap into this potential?
Real Estate Expert: There are several strategies that can be implemented. First, collaboration among various stakeholders—developers, local governments, and economic organizations—is critical. They must work together to create a comprehensive revitalization plan. Secondly, investing in modern amenities and sustainable building practices can also attract tenants. promoting the unique lifestyle and opportunities these northern cities offer can draw both businesses and residents, turning their potential into a thriving reality.
Time.news Editor: Those solutions sound promising! As we wrap up, what are your hopes for the future of commercial real estate in Northern Norway in the next few years?
Real Estate Expert: I remain optimistic! With the right investments and strategies in place, Northern Norway has the potential to emerge as a vibrant hub for business and living. The youthful energy combined with our unique natural resources could transform our cities into attractive destinations. If we capitalize on this moment, we can unlock significant growth and development, benefiting the entire region.
Time.news Editor: Thank you for sharing your insights! It’s clear that while there are challenges, the opportunities for commercial real estate in Northern Norway are substantial. We appreciate your time and perspective today!
Real Estate Expert: Thank you! It’s been a pleasure discussing this vital topic, and I look forward to seeing how the industry evolves.