Vacant office space is surging across Sweden’s three largest cities, signalling a profound and lasting transformation in how—and where—work is conducted. New data from leading property consultancy Newsec reveals a dramatic spike in office vacancies over the past year, with nearly 500,000 square meters of commercial real estate now sitting empty in Stockholm, Gothenburg, and Malmö combined.
Stockholm has been hit hardest, with its office vacancy rate soaring from 9.1% in 2024 to 14.3% in 2025—a 57% increase in just 12 months. Gothenburg followed closely, climbing from 8.6% to 11.4%, while Malmö saw an even steeper rise, jumping from 8.5% to 12.5%. These figures underscore a nationwide trend that extends far beyond cyclical economic downturns.
Beyond Recession: A Paradigm Shift in Workplace Strategy
While economic caution amid lingering recessionary pressures has certainly played a role—companies are trimming real estate footprints to cut costs—the deeper driver is structural. “This isn’t just about the economy,” explains Max Barclay, CEO of Newsec. “It’s about a fundamental rethinking of space efficiency and work culture.”
Fifty years ago, Swedish offices allocated around 30 square meters per employee. Today, that figure has been slashed to just 12–15 square meters, thanks to denser layouts, hot-desking, and the normalization of hybrid work. The pandemic may have accelerated remote work, but its legacy is now embedded in corporate strategy: less space, more flexibility.
Old Stock Suffers—New Builds Hold Strong
Crucially, the crisis is not evenly distributed. Vacancies are overwhelmingly concentrated in older, less adaptable office buildings—particularly those lacking modern amenities, sustainability certifications, or flexible floor plans. “New developments are still leasing successfully because they’re designed with today’s tenant demands in mind,” Barclay notes. “The problem lies with outdated assets that can’t compete.”
Nowhere is this more evident than in Stockholm’s Frösunda district, where vacancy rates have tripled in a year—from 7% to nearly 22%. Nearby Kista is faring even worse, with a staggering 27% of office space unoccupied. These areas, once symbols of Sweden’s tech-driven growth, now exemplify the vulnerability of mono-functional business parks built for a pre-hybrid era.
A Tenant’s Market—With Strategic Opportunities
For businesses, the glut of available space has created unprecedented leverage. “We’re firmly in a tenant’s market,” says Jesper Trotzig, CEO of Tenant & Partner. “Companies can negotiate better terms, secure prime locations at lower costs, and demand higher-quality environments.”
Yet for property owners—especially those holding legacy assets—the outlook is bleak. Falling rental incomes, rising maintenance costs, and declining valuations are pressuring balance sheets. Some investors are already exploring radical solutions: converting underperforming offices into housing, student accommodations, or senior living facilities.
From Crisis to Catalyst
Barclay cautions against framing this as a doomsday scenario. “This is less a crisis and more a necessary transition,” he argues. “The market is correcting after decades of overbuilding and misaligned design.” He remains optimistic that economic recovery—expected to gain traction by late 2026—will gradually absorb some of the excess supply, particularly in well-located, future-ready buildings.
Still, the long-term trajectory is clear: the era of sprawling, underutilized office campuses is ending. The winners will be those who adapt—repurposing obsolete spaces, embracing mixed-use development, and aligning real estate strategies with the realities of modern work.
What the future holds
As Sweden navigates this inflection point, policymakers and urban planners face urgent questions: How can cities incentivize adaptive reuse? What zoning reforms are needed to facilitate conversions? And how can sustainability goals be advanced through redevelopment rather than demolition?
One thing is certain: the office isn’t dead—but its future will look nothing like its past.