Military to Market: Adaptive Reuse of Defence Infrastructure in Norway

Former defence sites offer developers and investors access to well-located properties with strong redevelopment potential and unique infrastructure in a stable and transparent market. One notable example is the transformation of a former NATO ammunition storage facility inside a mountain in Rennesøy, western Norway, where the mountain halls have been converted into one of the world’s most energy-efficient data centres. Projects like the Rennesøy data centre in Norway highlight both the opportunities and the complexities associated with adaptive reuse in this sector.

Successfully transforming these sites depend on thorough legal due diligence, effective stakeholder engagement, and a clear focus on environmental and regulatory requirements. With careful planning and execution, adaptive reuse of defence real estate and infrastructure can generate significant value and unique market opportunities.

 

Market context

Real estate relating to Norway’s defence sector is governed, managed and maintained by Forsvarsbygg, a directorate under the Norwegian Ministry of Defence. As the largest public property manager in the country, Forsvarsbygg oversees a portfolio of roughly 13,000 properties, buildings and structures distributed nationwide.

According to Forsvarsbygg’s 2024 Annual Report, 3.2 million m² of “inefficient” or outdated property have been sold since 2001.¹ Proceeds from the sale of surplus assets have enabled the defence sector to reallocate around NOK6.6 billion,² reinforcing operational capabilities and supporting reinvestment in core infrastructure.

Despite increased government budget allocations for property development and maintenance, the Norwegian Armed Forces continue to identify and release assets that are considered redundant or too costly to maintain, often due to substantial repair backlogs.

For developers and investors looking to enter the Norwegian market, these releases offer opportunities to access well-located sites with strong fundamentals, specialized infrastructure and significant redevelopment potential.

The transition from defence to civilian use provides more than just financial returns. It enables sustainable urban and rural regeneration, the deployment of technology and socio-economic development.

 

The Rennesøy data centre transformation

The Rennesøy data centre in Stavanger, western Norway, is an example of adaptive reuse of defence infrastructure. A former NATO ammunition storage facility inside a mountain has been converted into a Tier III certified mountain hall data centre. This project illustrates the innovative potential in this asset class.

After NATO vacated the site in 1997, ownership passed to the municipality through its statutory pre-emptive right. An initial attempt to attract a major international research institute was unsuccessful, and the municipality later entered into a long-term lease with Green Mountain AS, a specialist data centre operator. Commercial data centre activities began in 2013.

The transformation required careful planning and compliance with statutory procedures. Since the site was originally zoned exclusively for military use, the municipality initiated a formal rezoning process and worked with specialist consultants to prepare a comprehensive impact assessment. Key considerations included environmental and habitat protection, evaluation of landslide and geotechnical risks, landscape and visual impact, and adjustments to building plans to avoid affecting protected species or habitats.

Today, the data centre has six halls with integrated concrete structures. Its location within the mountain provides strong protection for critical systems.

The facility uses seawater from the fjord as a natural cooling source, drawing cold water from a depth of 100 m into the data centre heat exchangers. This water cools a closed technical circuit, enabling the server halls to operate with minimal electricity consumption for cooling. Compared to conventional air-based cooling systems, this solution uses significantly less energy, improves operational stability and provides greater capacity to manage large server loads without the risk of overheating.

The naturally low temperature of the mountain rock ensures stable and cold ambient conditions throughout the year, regardless of external weather or seasonal variations. This further reduces the need for active cooling, supports reliable operations and enhances the security of critical infrastructure by providing natural protection against weather, temperature fluctuations and external risk factors. The combination of low outside temperatures, underground cooling, and seawater cooling makes it possible to manage the heat load from the servers with very low energy losses.

 

Lessons for developers and investors

Accessing former defence infrastructure

Transforming former defence infrastructure can be accomplished through both direct acquisition and long-term leasing arrangements.

Municipalities and county authorities in Norway are typically granted a statutory pre-emptive right to acquire surplus defence properties before the assets are offered on the open market. As exemplified by the Green Mountain data centre at Rennesøy, this mechanism enables local authorities to buy former defence sites for redevelopment. The disposal of government-owned properties is governed by the Sale and Disposal Policy (Avhendingsinstruksen), which sets out requirements for how assets are marketed, sold and transferred, with emphasis on transparency, fair competition and public benefit.

A central element of this regime is the requirement to avoid unlawful state aid. In line with Article 61 of the EEA Agreement and corresponding Norwegian legislation, transactions must not confer a financial advantage to private buyers at below-market pricing, as this may constitute incompatible public aid. Accordingly, public assets must be sold at or above independently verified market value.

While ownership transfer is often the focus in discussions about defence asset disposal, the Green Mountain data centre at Rennesøy exemplifies how reusing former defence infrastructure can also be achieved through long-term leasing models. This approach allows the municipality to retain strategic control over the site and receive ongoing rental income, while enabling private investors and operators to realize the commercial and innovation potential of the facility and connected infrastructure.

Regulatory and zoning regimes

Once developers or investors have secured rights to the defence infrastructure, the next step is to initiate the necessary processes to enable new development or transformation of the site.

This will typically require engagement with local regulatory frameworks to ensure the site is legally prepared for its future intended use.

One of the principal challenges in repurposing defence infrastructure is alignment with municipal zoning and land-use plans. The planning status of former defence sites is often classified for “military,” “public purpose,” or other special-use categories, precluding immediate adaptation to residential, industrial or mixed commercial applications.

Rezoning proposals need to go through a formal administrative process involving notification and engagement with affected stakeholders, environmental and land-use impact assessments and political approval at municipal and, where relevant, regional levels.

Environmental due diligence

Another consideration is the legacy of contamination stemming from historic defence operations, such as underground storage, fuel and chemical handling, vehicle maintenance, or residual ammunition. Typical pollutants include heavy metals, petroleum hydrocarbons and organic hazardous substances.

If there’s reason to believe the area is contaminated, the developer has to carry out investigations. Alternatively, documentation proving that the property isn’t contaminated has to be submitted to the municipality, which will assess whether the documentation is sufficient.

Failure to address environmental risks appropriately can lead to regulatory enforcement, liabilities for clean-up and reputational damage.

Heritage and cultural protection

A subset of former defence sites is protected for their cultural, historical or architectural value. These designations sharply restrict adaptation, requiring exemptions or variances for the installation of modern safety, accessibility or technical systems.

Engagement with heritage authorities, such as Norwegian Directorate for Cultural Heritage is advised in early planning stages. Registry checks via the national Cultural Heritage Search ensure compliance and project viability, supporting smooth integration of contemporary usage within a protected context.

 

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¹ Forsvarsbygg årsrapport 2024 s. 12
² Forsvarsbygg årsrapport 2024 s. 12