As the only major urban center in the County of Jämtland, and with traditions as a market town and a military base, Östersund will continue to attract new inhabitants. Öster- sund has much to offer for a town of its size. The County has 127,000 inhabitants, of whom 58,000 live in Östersund, which is the provincial administrative center. Employment is based on the service sector, with a high proportion of pub- lic-sector administration. In 2005, three military facilities were closed, but this development is characterized by con- siderable faith in the future. Discussions with 14 central gov- ernment authorities are being conducted, with a view to determining which operations are to move to Östersund. In addition, the municipality plans to consolidate activities for local higher education and research, retailing in the town center, public-sector services, and engineering industry know-how, with special expertise in vehicle electronics appli- cations and the telecom sector. Östersund/Jämtland is also an attractive tourist area, appealing to Swedish skiers in the winter, and visitors from Norway in the summer
Markets
The largest property owners are the municipality, Akelius and FABÖS. In 2004, Norrviden took over Hallström & Nisses and is now a major player in the office and retail sec- tor. In a normal year, there are 3–9 transactions involving commercial properties, and the participants are usually local companies in various size categories.
The prime location for office premises is the central area, with rents in the SEK 750–1,600/ m2range. Campus, which
has new or recently converted premises of a high standard, is considered to be the A location for offices.
There is considerable demand for relatively large offices in Östersund, and there are vacancies in the case some smaller office premises. The yield requirement is unchanged at 8–9.5%.
The Odenskog industrial estate and southern district are attractive for industry and some retailing operations, and vacancies are low in these areas.
Average rents are in the SEK 375–800/ m2range, with a
yield requirement of around 8.5–10.5% in prime locations and in areas with substantial retail operations.
Vasallen’s property portfolio
Vasallen’s property holdings in Östersund consist of two former military facilities: the F4 air force wing and the FS defense schools. Following the defense policy decision in 2004, Vasallen acquired an additional facility in Östersund (I5), which was sold to a local property company during the autumn.
Vasallen had access to the F4 facility as from June 1, 2005. This facility is in the immediate vicinity of the local airport at LEASE PORTFOLIO BY SECTOR, ANNUAL RENTS
PROPORTION OF THE GROUP’S REMAINING LEASE VALUE POSITION IN ÖSTERSUND
RENEGOTIATION OF LEASE PORTFOLIO, ANNUAL RENT SEK M MAJOR TENANTS
Tenant
Armed forces Östersund municipality
National Rural Development Agency
LEASE PORTFOLIO AT DECEMBER 31, 2005
Annual rent, Proportion, Premises Leased until SEK M % floor space, m2
2005 2006 4.0 40 44,137 2007 2008 2.9 29 4,298 2009–11 2012 3.1 31 3,070 2013 2014 2015 et seq. Residential, etc. Total 10.0 100 51,505
Frösön, about 10 kilometers from the center of Östersund. This site covers 69 hectares, with premises ranging from mod- ern offices to workshops and hangars for the JAS fighter plane, and a total floor space of about 69,500 m2.
Vasallen had access to the FS facility as from October 1, 2005. It is located in the center of Östersund, to the north of Campus, and the total site area is 13.4 hectares. All the build- ings were constructed after 1982 and offer a high standard of accommodation. The premises floor space, which mainly consists of education facilities, is about 51,500 m2.
Activities during 2005
Vasallen established a local organization very quickly, and leasing operations started immediately.
New types of operations moved in to vacant premises as the armed forces moved out, particularly at the FS facility, which will probably be renamed “Fyrvalla”.
Planning for both facilities has commenced, in coopera- tion with the municipality. In the case of Fyrvalla, a draft outline plan was presented at the beginning of December. Customer structure
The armed forces will continue to lease premises in both facilities until June 30, 2006.
Fyrvalla has attracted the greatest interest on the part of new, potential tenants, particularly those conducting opera- tions in the office or educations sectors. Leases have been signed, for example, with the Social Insurance Office, the National Rural Development Agency, the Swedish Business Development Agency (NUTEK) and the Jämtland Senior Secondary Schools Association.
At the F4 facility, proximity to the commercial airport presents both opportunities and limitations. The location makes the site attractive for aviation-oriented operations and logistics, but the noise carpet restricts development for housing and educational purposes, for example. An agree- ment has been signed with the armed forces for continued tenancy for home guard operations and an agreement has also been signed for police helicopter operations. Future development
According to the plans prepared by the municipality in the late 1990s, Fyrvalla is part of the Campus area. This com- plies with the development of an administrative center envisaged by Vasallen. At the current leasing rate, Fyrvalla may be fully tenanted by 2008.
The prerequisites for the F4 facility, with a location out- side the urban area and close to the airport, are completely different. Development partly depends on the airport’s future, and Vasallen is cooperating with the Swedish Civil Aviation Administration in this matter.
LEASE PORTFOLIO BY SECTOR, ANNUAL RENTS PROPORTION OF THE GROUP’S REMAINING LEASE VALUE POSITION IN ÖSTERSUND
RENEGOTIATION OF LEASE PORTFOLIO, ANNUAL RENT SEK M MAJOR TENANTS
Tenant
Armed forces
National Criminal Investigation Department Residential
LEASE PORTFOLIO AT DECEMBER 31, 2005
Annual rent, Proportion, Premises Leased until SEK M % floor space, m2
2005 2006 23.2 96 67,860 2007 2008 2009 2010 0.8 3 1,064 2011–12 2013 2014 2015 et seq. Residential, etc. 0.2 1 515 Total 24.2 100 69,439
Property designation: Part of Kungsgården 5:1 Övriga, 1%