Jón Þór Hjaltason, owner and managing director of Miðjan hf., says that many companies are showing interest in the new office tower at Grensásvegur 1. Although the formal presentation of the tower has not yet begun, the top two of the seven floors have been rented and they will be delivered fully furnished.
At Grensásvegur 1, there are also eight commercial spaces on the ground floor of adjacent apartment buildings, and Jón Þór says that two of them have been rented out. They are intended for shops and services.
In total, this is about 4,000 square meters of commercial space. The tower is about 2,900 square meters and the commercial spaces on the ground floor of Grensásvegur 1A, B and C are about 1,100 square meters.
Have received inquiries
“We have received inquiries and there has been shown interest in the office tower without advertising anything. People have contacted us, but we have also a powerful website, g1.is, which was created by ONNO and has proven to be very successful for us,” says Jón Þór.
Asked if the interest is explained by the limited supply of office space in this quality category, Jón Þór says there is always a need for new office space, almost no matter what is going on in society. There is always a need to change things up and bring something new.
The development on Grensásvegur is being managed by the real estate company G1, which is owned by Miðjan, a company owned by Jón Þór and his wife, Ragnhildur Guðjónsdóttir.
The real estate company G1 purchased the building site from the engineering firm Mannvit. In parallel with this transaction, Mannvit, now called COWI, negotiated with Miðjan for a lease on Urðarhvarf 6.
The development at Grensásvegur 1 began in 2020 with the demolition of older buildings that had to be replaced. Among other things, the Icelandic Film School building was demolished, but the old two-story Veitur ohf building still stands at the southern end of the site.
A total of 181 apartments
Four apartment buildings were built on the site with a total of 181 apartments. The office tower opposite Glæsibær shopping cent is part of the largest apartment building, which is skein-shaped, referring to Skeifan. The ground floor commercial spaces, however, face south and west towards Ármúli and Grensásvegur.
Between the buildings is a courtyard with good daylight. There are great views from many of the apartments, and Jón Þór says a lot has been put into the finishing touches. The apartments will be delivered fully equipped with kitchen appliances and flooring. The total cost of the project is 14-15 billion Islandic krona. The high interest rates and the taxes that the city imposes on such developments through infrastructure fees and street construction fees play a role in the high construction costs.
The first phase apartments sold out quickly
As mentioned earlier, the development began in 2020 and the first building, Grensásvegur 1D and 1E, went on sale in the fall of 2021. It was reported in Morgunblaðið on November 16, 2021, that 43 apartments out of 50 had been sold since the apartments went on sale on Friday, November 5 of the same year. It should be noted that the Central Bank’s main interest rate was 1.5% at the time, after historic interest rate cuts during the pandemic, and there was widespread chaos in the real estate market.
In the spring of 2023, Morgunblaðið reported that the G1 Real Estate Company had waited to market 41 new apartments on Grensásvegur until more favorable conditions had arisen. Just over a year later, or on June 20, 2024, 85 of the 91 apartments that had come on the market had been sold.
Since then, more apartments have come up for sale, and Jón Þór says that 120 of the 167 apartments have now been sold. An additional 14 apartments will go on sale around Easter this year at Grensásvegur 1C, the southeast most point on the property
Designed by Archus
COWI (formerly Mannvit) is in charge of construction management. Gunnar Páll Kristinsson of Rýma Architects and Archus Architects designed the buildings, and Guðmundur Gunnlaugsson of Archus Architects is the main architect and main designer of the project.
“Although Miðjan hf is the owner of Real estate company G1, the G1 company is registered for this plot and is the construction contractor. We then tender out the work. For example, Meistarasmíð took care of all the concrete work for us, but that company is now pouring the Orkureitinn next door.
After that, we always have the same masters for all the work – plumbers, electricians, tinsmiths, carpenters and bricklayers – men who have worked with us since 1987,” says Jón Þór, revealing that the development at Grensásvegur 1 will be the last major project he undertakes.
Furnishing the floors
What impact have interest rate increases had on the market?
“The high interest environment is hurting the housing sales and business operations. Companies are holding back and some are delaying moving into new premises because the capital is very expensive.
The office tower at Grensásvegur 1, however, is such an impressive building and in such a good location that I have no worries that the premises will not be rented out in a short time.
This needs to be taken care of, but we furnish all the floors in the office tower and deliver them fully equipped with equipment and tools, although not with furniture, so that the tenants receive them fully equipped.
Our architect draws the spaces and selects materials in consultation with the tenant and then I carry this out according to their needs,” says Jón Þór, one of the seven floors in the office tower is shown in the picture above.
The problem of choosing
What about the spaces for shops and services on the ground floor? What activities can be there?
“I obviously have no obligations on that, but there are apartments in the buildings and that has to be taken into account. That is why I have not wanted to sell these spaces, but I have wanted to control myself which activities are going in there so that the residents have good neighbors. We are trying to find the right parties, so that the activities are suitable for the premises, that is the motto.”
You have decades of experience in the real estate market. The Central Bank is expected to lower interest rates on March 19 and then continue to lower interest rates. How do you read expectations in the market? What is the mood?
“You would like to see interest rates fall to 6-6.5% before the end of the year, assuming there are no major economic shocks, but now the sun is rising and you hope that the economic situation will follow suit,” says Jón Þór.
Got more parking
Underneath the buildings is a basement with 183 parking spaces and a 300 square meter bicycle storage. Parking spaces in the basement must be rented, but they are shared with employees and guests of the commercial building.
Jón Þór admits that he was worried about the parking issues in the beginning, but he no longer is.
“According to the city’s plan, there were supposed to be 0.6 parking spaces per apartment. I didn’t like that. There were only supposed to be 120 parking spaces at the beginning, even though the office tower was included, but in a few months I increased it to 180 spaces, which I think was just right. The experience with the first 100 apartments that have been moved into is that passes for 60 parking spaces have been sold. So exactly 0.6 spaces have been rented per apartment, and the city’s original plan was therefore correct.
It can be imagined that 100 spaces will be rented for the apartments and 80 for the office tower, which is seven stories high. Then there will be shared use. It can be assumed that when residents leave the house in the morning, the people in the office tower are getting to work. So the shared use will be good. I don’t see that there will be a shortage of parking spaces,” says Jón Þór in conclusion.
Source: Mbl.is
