Newsec Property Outlook Int - Autumn 2026

No property type has been declared dead as often, or as prematurely, as the office. Since 2020, the headlines have been gloomy, but leasing data tells a more stable and far more interesting story. In the autumn edition of Newsec Property Outlook, we trace the office market across the Nordics and Baltics over a quarter of a century. The analysis is based on Newsec’s proprietary database containing several million lease agreements, compiled over approximately 25 years through 2026.

Vacancy No Longer Measures Weakness, but Quality

There is no longer a single vacancy rate that adequately describes the office market. In all seven Nordic and Baltic capitals, vacancy rates in the highest-quality stock are below the overall market vacancy rate. Stockholm is the most polarised market: a Grade A vacancy rate of 4.6 percent, compared with 13.5 percent for the market as a whole, means that vacancy in prime office stock is nearly three times lower. The same pattern can be seen in Helsinki, Oslo and Copenhagen, as well as in the Baltics, albeit at lower levels.

In other words, the vacancy problem is not an office problem, it is a problem affecting older and less competitive buildings.

Seven Countries, the Same Story

Tenant size has a significant impact on how long companies are prepared to commit. Large tenants sign leases that are around five times longer than those signed by the smallest tenants. At the same time, lease terms have remained stable at around five years across Scandinavia and the Baltics, with no clear shift towards shorter commitments.

The major change is instead taking place in the amount of space tenants require. They are keeping the address but giving back square metres. In Finland, the average size of newly signed office leases decreased by 27 percent between 2021 and 2024. In Sweden, the median leased space has fallen from around 225 to 190 square metres since the early 2000s, while in Norway the average leased area has roughly halved since 2007.

Sweden’s historical dataset, comprising around 356,000 lease observations since 2001, makes it possible to examine tenant behaviour in greater depth. At each lease renegotiation, approximately 71 percent of office space is retained. However, since 2016, tenants that remain in place have progressively reduced the amount of space they occupy, and since the pandemic they have, on average, given back around one-fifth of their previous space.

The reduction in space requirements therefore began several years before the pandemic, challenging the common perception that remote and hybrid working marked the starting point of companies’ reduced demand for office space. Rather, the pandemic appears to have accelerated a trend that was already under way.

Outlook: A More Selective Office Market

For property owners and investors, the conclusion is clear. Stable cash flows can be found in buildings capable of securing long-term commitments from large tenants—modern, efficient and well-located properties—while weaker assets increasingly need to compete through incentives, price adjustments or repositioning. Vacancy has therefore shifted from being primarily a measure of market weakness to increasingly becoming a reflection of property quality.

“The office is not dying. It is evolving—becoming smaller in some places, more specialised in others and, at its best, more human.”
Max Barclay, CEO, Newsec

The latest edition of Newsec Property Outlook provides an in-depth analysis of the office market’s structure, risks and opportunities, giving investors, property owners and decision-makers the tools they need to navigate an increasingly selective market.