Price adjustment and vacancies on theStockholm market ? Estimation of rent levelsdue to office-allocations
Rental vacanciesOffice rentCBDPriceAdjustmentFirst difference modelPrognosisPaneldataPaneldataHyresvakanserKontorshyrorCBDPrisjusteringFörändringsmodellPrognostiseringPaneldata.
The Stockholm office market segment have for a long time been considered a safe havenwhen it comes to withstand negative turmoil in the form of rental compression due toeconomic fluctuation, especially in the CBD demographic. Recently however, a large numberof banks and institutions, amounting to some 200000 square meters, have decided to relocateto more peripheral locations with the aim of cost reductions on rent. This mass exodus isstudied with focus on rental dynamics as the result of increased vacancies. Other variables arestock changes and employment. The method is econometric combined with an interviewseries. The data is a panel dataset containing 900 observations. The different models that arebeing used is the vacancy gap model, an Error Correction Model and a dynamic lag model inthe form of a first difference model. Due to non-stationary variables, some models wererejected. A prognosis model has been created for the economic calculations. The results aredisplayed in a number of scenarios ranging from unchanged rents to severe rental drops. As acomprehensive result this study concludes that a rental drop in the range of 10-20 percent is tobe expected. A number of positive side effects are expected to unfold as a result of therelocations.