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(Read more on the multifamily market.)

OSLO-International construction firm Skanska has reached an agreement with Norwegian residential development company Fornebu Boligspar to construct a new residential community on the outskirts of the capital city for $69 million. Construction on the seven-building, 280,000-sf complex is slated to begin in March.

The complex will comprise 158 apartments in four-story and five-story buildings. It will also include enclosed courtyards and underground parking. Skanska expects to complete the project by 2010.

Skanska has a long-term cooperation agreement for the continued expansion of housing on the closed Fornebu airport. Fully developed, the new housing area is planned to comprise about 4,800 apartments. Skanska has also been involved in the development process for Fornebu for a number of years.

The Fornebu Airport closed in 1998. A peninsula, Fornebu is located in the suburb of Baernum, which borders western Oslo. Since the airport was shuttered, the site is being redeveloped with residences, retail, and a technology park. The communications company Telenor is headquartered in Fornebu.

The strength of the Norwegian office market was recently highlighted in the NAI Global Issues 2008 Global Market Report. Property markets across Europe have been strong, the report noted. And rental increases in Oslo have increased some 65%.

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