Oslo-based apartment developer Leilighetsexperten As (Lex) has filed for bankruptcy following a failed restructuring attempt, . The company cited rising costs and declining sales as key factors contributing to its financial difficulties, according to a notice in the Brønnøysundregistrene, Norway’s official business registry.
The bankruptcy marks the latest in a series of failures within the Norwegian construction sector, reflecting broader economic pressures impacting the industry. Bostyrer (bankruptcy administrator) Andreas S. Christensen confirmed the situation, stating that reconstruction efforts in December proved unsuccessful, leading to the unavoidable decision to declare bankruptcy.
Established in as a subsidiary of Witor/Witor Entreprenør, Lex specialized in the completion of apartment projects ranging from 10 to 50 units in the Østlandet region of Norway. The company’s approach focused on standardization and efficiency through digitized processes, utilizing fixed suppliers and streamlined procedures for projects from initial bids to one-year inspections. Witor’s website highlights this standardized approach as a core competency.
While the company experienced significant growth, peaking at a turnover of 206 million Norwegian kroner in , its financial performance deteriorated sharply in . Turnover more than halved to 95 million kroner, with operating losses reaching 43 million kroner and a pre-tax loss exceeding 31 million kroner, according to data from Proff.no.
Christensen indicated that outstanding claims currently amount to approximately 40 million kroner, a figure that may change as the bankruptcy proceedings unfold. A significant portion of the debt is owed to the company’s primary creditor, a construction loan bank.
The company employed as many as 10 people at its peak, but that number had been reduced to half by the time of the bankruptcy filing. Lex was in the process of completing an exclusive apartment project in Grefsenåsen, Oslo, consisting of nine large apartments with panoramic views. Christensen stated that this project is not directly affected by the bankruptcy and is expected to be finished.
The failure of Leilighetsexperten is not an isolated incident. The Norwegian construction industry is facing a widespread downturn, with a growing number of companies filing for bankruptcy. This trend is attributed to a combination of factors, including high interest rates, increased construction costs, and reduced demand for new housing.
Frank Pedersen, regional manager at the Norwegian Construction Industry Association (Byggmesterforbundet), emphasized the severity of the situation. “For many construction companies, it’s no longer about growth or development, but simply about survival,” he stated in a press release.
The broader economic context, as reported by E24, reveals a pattern of bankruptcies across the building and supply chain sectors. The building materials industry is also experiencing a prolonged crisis, and builders are struggling to turn a profit. Lars Jacob Hiim, CEO of Boligprodusentenes Forening (the Association of Housing Developers), noted in the autumn that “the profit has been eaten up” by rising costs.
The current challenges facing the Norwegian housing market are compounded by a supply shortage. While housing prices have seen growth, driven in part by policy changes such as a reduction in the mortgage equity requirement from 15% to 10%, the lack of new construction is exacerbating the imbalance between supply and demand. Recent reports indicate a 7.3% increase in housing prices over the past year, with a 4.4% rise in January alone, according to Living Impact.
Norges Bank’s Financial Stability Report from highlighted the increasing number of bankruptcies among Norwegian firms, particularly those in the real estate development sector. The report attributed this trend to higher interest rates, high construction costs, lower residential construction activity, and sluggish new home sales.
The situation underscores the vulnerability of the construction sector to macroeconomic factors and the importance of addressing the underlying issues of cost control, supply chain resilience, and housing affordability in Norway.
