Others are also hurting. A Brand New World, a maker of equipment such as antennas for phones, slashed half of its staff to trim costs amid tumbling demand. Some have become targets of larger rivals. Cisco Systems Inc and ADC Telecommunications Inc last year paid a combined US$1.6 billion for two Kista-based equipment makers, Altitun AB and Qeyton Systems AB.
The fallout affects the entire complex. Occupancy at the Memory and Chip Hotels, wedged between Ericsson and Sun Microsystems operations, have dipped 5 percentage points to 59 percent from 64 percent last year, said Ernst Wallerstroem, who operates the two hotels with his wife.
IBIS Stockholm Foerlag, which publishes Kista's monthly newspaper Competence, has cut jobs as recruitment advertising dried up. Sales at the nearby Saab dealership, the world's largest, are dropping, partly because Ericsson, its largest single customer, is trimming spending on company cars.
With demand slumping, rents have tumbled faster than in the Stockholm city center, and the vacancy rate has climbed to 5 percent. That will probably double next year, according to Per Berggren, head of the commercial property wing of Drott AB, Ericsson's landlord in the area and Kista's biggest property owner.
"New business from telecoms companies just isn't there anymore," said Berggren. "Next year is going to be tough." Kista rents probably will fall another 15 percent this year, according to CB Richard Ellis. Yet even against this backdrop, companies such as NCC AB, the No. 2 Swedish builder, are pressing ahead with plans to add more space.
NCC, together with closely held Vasakronan AB, is due to open a 32-floor, 42,000m2 Science Tower within 18 months.
Just 10 percent of the half-finished Tower has been leased out, according to Vasakronan spokesman Bengt Moller.
None of the 35,000㎡ in Vasakronan's other new project, Kista Entre, has been pre-let.
Still, that's good news for at least one Kista company.
Magnus Oestberg, the editor of Competence, plans to beef up his newspaper early next year. "Property companies are spending more with us to try to fill their empty spaces," Oestberg said.
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