The iconic Söderhallarna retail and public complex in central Stockholm is set for a comprehensive transformation, thanks to a €79.5 million climate loan. This significant financial boost underscores Sweden’s commitment to sustainable urban renewal and the modernization of existing real estate in line with environmental targets.
A Strategic Asset in the Heart of Södermalm
Located at Medborgarplatsen in the vibrant Södermalm district, Söderhallarna plays a central role in Stockholm’s social and commercial life. Built in 1992, the complex houses an indoor market, cinema, office and retail spaces, and popular food venues.
Despite its popularity, the property has become outdated in terms of energy efficiency, accessibility, and design standards. To address these issues, property owner Atrium Ljungberg has launched a major redevelopment initiative to bring the building up to modern environmental and functional benchmarks.
Financing from the European Investment Bank
The key funding source for the redevelopment comes from the European Investment Bank (EIB), which has granted a €79.5 million climate loan. The loan is specifically intended for projects that reduce carbon emissions, improve energy performance, and enhance the sustainability of urban infrastructure.
According to the EIB, the Söderhallarna project aligns with the EU Green Deal and Stockholm’s climate neutrality strategy. It is also part of the EIB’s Climate Bank Roadmap, which aims to redirect capital flows into projects with a net-zero carbon footprint.
A Sustainable Transformation
The redevelopment will not only refresh the complex’s visual and functional appeal but will also significantly upgrade its environmental performance. Once completed, energy consumption is expected to drop by more than 40%. Planned upgrades include modern ventilation systems, improved insulation, rooftop solar panels, and rainwater harvesting systems.
The project will also:
- Redesign internal layouts for better use of public space
- Create new pedestrian pathways and public terraces
- Expand food and co-working areas
- Enhance accessibility for people with reduced mobility
- Use recycled building materials and focus on construction waste reduction
Impact on Stockholm’s Property Market
The Söderhallarna redevelopment is expected to catalyze further growth in the Södermalm area, already one of Stockholm’s most desirable districts for both living and investment. As the neighborhood’s infrastructure improves, surrounding property values are expected to rise.
As of 2025, the average residential property price in Södermalm stands between €8,000 and €10,000 per square meter. Analysts anticipate a 5–10% price increase in the area following the completion of the project.
The commercial rental market will also benefit. Rents for upgraded office and retail spaces are projected to rise from current levels of €250 to between €300 and €350 per square meter per year.
Green Loans as a Market Driver
This loan is part of a broader trend toward sustainable financing in the European property sector. According to Bloomberg, total green investment in European real estate surpassed €120 billion in 2024, with momentum continuing into 2025.
In Sweden alone, more than 30 sustainable construction and refurbishment projects have received green financing in the first half of 2025. Demand for ESG-compliant (Environmental, Social, and Governance) projects remains high among both public institutions and private investors.
Architectural Vision and Cultural Preservation
The redevelopment has been designed in collaboration with White Arkitekter, a renowned Swedish architecture firm known for its sustainable designs. The vision is to retain Söderhallarna’s cultural identity while adapting it to contemporary needs.
Special attention will be paid to preserving the iconic market hall, a core element of local life. Additionally, the updated complex will feature public art installations, pop-up exhibitions, and event spaces, making it a vibrant cultural destination for both residents and visitors.
Timeline and Phased Construction
Construction is scheduled to begin in the second half of 2025 and will proceed in several phases to minimize disruptions. Full completion is expected by 2028. Importantly, parts of the complex will remain open during construction to support existing tenants and public access.
Market and Expert Response
While Atrium Ljungberg has not disclosed projected returns on investment, market experts suggest the project is financially sound. Demand for energy-efficient and ESG-certified buildings continues to grow, offering a premium on both sale and lease prices.
In Sweden, green-certified properties typically sell for 12–15% more than conventional buildings. These developments also attract high-quality tenants, including global brands and flexible workspace providers.
Conclusion
The Söderhallarna redevelopment, backed by a €79.5 million climate loan, exemplifies sustainable urban planning and responsible real estate investment. The project not only revives a central Stockholm landmark but also illustrates how environmental stewardship can align with economic gain.
Amid tightening environmental regulations and rising interest in green investments, Söderhallarna stands as a benchmark for future redevelopment projects across Europe.
