The market back on track: Solid Danish economy and falling interest rates pave the way
10 years of expectations: From cautious idea to the industry’s largest and most comprehensive survey
The ESG and sustainability requirements for our business partners must grow
Velliv
International Poul Erik Bech
CONTACT
EDC Poul Erik Bech
Zealand/Funen
Copenhagen +45 5858 8378
Herlev +45 5858 8376
Taastrup +45 5858 8472
Hillerød +45 5858 8377
Roskilde +45 5858 8395
Køge +45 5858 8379
Næstved +45 5858 8380
Slagelse +45 5858 8396
Odense +45 5858 8397
Jutland
Kolding +45 5858 8399
Aabenraa +45 5858 8425
Sønderborg +45 5858 8422
Esbjerg +45 5858 8398
Vejle +45 5858 8423
Aarhus +45 5858 8670
Silkeborg +45 5858 8427
Herning +45 5858 8567
Viborg +45 5858 8424
Aalborg +45 5858 8449
Vendsyssel +45 5858 8487
International +45 5858 8563
Research +45 5858 8564
Agriculture East +45 5858 8574
Agriculture West +45 5858 8683
Project +45 5858 8487
Capital Markets +45 5858 8572
Velliv: The ESG and sustainability requirements for our business partners must grow
10 years of expectations for the real estate market: From cautious idea to the industry’s largest and most comprehensive survey
The Market Back on Track: Solid Danish Economy and Falling Interest Rates Pave the Way
Public offering of Agroskolen in Hammerum in Herning Municipality From agricultural school to modern residential area
The letting of 107 rental apartments at Munkeengen is well underway
Rising tourism and growing demand is creating a promising future for hotels
The rental of almost 200 apartments in Carlsberg Byen begins
Residential rental projects
JLL Nordic Outlook: ESG and sustainability are changing the dynamics of the real estate industry
For sale/sold
Market Update Q3, 2024
Our Expectations Survey celebrates
its 10-year anniversary
YEARS
Dear reader,
The second edition of this year’s Market Insight has been released – available, as always, in both Danish and English. In the magazine, we focus on current trends and the biggest cases in the commercial real estate market. In the middle of the publication, you will find the latest Market Update, where you can track the economic progress and key figures within the real estate sector.
For the 10th consecutive year, we have conducted our comprehensive Expectation Survey. What began as an idea on paper has fortunately proven to stand the test of time, as we now proudly hold the industry’s largest and most extensive survey a decade later. In this edition, we look back over the past 10 years and compare previous responses with the findings from our latest survey.
For the past few years, the results of the Expectations Survey have been presented in front of 300 people from the industry, and this year is no exception. On 27 November 2024, we invite you to Industriens Hus, where we will reveal the survey results and share expectations for
the coming year. Additionally, we have once again invited several industry leaders to discuss how they see the market evolving. One of them is Real Estate Director at Velliv, Solveig Rannje, who will speak about working with ESG and sustainability.
In the magazine you can also read more about our collaboration with one of the world’s largest real estate companies, JLL (Jones Long LaSalle), where we contribute Danish market data to the Nordic Outlook, which is published twice a year. JLL has also released a report on the hotel real estate market, an area where we see growing interest. In response, we have established a nationwide hotel group to ensure a more structured advisory and sales process within hotels, inns, and other accommodations.
Enjoy your reading!
Kind regards,
Poul Erik Bech
Velliv:
“The ESG and sustainability requirements for our business partners must grow”
Solveig Rannje, Real Estate Director at Velliv
Solveig Rannje, Real Estate Director at Velliv, is one of the speakers at EDC Poul Erik Bech’s annual Expectations Seminar the 27th of November 2024 at Industriens Hus. The results of our annual Expectation Analysis will be published for the 10th year in a row. Solveig Rannje explains, among other things, that Velliv has ESG and sustainability as a guiding principle in all of their work, and they have also started gaining an overview of and setting requirements for their suppliers and business partners.
”As one of Denmark’s largest pension companies, we have a social responsibility that we must live up to. That is why ESG, and sustainability are the foundation of everything we do and a key part of our strategy to create a robust and future-proof property portfolio with attractive long-term returns,” says Solveig Rannje, Real Estate Director at Velliv, Pension & Forsikring, which is a pension and insurance company with around 420,000 customers. It is 100% customer-owned and has a property portfolio valued at approximately 20 billion DKK.
Solveig Rannje has more than 30 years of experience in the real estate industry and originally trained as a legal secretary. She is also a certified real estate agent and holds a law degree (cand.jur.) from the University of Copenhagen. She has served as Deputy Director at PFA Ejendomme, Real Estate Director at Proark, Managing Director at Rosk Ejendomme/FS Ejendomsselskab under Finansiel Stabilitet, Real Estate Director at SEB Pension, and Partner/Real Estate Director at Thylander Gruppen.
“
Fighting loneliness
Overall, Velliv has approximately 75% of its assets within office/warehouse/logistics, while dwelling accounts for the remaining approximately 25%. ”In 2019, we had a property portfolio of 275 wholly and partly owned properties and today we are down to 225. Our expectation is that the number will decrease further. We have come a long way, but the current transaction market with lower transaction levels and thus low liquidity can be challenging - not least in relation to our desire to eventually reallocate the property portfolio to match our strategy for property investments. So, we have not come as far as we had hoped, but we are noticing increased activity in our sales and that the transaction market is slowly improving,” says Solveig Rannje.
ESG, and sustainability are the foundation of everything we do and a key part of our strategy “
”When I joined Velliv in 2019, we developed a strategy to bring the management of our wholly owned properties in-house. We went from 2-3 employees to at present having a team of 18 employees with expertise in investment, development, asset management, law, and ESG. We are in the process of repositioning our property portfolio and selling off small, medium-sized, and non-future-proof properties, including those in secondary locations and sectors we aim to reduce our allocation to. Ideally, we prefer not to own properties valued at less than 100 million DKK, and we are particularly focused on investing in larger, modern residential and logistics properties.”
Divestments mean that, among others, EDC Poul Erik Bech is continuously facilitating the sale of investment properties on behalf of Velliv, primarily in larger Danish provincial cities.
”Generally, we do not want to increase volume, but we are very eager to expand our new residential community concept, ’Naboliv,’ where we aim to connect generations within a community while providing an attractive, risk-adjusted return to our pension customers. We also hope to contribute to an important societal agenda by creating well-being among residents and fighting loneliness. Our first project is in Birkerød, featuring 110 rental apartments, which will be completed in 2025. It is our first project that complies with the ESG requirements of the EU taxonomy, and we are developing this project in collaboration with Nordstern. We want to invest in residential properties where we can implement our community concept, but the current transaction market makes it challenging to execute our strategy.”
ESG goals are a priority
In 2023, Velliv set new, ambitious goals for sustainability in the property portfolio leading up to 2030. The goals focus on seven key areas: CO2e-reduction, sustainable certification, active ownership, data, circular economy, biodiversity, and social sustainability.
Solveig Rannje says: ”ESG and sustainability are the foundation of everything we do at Velliv. We work hard every day to meet our established goals for our property portfolio (read more in the box, ed.). The ambition is to reduce CO2e emissions from both wholly and partly owned properties by 80% CO2e/m2 in 2030, relative to the 2019 level. So far, in 2024, we have reduced our CO2e emissions by 59% since 2019. At the same time, we have a goal for our portfolio to be CO2e-neutral by 2040. This is a huge priority for us – and it’s a task that never ends.”
ESG requirements for suppliers
As a supplier and partner, EDC Poul Erik Bech has received approximately 20 ESG and sustainability-related questions that Velliv wants answered. Solveig Rannje explains: “As mentioned, we are aware of our role and responsibility, and we want to guide the real estate industry in the right direction. Therefore, we have also started to gain an overview
of the ESG efforts and goals of our largest partners. So far, we have asked 10 of our primary partners, and initially, we want a better understanding of where we stand in the industry.”
”Based on this, we will get an overview and, in the long term, help to push for change. So far, the feedback has been positive, and it is definitely a good dialogue tool that triggers a lot of thoughts for us and hopefully also our suppliers. The idea is that this is something even more of our suppliers should respond to, probably once a year, so we can see how progress is being made, and our requirements for our suppliers will become more strict along the way. It’s about collaboration because one thing is certain; we cannot achieve much on our own. ESG and sustainability need to be integrated throughout the entire chain of value, and we want to contribute to expanding this work within the real estate industry.”
Sign up for our Expectations Seminar
Expectations Seminar 2025
Wednesday 27th November in Industriens Hus ›
Sign up for EDC Poul Erik Bech’s annual Expectations Seminar on 27 November 2024 at Industriens Hus at Dansk Industri in Copenhagen, where we will publish the results of our comprehensive Expectations Analysis of the commercial real estate market, which we have conducted for the 10th year in a row.
You can for example hear a presentation by Solveig Rannje, Director of Property at Velliv.
Read more at edc.dk/forventninger2025
Velliv’s overall approach to ESG and sustainability
1. CO2 reduction: This includes an 80% reduction of the Velliv portfolio by 2030 in scope 1 & 2 and raising 80% of all energy ratings to C or better by the end of 2025.
2. Certification (DGNB/Taxonomy): 50% of the Velliv portfolio will contribute to EU taxonomy alignment by 2030, and all new construction will be at least DGNB or taxonomy certified.
3. Active ownership: Influencing our co-owned investments to contribute to the overall goals.
4. Data: Ensuring that the Velliv portfolio provides energy data and that we can deliver it to tenants.
5. Circular economy: The majority of Velliv’s renovations must follow circular principles, and there should be a general focus on reducing Velliv’s CO2 emissions from construction.
6. Biodiversity: Developing a program and goals to incorporate biodiversity into the management of Velliv’s investment properties.
7. Social sustainability: Developing a housing community concept for the benefit of its residents and Velliv’s customers, as well as increasingly integrating social sustainability into the management of investment properties.
Source: Velliv
10 years of expectations for the real estate market: From cautious idea to the industry’s largest and most
comprehensive survey
What began as an idea on a piece of paper 10 years ago has evolved into the largest and most comprehensive survey in the property industry. Each year, the Expectations Survey has grown, and today, many real estate investors and businesses use the survey as a benchmark for future trends.
EDC Poul Erik Bech’s Expectations Survey is celebrating its 10th anniversary this year. The survey offers insights into the expected development of the real estate market for the upcoming year.
Poul Erik Bech says: ”It started with the ambition to measure the market temperature for both ourselves and our clients. We wanted to provide insight into the expectations of industry players for the coming year. The survey attracts significant attention from clients and partners, and its durability is shown by the fact that many of the questions from the first years are still recurring.”
ANNIVERSARY OUTLOOK YEARS 10
”The initial idea and approach remain relevant, and we look forward to welcoming 300 clients and business associates to the Expectations Seminar at Industriens Hus on November 27, 2024. As in previous years, we have invited prominent figures from the industry, with this year’s theme focusing on ESG and sustainability, alongside the presentation of the survey results.”
Sign up for EDC Poul Erik Bech’s annual Expectations Seminar at edc.dk/forventninger2025
Do you plan to use more/less money on property investments in the coming year?
Growing year by year
More and more customers are continuously participating in the survey - and this nearly 1,800 respondents participated in the survey. The survey framework has been gradually adjusted; for example, questions about ESG and sustainability were added four years ago, as it is an important topic in the industry.
Joseph Alberti, Head of Research at EDC Poul Erik Bech, says: ” The expectations for 2025 are that the market will pick up again after a couple of slower years. In 2017-2022, about half of the respondents said they would spend more money on property investments in the coming year, but that number dropped drastically to just under a quarter in 2023 with a small recovery in 2024. We have just received the responses for 2025, and more than half of the respondents said they plan to spend more money, which is a good indica-
tion that the market is heading towards the same level as in 2017-2022.”
”The expectation of low investment appetite in 2023 and partially in 2024 is, of course, connected to the high-interest rate level, which the majority of respondents rightly pointed to in both the Expectations for 2022 and 2023 surveys. This is likely because long-term interest rates had already started to rise in 2021 after a period of gradual decline with minor fluctuations since the financial crisis in 2008. 87% expect interest rates to decrease in the coming year, which is also an indicator that the market is moving in the right direction,” says Joseph Alberti.
More prefer owning over renting
In the 10 years the survey has been conducted, there have naturally been changes in respondents’ answers. One area
What are your expectations for the development of interest rates in the coming year?
Expectations 2025: The industry’s largest survey
For the tenth time since 2015, EDC Poul Erik Bech has mapped out the expectations of investors and businesses regarding the Danish property market. With responses from nearly 1,800 decision-makers, the Expectations Survey remains the most comprehensive market survey on commercial real estate in Denmark.
Read the 2025 Expectations Survey at www.forventninger2025.dk
where there has been a notable shift is in the number of people considering buying property instead of leasing. About the development, Joseph Alberti says:
”Over the past 10 years, we’ve seen a significant increase in the percentage of respondents who are considering buying their own premises rather than renting. In 2016, only 15% were considering buying instead of renting, whereas that number stands at 56% today. However, it peaked in the 2022 expectations survey, where as many as 69% were considering buying over renting. The slight decline since
Would you consider buying something instead of renting?
2022 is likely due to the high interest rates we’ve seen since then.”
”The reason why more investors and companies are considering buying instead of renting can likely be attributed to the strong Danish economy, which has ’survived’ the fears of downturn and recession and instead appears to be moving forward with optimism, positive growth ratesprimarily driven by Novo Nordisk - and record-high employment. This means investors and businesses have more cash on hand and want to join the trend by owning the premises they use rather than leasing them.”
The
market back on track:
Solid Danish economy and falling interest rates pave the way
Throughout the latter half of 2022, all of 2023, and the first half of 2024, the real estate market has faced challenges, with a frequent disconnect between buyers and sellers. However, it now appears that the market is heading toward brighter times. This is primarily due to a strong Danish business sector, resulting in a solid Danish economy, as well as a declining interest rate level.
The Danish economy, overall, is remarkably strong and has avoided the feared downturn and recession that seemed looming. The business sector, in particular, is robust, with record-high employment levels continuing to grow and stable inflation around the target of 2%. Therefore, there is reason for optimism, says Joseph Alberti, Head of Research
industry, while the rest of the business community is also showing positive signs. Denmark’s GDP is expected to increase over the next few years by 2.3% in 2025 and 1.5% in 2026, so there is plenty of reasons for optimism regarding the Danish economy and hopefully, this optimism will positively impact the real estate market.”
Stability in the Danish market
Although there are signs of improvement in the transaction market, the market is still adjusting. Denmark has taken a steadier approach than other European countries, and according to Joseph Alberti, the adjustment is ongoing, making it interesting to see how it unfolds:
”Although there are signs of improvement, and it seems we are moving towards brighter times, the adjustment to the new interest rate level is still underway. We cannot expect interest rates to drop back to pre-crisis levels, therefore it is about finding a satisfactory equilibrium in Denmark, we typically use a more long-term approach to financing than other European countries, meaning that the rate of return have not increased in line with interest rates, which has been challenging.”
“In Denmark, long-term financing is common, whereas in countries like Sweden, short-term financing options are prevalent. This has meant that the adjustment has happened somewhat faster for our Swedish neighbors than in Denmark. However, looking at the current development, it may very well be that the Danish market has adapted at a sensible pace compared to other countries that adjusted too quickly and too drastically. The higher proportion of long-term financing has led to far greater stability in the Danish real estate market,” says Joseph Alberti.
A major transaction drives the market
The transaction volume for the third quarter of 2024 ended at DKK 9.6 billion, which is mainly due to September, when the transaction volume ended at DKK 6.2 billion. However, this was mainly driven by a single major transaction, explains Joseph Alberti:
”The transaction volume in September 2024 has increased significantly compared to the previous two months of the third quarter, but it is slightly misleading. The high transaction volume is mainly due to a large transaction, explaining why the industrial and logistics segment accounted for nearly 57% of the transactions. At the end of September, DSV sold their newly built logistics center in Horsens for DKK 3.3 billion, so when there is not a larger volume of transactions, a large transaction like this naturally stands out.”
”This is not to say that we are not on the right track. The transaction volume is at a reasonable level and year-to-date the transaction volume is 5% higher than last year, so the market is back on track. Additionally, we must remember that transaction volume alone is not the only measure of the market’s performance. The overall state of the business sector also greatly impacts the movements in the real estate market. Here, we conclude that Danish business and economy are in a strong position, and the real estate market appears to be back on track after a couple of challenging years. Therefore, we also expect that the transaction volume for the year will exceed last year,” concludes Joseph Alberti.
Transaction volume
Research & Analysis
The Research & Analysis department at EDC Poul Erik Bech prepares customized analyses for large institutional investors as well as private investors. We have conducted assignments for clients such as PFA, PensionDanmark, PenSam, Coop, COPI Group, and Salling Group, including due diligence analyses on the buyer’s investigation of the seller’s properties prior to completion of the transaction. The assignments such as:
• Commercial due diligence
• All relevant aspects of project development and the purchase and operation of reversionary investment and owner occupied properties
• Analyses for e.g. lawyers who need data for a housing court case
• Analyses of rental values and realised market prices
• Analyses of the relationship between supply and demand in major cities as well as smaller provincial towns
• Analyses of housing stock development by ownership in subjective, specific, defined geographical areas
More information
Joseph Alberti, Head of Research
EDC Poul Erik Bech +45 5858 8564 • joal@edc.dk
Transaction volume YTD
Expectations Seminar 2025
Wednesday 27th November
in Industriens Hus ›
How will the commercial real estate market develop in 2025? What impact will interest rates, inflation, and sustainability have? And what does the market look like in Denmark, the Nordic Region, and Europe?
Join us for our major expectations seminar, where we present the key conclusions from our 10th Expectations Report, based on insights from nearly 1,800 industry stakeholders. Get exclusive perspectives on ESG from six market leaders and stay updated on the economic outlook for 2025.
The day is also an excellent opportunity to network with other stakeholders and strengthen relationships within the industry.
27th November at 9.00 AM – 12.00 AM Industriens Hus, H. C. Andersens Blvd. 18, 1553 Copenhagen V
We provide breakfast from 8:00 AM
Secure your spot - sign up today! There are a limited number of seats, granted on a first-come, first-served principle.
Will we see you there?
Sign up here or at edc.dk/forventninger2025
Poul Erik Bech EDC Poul Erik Bech Gemma Kendall JLL
Joseph Alberti EDC Poul Erik Bech
Andreas Just Karberg Karberghus
Thomas Persson JLL Mark Gibson Realkredit Denmark
Solveig Rannje Velliv
Jakob Dybdal COWI
Lars Thylander Thylander Gruppen
Mads B. Lauritzen
Helene Toxværd
More information
Terkel Præst Berthelsen, Partner
EDC Poul Erik Bech Herning Tlf.: +45 5858 8567 • tpb@edc.dk
Michael Fænø, Partner
EDC Poul Erik Bech Herning Tlf.: +45 5858 8567 • mfa@edc.dk
Tonny Broberg, Project Manager
EDC Project Poul Erik Bech Vest Tlf.: +45 5858 8487 • tobr@edc.dk
Public offering of Agroskolen in Hammerum in Herning Municipality:
From agricultural school to modern residential area
Agroskolen in Hammerum is up for sale through public offering. This distinctive property in Herning Municipality has been an essential part of the local community since 1928. EDC Poul Erik Bech will handle the sale of the agricultural school, which is being sold through a public offering and where the local plan from 2023 allows the construction of townhouses around the original part of the property.
In 2018, Agroskolen in Hammerum merged with Herningsholm Erhvervsskole & Gymnasier and expanded with a wide range of programs and facilities for students. Agroskolen is moving even closer to the school’s other programs in brand new premises in Herningsholm’s campus area on Lillelundvej. This is the first time in 37 years that a new agricultural school is being built in Denmark.
Allan Andreasen Kortnum, Director, Herningsholm Erhvervsskole & Gymnasier, says: ”We want to be a school with relevance to the local business community, where agriculture plays a central role. The time is right to build the agricultural school of the future, providing optimal opportunities for agriculture throughout Central and Western Jutland. The school is designed to promote agricultural skills, but also to be a modern community center with activities such as communal dinners, association events, and lectures. The school will be part of the campus, where students can engage in communities with the other programs.”
”It also means saying goodbye to Agroskolen i Hammerum at Hammerum Hovedgade 7, which has housed the agricultural school since 1928 and stands as a symbol of the local community’s dedication to the agricultural profession. Now, a new and exciting chapter awaits both us and the property. We look forward to following the development and what happens to our ’home’ of many years.”
Ideal location for housing
In recent years, Herning has experienced growth in both population and workplaces. According to the municipality’s forecast, this will continue until 2033. Terkel Præst Berthelsen, partner at EDC Poul Erik Bech Herning, says: ”Herning
has focused on being an attractive business municipality that has attracted a workforce for many years, which has had an impact on the housing situation. In recent years, we have helped facilitate the development of townhouses and apartments, both for owner-occupied, rental and investment properties. The demographics in Herning make Agroskolen an attractive place to develop both apartments and/or townhouses.”
Michael Fanø, partner in EDC Poul Erik Bech Herning, says: ”The property is zoned for residential development and is attractively located in Hammerum, close to nature, shopping, schools, and just a few minutes from the highway. Therefore, housing can be developed that will appeal to all conceivable target groups. The local plan contains a theoretical 17,805 m² building rights, which can be utilized either by constructing new buildings or a combination of new construction and renovation.”
Experience with public offerings
Tonny Broberg, Project Manager, EDC Project Poul Erik Bech, says: ” We have previously sold Hammerum school through a public offering. The elementary school is now a senior co-housing community with 24 apartments and 20 townhouses, which we sold to a Danish investor after construction. Schools offer many good square meters where aula, sport halls, classrooms and offices can become great common areas for housing/offices. It is attractive for many developers to convert secondary spaces for community purposes, without paying full price for new construction.”
”We are familiar with the processes involved in the offering and sale of properties and have a good insight into which developers and investors may be interested in buying a school and converting it into modern housing. We look forward to assisting in the sale of the distinctive agricultural school. We do not want to get involved in the final outcome, but we are available to potential buyers who want information about the property, the area and the demographic development in Herning and the surrounding area in relation to housing types, room distribution, etc.” says Tonny Broberg.
www.ejendomsnyheder.dk
The letting of 107 rental apartments at Munkeengen is well underway
The construction of the 12,560 m²-large Munkeengen residential development in Hillerød is well underway. The developer Vision Ejendomme has chosen EDC Project Poul Erik Bech to be responsible for the letting of the 107 rental apartments of 1-5 rooms between 34-144 m2. The rental has gotten off to a really good start and the apartments will have beautiful views over Hillerød, with a view to Frederiksborg Castle from the two shared roof terraces. They will be certified in DGNB Gold and will be ready for occupation in February 2025.
The large housing project Munkeengen on Slangerupgade in Hillerød is progressing rapidly. The developer is Vision Ejendomme, the turnkey contractor Nordstern, the architect C.F. Møller Architects, the engineer Niras and EDC Projekt Poul Erik Bech have been chosen to handle the letting of the apartments.
Jens Bolding Jensen, CEO of Vision Ejendomme, says: ”We are proud of the project and are very much looking forward to the construction being completed and the buildings coming to life with a lot of happy residents. There will be different sizes of apartments varying from 1-5 rooms between 34-144 m2. The project is located in one of Hillerød’s most sought-after areas and is being built for many different residents including singles, couples and families of all age groups. The newly built rental apartments are of high quality with a DGNB Gold certification.”
”There will be room for diversity and there will be a lovely, enclosed courtyard where you can send your children down while you prepare dinner or enjoy breakfast on the balcony, so they can play undisturbed and in a safe environment. Almost all residents will also have either a bay window, balcony and/or garden, and there is an enclosed car park and bike basement for residents in the building itself, so you can just take the lift to your apartment. There are two large, roof terraces with beautiful views of Frederiksborg Castle in the horizon. At the same time, the courtyard and roof terraces invite a strong sense of community. It is a project we are really proud of.”
The project takes shape
The apartments are created with a vision of welcoming nature into your everyday life. All the apartments are equipped with floor-to-ceiling windows which let in light and provide a beautiful view of the surroundings. Julie Hundborg Dresler, Head of Asset Management, Vision Ejendomme, says:
More information
Thomas Høeg Mogensen
Customer & Relationship Director, EDC Project Poul Erik Bech • thm@edc.dk • +45 5858 8487 Read
”We have come a long way with the project, which is really starting to take shape. It is our first project in Hillerød, but we had no doubt about investing in the project, as it has a good location in Hillerød, which is a beautiful, exciting and growing city. It is also close to beautiful nature, educational institutions, Slotsarkaderne, grocery shopping and generally all the town’s opportunities and everyday needs, so there is something for everyone.”
”The property is created with a ’green heart’, and has a large, shared courtyard on the first floor. It is raised from street level and thereby becomes a private and safe environment for the residents, as it can only be accessed through the property’s stairways and apartments. The courtyard will have green environments, path systems and small courtyards belonging to the apartments on the first floor. The ’green heart’ will be a focal point for the residents and provide opportunities for community, and we look forward to welcoming the future residents.”
Expecting high demand
Christoffer Kielgast, Project Manager, EDC Project Poul Erik Bech, who will be handling the letting, says: ”It is a really exciting project that has now come so far that we finished the trial-apartments for viewing and approx. 30% are already rented out. Rental prices start at approximately DKK 7,500 per month, and we look forward to welcoming the new residents in February 2025.”
”We are hosting an open house every Sunday from 10:30 to 11:30 until we have finished the letting. We expect a great demand for the nice apartments, as it is a really nice and complete project that has many different apartment types and sizes. We are very pleased that Vision Ejendomme has shown us the confidence and chosen us for the rental assignment, and we look forward to working together, and make it a successful project where the residents are happy to live.”
Christoffer Kielgast
Project Manager, EDC Project Poul Erik Bech
chki@edc.dk • +45 5858 8487
Rising tourism and growing demand is creating a promising future for hotels
Despite economic challenges in 2023, including rising interest rates and geopolitical tensions, the global hotel industry has proven to be in a solid place, with hopes for an even brighter future. This is according to the Global Hotel Investment Outlook 2024, a report on trends and expectations for the global hotel market. The report is published by JLL, one of the world’s largest brokerage firms and EDC Poul Erik Bech’s international partner.
The global hotel industry has managed to overcome the crises of recent years. RevPAR (Revenue per Available or revenue per available room, (calculated by multiplying the average daily rate of hotels by the occupancy rate)) has not only recovered to pre-pandemic levels but has exceeded 2019 levels by 12 %. The resurgence is particularly evident in the Middle East and Europe, where tourism is back in full force. This is one of the main points in JLL’s hotel report, Global Hotel Investment Outlook 2024. Other key points are that sustainability is increasingly important and city hotels have regained ground.
Joseph Alberti, Head of Research at EDC Poul Erik Bech, says: ”After a period of very low investment activity, mainly due to the uncertainty of post-Corona travel, investment appetite is slowly returning.” JLL expects hotel investment volumes to increase significantly during 2024, and in the report, they predict growth of between 15-25 % globally, mainly due to stabilizing economic conditions and interest rate cuts. The same trend is emerging in Denmark, where investors are starting to become more confident and are starting to show more interest in the hotel sector.”
The increased interest in hotels has resulted in EDC Poul Erik Bech establishing a dedicated and independent hotel group to ensure a more structured advisory and sales process in the hotel sector. The sale of the former Hornbæk Hospital, which is currently being converted into a five-star luxury hotel, was the starting point for establishing an inde-
pendent hotel group with brokers from all over the country. At the same time, it has meant that EDC Poul Erik Bech has sold and got even more hotels for sale.
For example, the former Comwell Grand Park Hotel in Korsør is for sale for DKK 90 million, the recognized and historic Benniksgaard Hotel in Rinkenæs close to the Danish-German border, is for sale for DKK 42.5 million and a gem of a gourmet and beach hotel in East Jutland is for sale as a pending case for DKK 55 million. In addition, EDC Poul Erik Bech has a large number of hotels for sale in the mid-range of DKK 5-30 million.
Sustainability as a competitive differentiator
The Global Hotel Market Report also addresses the growing consumer focus on sustainability. Hotels that can demonstrate a strong commitment to sustainable practices are expected to have a competitive advantage. Helle Nielsen Ziersen, Head of EDC International Poul Erik Bech, who has completed a mini-MBA as Sustainable Manager, agrees that sustainability has become a competitive parameter:
”In general, sustainability is becoming more and more important, and also a lot more internationally than in Denmark. Consumers and hotel guests are becoming more aware of their environmental impact, and they often choose hotels that reflect their own values, so if hotels can demonstrate a sustainable profile, it can help provide a competitive advantage. We also see this in the Danish hotel market.”
More information
Helle Nielsen Ziersen
Partner, Head of International Relations, MRICS, MDE
Tlf.: +45 5858 8563 • hni@edc.dk
Joseph Alberti
Head of Research hos EDC Poul Erik Bech Tlf.: +45 5858 8564 • joal@edc.dk
Stephen Berthelsen
Partner, EDC Poul Erik Bech Nordsjælland Tlf.: +45 5858 8377 stbe@edc.dk
”As sustainability becomes an integrated part of hotels’ strategy, we are seeing an increase in the use of green financing. Green bonds and sustainable loans are becoming increasingly common as investors seek new sources of capital with lower Expenses and more favourable terms. In the report, JLL estimates that we see an increase in green financing and green bonds in the future, most likely with Europe as the leading continent,” says Helle Nielsen Ziersen.
Stephen Berthelsen, partner at EDC Poul Erik Bech Nordsjælland and chairman of EDC’s dedicated hotel group, adds: ”The deselection of sustainability is also an active rejection of a large proportion of all potential hotel guests, including the public sector and larger corporate customers. The Green Key label is a national and international sustainability standard for hotels, which also speaks to the sus-
Trends in the global hotel market
1. The hotel industry has globally recovered its pre-pandemic levels and has exceeded 2019 levels by 12 %.
2. The resurgence is particularly evident in the Middle East and Europe, where tourism is back in full force.
3. Hotel investment volumes globally will increase significantly during 2024 with an expected growth between 15-25 %.
4. Sustainability has become a competitive parameter in hotels.
5. City hotels were hit the hardest during Corona and are experiencing a strong resurgence.
6. Working remotely is becoming more and more common - a trend hotels need to adapt to and offer inviting workspaces both in guest rooms and common areas.
tainability agenda. It is complex to manage, especially for smaller operators, and all the major operators and chains are already certified.”
City hotels are the most popular
A third key point in JLL’s hotel report is that city hotels are experiencing a resurgence. It is no secret that city hotels were the hotel type most affected by the Corona pandemic with travel restrictions, closure of tourist attractions and no business or group travel. But now city hotels are back and in a better place than pre-corona.
Stephen Berthelsen says: ”We can clearly see an increased interest in hotels and other accommodation options from investors compared to just a few years ago. In Denmark, we saw a record number of overnight stays in 2023, and according to the report, this trend looks set to continue in 2024 and beyond, both globally and in our own neighbourhood. This is also reflected in the number of hotel stays in Denmark, which is above pre-corona levels. Hotel apartments and holiday apartments are also an emerging trend in Denmark, and German tourists in particular are very interested in the Danish country.”
”As the boundaries between living and working in different countries blur and it becomes more common to work remotely, we will see hotels preparing for this development with spaces that can be easily reconfigured or repurposed, such as meeting rooms or co-working areas in the hotel lounge. For hotel investors, it is all about adapting to new trends, technologies and consumer preferences to stay competitive,” says Stephen Berthelsen.
The rental of almost 200 apartments in Carlsberg Byen begins
The construction of the popular urban neighbourhood Carlsberg Byen is nearly finished, and the last apartments are taking shape. Until now, only owner-occupied apartments have been for sale, but the first major rental project is now emerging in the form of Vilhelms Hus and Beckmanns Tårn, which consists of 196 rental apartments. The project is designed by architect Dorte Mandrup and is expected to be completed and ready for occupancy 1 April 2025. The German property investment and development company Quantum purchased both properties last year and have chosen EDC Project Poul Erik Bech to handle the rental of the apartments.
Quantum is a market leader in property investment and development in Germany. Last year, they entered the Danish real estate market with the purchase of the block property Vilhelms Hus and Beckmanns Tårn, a real estate complex of more than 20,000 m² in Carlsberg Byen, consisting of 196 rental apartments.
EDC Project Poul Erik Bech has therefore, begun the preliminary work leading up to the start of the letting. Alexander Danielsen, Project Manager at EDC Project Poul Erik Bech, explains:
”Carlsberg Byen has so far only consisted of owner-occupied apartments, so this is a unique opportunity to rent a quality apartment with a high level of amenities in one of Copenhagen’s most popular neighbourhoods. Vilhelms Hus and Beckmanns Tårn mark a new era for Carlsberg Byen as the neighbourhood expands with rental apartments. The rental homes are 2 to 6-bedroom apartments with an average size of 103 m², and are therefore, aimed at a broad target group. We expect a lot of activity, and we are looking forward to welcoming applicants to visit the two trial apart-
ments in Vilhelms Hus and Beckmanns Tårn of respectively 129 m² and 145 m². The first moves-ins will take place on 1 April 2025.”
Acknowledged trophy property
The project was designed and built in collaboration with Arpe & Kjeldsholm, Kuben Management, Artelia, Sweco, OPLAND and architect Dorte Mandrup, who designed both properties. Thomas Høeg Mogensen, Customer and Relations-director at EDC Project Poul Erik Bech, says:
”Vilhelms Hus and Beckmanns Tårn are beautiful properties that combine modern design, sustainability and history with high-quality architecture and construction techniques. This is also reflected in the apartments, which fulfil all
the requirements for a modern home while benefiting from the unique and historic location in the northern area of Carlsberg Byen, next to Ny Carlsberg Vej, which is currently being transformed into an avenue with beautiful Kaiser lime trees and the original cobblestones.”
”We are of course delighted that Quantum has entrusted us with the letting of their first properties in Denmark. We are looking forward to working with them and can´t wait to help property seekers find the right apartment in this unique and exciting rental project.”
Trekløveren is one of the final housing projects in the newly developed neighborhood of Gartnerbyen, Odense. Situated close to Odense city center in a quiet area with green surroundings, it offers easy access to schools, supermarkets, shops, and the new light rail.
The project consists of 89 two- and three-room rental units distributed across three buildings. Each unit, certified with DGNB Gold, includes a terrace or balcony, perfect for enjoying summer evenings.
Despite a cooler market, the project saw high demand and is fully leased. The leasing was facilitated by EDC Project Poul Erik Bech on behalf of Industriens Pension
Read more at www.trekloeveren.dk
Contact: +45 5858 8487
Located in Hasselager on the former Bygma site, Poppelhusene comprises 73 modern rental homes ranging from 66-100 m², including both apartments and townhouses. These homes are designed in a Nordic style, emphasizing quality and well-thought-out layouts.
Each unit has a private balcony, terrace, or garden and is surrounded by green communal areas.
The project, just 8 km from Aarhus, offers a balance between nature and city life. It was fully leased before completion, facilitated by EDC Project Poul Erik Bech on behalf of Duas Bolig
Read more at www.poppelhusene.dk
+45 5858 8487
In Christiansbjerg, near the border of Aarhus C, you’ll find the housing project Augusthave, which includes 209 rental apartments.
The rental apartments come in various sizes, and with its excellent location near Aarhus University, Skejby, the city center, and many cultural attractions, the Augusthave project appeals to a wide range of residents. The development is DGNB Gold certified and offers high-quality homes with different layouts, each featuring a private balcony or terrace.
Just three months after the completion of the final phase, EDC Project Poul Erik Bech, representing CapMan, announced that the entire project was fully leased.
Read more at www.augustshave.dk
+45 5858 8487
Poppelhusene in Aarhus – 73 fully leased rental units
Trekløveren in Odense – 89 fully leased rental units
Augusthave in Aarhus – 209 fully leased rental units
Jordbrugets UddannelsesCenter Århus has put its educational facility at Starupvej 20B in Malling up for sale. The scenic, hilly plot has a local plan that allows for the development of 7,300 m² of residential space, expected to accommodate 70-90 homes. In recent years, Malling has seen significant infrastructure improvements, and with its proximity to the light rail and E45, it has become a popular neighborhood, anticipated to attract many new residents. The site is conveniently close to Malling town center and everyday amenities, with easy access to forests and Ajstrup Beach.
The future residential area is offered through a public tender and will be marketed by EDC Project Poul Erik Bech.
Read more at www.edc.dk/805037805
Contact: +45 5858 8487
Papirmuseets By, located at Bomhusvej 3, has served as a creative hub for the community in Gråsten for many years and is now set for redevelopment into residential properties. The plot is centrally located near the coast and Ulsnæs Center, offering easy access to city amenities and beautiful natural surroundings.
With a total area of 15,000 m² and a building percentage of 50%, the site allows for the development of up to 7,641 m² of residential space. The existing 1,000 m² building can be utilized, but buyers have the flexibility to adapt the project according to their needs.
The future residential area is available for sale at 8.25 million DKK and will be managed by EDC Project Poul Erik Bech.
Read more at www.edc.dk/64100754
Contact: +45 5858 8487
Vinge, near Frederikssund and just 45 minutes from Copenhagen, is one of Denmark’s largest urban development projects. On a sloped plot close to the station, the Bakkekvarteret housing project is being developed, featuring townhouses in both one and two floors. Designed by Vilhelm Lauritzen, the townhouses are built with a focus on low energy consumption and a healthy indoor climate, aiming for Swan certification. The project will include several community spaces, fostering a strong sense of neighborhood, and future residents will enjoy direct access and stunning views of the protected natural area, Præstemosen.
EDC Project Poul Erik Bech is responsible for selling the eco-friendly townhouses on behalf of Ikano Bolig
more at www.ikanobolig.dk/bakkekvarteret
Contact: +45 5858 8487
International Poul Erik Bech
International associate
JLL and EDC Poul Erik Bech new Nordic Outlook:
ESG and sustainability are changing the dynamics of the real estate industry
ESG and sustainability are gaining a growing voice in the real estate industry. This is also the theme of the autumn edition of Nordic Outlook, published by JLL (Jones Lang LaSalle), one of the world’s largest real estate companies. They have a particular focus on, how it is changing the dynamics of the real estate industry. EDC Poul Erik Bech is JLL’s partner in Denmark and has provided market figures and trends for the Danish part of the report.
A new Nordic Outlook is out with the headline Carbon commitments shape market dynamics, delving into ESG and sustainability in the real estate industry. As always, the report also dives into the Nordic market conditions, trends in the different property segments and looks at the outlook for the property industry in the Nordic countries. EDC Poul Erik Bech has provided market figures and trends for the Danish part of the report.
Helle Nielsen Ziersen, Head of EDC International Poul Erik Bech, who works closely with JLL and has recently completed a mini-MBA in ESG, says: ”ESG and sustainability are becoming more and more important. In our international department, we work daily with companies that are prioritizing and reporting on their ’green’ efforts to a much greater extent than before. Sustainability has become an independent business area like so many other things. It’s here to stay, and the interest and awareness is constantly growing.”
JLL is one of the world’s largest real estate companies with an annual revenue of USD 20.9 billion, and more than 103,000 employees and operations in over 80 countries.
She continues: ”Companies are investing more and more in various sustainability initiatives because the consequences of not doing so, are getting bigger and bigger. The number of companies signed up to SBTI (Science Based Targets Initiative) has increased fivefold in the past year. It is a non-profit initiative focusing on collaboration between companies and experts to ensure, that company climate targets are aligned with climate science. Over 8,000 companies, including 800 in the Nordic countries, are involved in the initiative. This is just one of many examples of how this is an area of significant growth.”
Tenants are demanding more
The theme article in Nordic Outlook also focuses on the fact that the more companies that sign up to initiatives such as SBTI, the more influence it has on companies’ choice of property. At JLL in Sweden, they are experiencing a significant increase in Demand for sustainable office space, and this is also something Helle Nielsen Ziersen recognizes in her daily contact with both Danish and international companies:
”Companies have become more aware of ESG and sustainability in the last few years, and this has a direct impact on companies’ choice of premises when buying or renting. Among other things, this has meant that, tenants have started to place higher demands on the property’s energy efficiency, carbon emissions and sustainability profile. Tenants are increasingly looking for solutions to reduce their carbon footprint, both in terms of operational emissions and embodied carbon, which is the total amount of carbon sequestered in the structure and materials of the building itself.”
”Green lease clauses have become a key tool for tenants who want to make sure their lessors are committed to sustainability goals. It helps to create an ongoing dialogue and collaboration between tenants and landlords aimed at making improvements, sharing consumption data and increasing transparency on things like energy consumption, water consumption and waste management. This leads to a change in the dynamics of the market - because if the landlord and tenant don’t work together, it’s difficult to change things,” Helle Nielsen Ziersen states.
Reason for cautious optimism
As always, JLL takes the temperature of the Nordic property market in Nordic Outlook, and if you look at the figures, there is light at the end of the tunnel. Joseph Alberti, Head of Research at EDC Poul Erik Bech says:
”The Swedish real estate industry, which is the largest in the Nordics, experienced a recovery in the second quarter of 2024 and transaction volumes have increased by 10% year-on-year. In the first half of the year, 49 billion SEK was traded, and of this, 32 billion SEK was traded in the second half of the first half of the year. This indicates that the gap between buyer and seller has narrowed and that there is reason for optimism.”
”In Denmark, the transaction volume for the first six months of 2024 was very close to the level of the same period last year. At the beginning of the year, the transaction volume was at a very low level, but it increased slightly, and the last few months were better than the first months of the year. Therefore, our expectation is that the transaction volume will quietly continue its upward-going trend for the rest of the year, and the total volume for the year will exceed 2023. However, everyone agrees that there is a long way to go before the previous record years,” says Joseph Alberti.
More information
Helle Nielsen Ziersen Partner, Director, Head of International Relations +45 5858 8563 • hni@edc.dk
Joseph Alberti Head of Research +45 5858 8564 • joal@edc.dk
FOR SALE
Fully leased investment property in Næstved
In 2023, Mogenstrup Kro was purchased by the current owners and thoroughly renovated/ rebuilt into 56 modern and well-designed rental apartments on a spacious plot. All apartments are leased, and there is currently a waiting list. The apartments, ranging from 54 to 100 m², with some exceeding 100 m², each have their own entrance and terrace and are newly equipped with high-quality interiors, technology, and materials.
Præstø Landevej 25, 4700 Næstved
Case number: www.edc.dk/474013181
Floor Area: 4,286 m² Land Area: 28,709 m²
Yield: 6.10% Price: 80,000,000 DKK
Contact: Sven Lyse, Partner, Director, MDE
EDC Poul Erik Bech, +45 5858 8396
Hotel and Conference center with excellent location in Korsør
Attractively situated in scenic surroundings, right next to Korsør Golf Course and close to the highway. The hotel features 134 bright, modern, and wellappointed rooms, all with space for a double bed and equipped with a private bathroom. The hotel includes various conference rooms and a large event hall/ conference room with a stage. Additionally, there are 30 meeting rooms, a restaurant, as well as both indoor and outdoor spa facilities.
Ørnumvej 6, 4220 Korsør
Case number: www.edc.dk/474013011
Floor Area: 10,881 m² Land Area: 33,606 m²
Price: 90,000,000 DKK
Contact: Thomas Hansen, Partner, Real Estate Agent, MDE, EDC Poul Erik Bech, +45 5858 8396
The property at Skomagergade 15 comprises a total of 2 residential units and 12 commercial units. The shops are located at the base of the building, as well as throughout the passage. Additionally, office spaces are found on the other floors, with two apartments situated on the top floor. The commercial units have solid tenants, including H&M and Colosseum Tandlægerne.
Skomagergade 15, 4000 Roskilde
Case number: www.edc.dk/403600408
Floor Area: 5,145 m² Yield: 6.20%
Price: 65,000,000 DKK
Contact: John Borrisholt Partner, Director, cand.merc.jur. MDE EDC Poul Erik Bech, +45 5858 8395
Attractive investment property on Roskilde’s pedestrian street
FOR SALE
Public tender of historic property in Herning
Agroskolen in Hammerum is now for sale through a public tender. This prominent property, featuring buildings from 1928, is situated on a 35,609 m² plot, primarily designed with green spaces. According to the local plan from 2023, there is potential for constructing townhouses around the original part of the property. The deadline for bids is set for February 1, 2025.
Hammerum Hovedgade 7, 7400 Herning Case number: www.edc.dk/709007063
Floor Area: 7,697 m² Land Area: 35,609 m²
Price: Tender/Public Auction
Contact: Michael Fænø, Partner, Commercial, HD-FR, MDE, EDC Poul Erik Bech, +45 5858 8567
The property presents itself as a timeless and modern office building with a high degree of flexibility. It has a built area of 5,300 m² and an additional first floor with installations of approximately 280 m². Furthermore, there is a basement of around 1,200 m², which includes a fully equipped server room, shower and changing facilities, and a bicycle cellar. The property is highly adaptable and can be reconfigured to merge or separate offices as needed. The property is eligible for depreciation.
Langagervej 6, 9220 Aalborg Øst Case number: www.edc.dk/912110630
Floor Area: 5,580 m² Land Area: 21,478 m²
Yield: 8.46% Price: 67,500,000 DKK
Contact: Martin Brasholt Mikkelsen, Partner, Real Estate Agent, MDE, EDC Poul Erik Bech, +45 5858 8449
Office property with an attractive location. A large property suitable for development as a company headquarters or for investment. The site spans over 22,000 m² and includes 4 independent, leased residential units, office space, and warehouse/workshop facilities. There is an additional 15,000 m² of land for storage or new construction. The property allows for a building ratio of up to 120, with a maximum of 5 floors. It offers a central location, ideal for a service, consulting, trade, or warehousing company.
Islevdalvej 208, 2610 Rødovre
Case number: www.edc.dk/114058072
Floor Area: 3,093 m² Land Area: 22,177 m²
Price: 60,000,000 DKK
Contact: Thor Heltborg, Director, Corporate Clients, EDC Poul Erik Bech, +45 5858 8378
Fully leased investment property in Aalborg
Gefion Group has bought Hillerød Post Office to develop 300 micro-apartments
The new project at Hillerød Post Office, recently acquired by Gefion Group, will feature a Micro Living concept with a strong focus on reusability and sustainability. EDC Poul Erik Bech Nordsjælland facilitated the sale. The upcoming 300 micro-apartments will range from 30-35 m², with the project expected to be completed in 2 to 2.5 years. It aims to create an inspiring area that will introduce a fresh and exciting atmosphere for those arriving at the station.
Contact: Stephen Berthelsen Partner, Head of Commercial, Real Estate Agent and Appraiser, MDE
EDC Poul Erik Bech, +45 5858 8377
The German safety giant, DEKRA, with departments in over 60 countries and more than 48,000 employees, is expanding its presence in Northern Jutland. The company has purchased a 15,000 m² plot in Nørresundby, where they are constructing a new DGNB-certified AMU Center for the transportation sector, expected to be completed in early 2025. EDC Poul Erik Bech Aalborg facilitated the sale between seller Brian Schou of K3 Ejendomme and buyer DEKRA, leveraging their network and local expertise.
Contact: Frank Jensen Director, Partner
EDC Poul Erik Bech, +45 5858 8449
Købmandsfonden KFI has expanded its property portfolio with the purchase of a classic city property in Roskilde. Located at Skomagergade 11-13 in the city’s central area, the property currently houses Meny on the ground floor with a facade facing the pedestrian street, and plans include expanding with residential units. EDC Poul Erik Bech Roskilde facilitated the sale of the property, with a price of nearly 60 million DKK. KFI owns and manages 162 properties in Denmark, with a total value of approximately 6.3 billion DKK.
Contact: John Borrisholt, Director, Partner, cand.merc.jur., MDE
EDC Poul Erik Bech, +45 5858 8395
DEKRA expands with new DGNB-certified amu center of 2,700 m² in Nørresundby
KFI buys city property with prime location on Roskilde’s pedestrian street
Executive summary – 3rd quarter
The market for investment properties has increased slightly compared to last year, despite a slower start to the year, mainly due to the high interest rates. The preliminary estimate for the transaction volume for the first 8 months or 2/3 of the year is DKK 22.8 billion, which is DKK 1.1 billion or 5% more than last year. The first signs of an increasing transaction volume are already showing themselves, as the central banks lower interest rates. Yields are mostly moving sideways at the moment, and forecasts for 12-month levels in many places are for yields to be roughly unchanged from today’s levels.
Denmark’s GDP has been positively affected by Novo Nordisk’s growth rate, while much of the rest of the economy has been in near stagnation – a stagnation which is expected to gradually shift towards modest growth. Consumers in Denmark currently spend a relatively small portion of their income, so given the prospect of rising real wages and lower interest rates, it is expected that
consumption will increase. Inflation has fallen drastically in Denmark, but is expected to be slightly higher going forward, partly due to significant wage increases. Employment continues to grow, and productivity in e.g. pharma seems to have slowed down quite noticeably. However, job growth is expected to slow down and productivity to recover, but there is some uncertainty.
All these conditions help to support activity among firms, and activity on the market for leasing offices and industrial and logistics properties is decreasing, albeit from a high level of activity. This has resulted in the vacancy rate for both property types increasing slightly. However, it should be noted that the vacancy rate is coming from a very low level in a historical context. Due to the relatively weak expectations for the economy in 2024, we expect that the vacancy rate will continue to rise slightly in the coming quarters.
The Danish economy
Annual GDP growth
The Danish economy grew by 2.5% in 2023, according to the latest national accounts report. The new calculation also shows that the economy increased by 9.8% over the period from 2020 to 2023. This suggests that the economy is stabilizing after the downturn in 2020. The growth in GDP has been primarily driven by contributions from the pharmaceutical industry.
The latest forecast from the Economic Council shows an expected growth of 1.9% in 2024 and 2.2% in 2025. The estimate for growth in the Danish economy has been significantly revised upwards. At the same time, inflation and housing prices are assessed to have stabilized, and employment is expected to remain high.
Source: Statistics Denmark & Ministry of Economic Affairs
In 2023 and the first half of 2024, the development of interest rates has been more subdued and stagnant compared to 2022, when interest rates rose significantly. This is due to a downward trend in inflation up until mid-2024, primarily driven by a decline in energy costs. The short-term interest rate, which is closely correlated with the monetary policies of the American and European central banks, the FED and ECB, has followed a steady trend and stands at 2.52% at the beginning of September 2024 after two rate cuts by the ECB. The long-term mortgage rate has been more volatile, with a decline since October 2023. As of early September 2024, the long-term mortgage rate stands at 4.18%.
20,076
Source: Finance Denmark & Statistics Denmark
Consumer confidence reflects the population’s view of their current and future economic situation and is therefore a good indicator of how the general population is affected by Denmark’s economic situation. The Consumer confidence for August 2024 stands at -7.4, a slight decline from July, where it was at -5.4. All five of the indicators that make up consumer confidence have decreased since last month. The average for 2022 was -22.2 and for 2023 it was -15.6, indicating that the current consumer confidence is a significant improvement.
Source: Statistics Denmark
The recent figures from Statistics Denmark show an increase in the number of employees. From May to June, the number of employees increased by 1,600, bringing the total employment of employees to 3,025,200 people.
In June 2024, there were 28,300 more employees compared to June 2023. The increase is due to growth in the number of employees in several sectors, with the largest increase of 6,700 people observed in the industrial sector compared to June 2023, corresponding to a rise of 2%.
Investment activity in the residential rental property market, like the rest of the investment market, remains low due to high interest rates. With a transaction volume of DKK 10 billion in the first 8 months of the year, residential rental properties are still the most attractive segment for investors.
The decline in transaction volume is driven by elevated interest rates and uncertainty in general. This has led to significantly higher return requirements from buyers, while sellers have been slow to adjust their expectations to the new market situation.
Overall, yield requirements remain lower in Denmark compared to neighboring countries. This is partly explained by the fact that Danish property investors generally have a more robust financing structure, making them less sensitive
to interest rate fluctuations than for example, investors in the Swedish market. As a result, many investors have the ability to hold onto their properties rather than accept a lower sale price.
The combination of high interest rates and rising taxes may lead more private individuals to choose, or be forced, to rent rather than buy, as renting is currently relatively more attractive in many areas.
Market rents are expected to remain stable to slightly increasing in the coming year, while yield requirements are expected to stay stable at current levels. This is partly due to the expectation of continued declines in interest rates over the next year, which will naturally improve conditions in the transaction market.
Hortensiahaven, Gartnerbyen in Odense, Funen.
Lolland, Falster and Møn
Other Funen
Sønderborg
Development in office properties
Demand for flexible and modern conditions
The demand for attractive office properties remains strong, while secondary office properties are experiencing lower demand. In 2024, we have seen several major transactions, particularly among institutional investors. Despite this, transaction volume has still dropped by around 25%. In contrast to many other European countries, this is relatively positive, as activity has declined more sharply in other markets with significant increases in yield requirements, even for the most attractive properties.
In Denmark, demand is supported by a continuously growing labour market with record-high employment, as well as more limited work-from-home practices compared to larger European metropolises.
Many companies continue to seek flexible office solutions due to increased focus on remote work, better space uti-
Available office space as a percentage of building stock
lization, and scaling opportunities. This is especially the case in Copenhagen, where the supply of flexible office concepts is large, while in cities such as Aarhus, demand for such spaces is high, but supply is limited—particularly in the city center, where demand for office space is greatest. However, there are also trends in the opposite direction, with some companies establishing policies around the number of remote workdays to limit work-from-home possibilities.
The national office vacancy rate was 5.7% in Q3 2024, up 0.7 percentage points from the same quarter the previous year. Yield requirements are generally expected to remain stable over the coming year, as is the market rent. However, the future course of interest rates will be a major factor, as a continued high rate environment could lead to further increases in return requirements—particularly for prime office properties.
Source: Ejendomstorvet-ED Statistikken, estimates as of Q3 2024
Østerbro, Frederiksberg and Gentofte
market rent in DKK/sq m
in
Sønderborg
DKK 1,000 DKK 550 DKK
Annual market rent in DKK/sq m 1,800 DKK 1,200 DKK
Development in retail properties
Focus on grocery anchored real estate & retail parks
The high uncertainty of recent years has led to a sharp decline in transaction volume, with retail transaction volume in 2024 year-to-date at only DKK 1.5 billion, representing 6% of total transaction volume. The decline is widespread, leading to significantly increased yield requirements.
There is still demand for grocery portfolios with geographic diversity, as grocery stores are seen as resilient to economic fluctuations. Additionally, grocery chains often lease on long-term contracts with long non-termination periods.
Consumer confidence remains negative but has generally improved since the low point in October 2022, reaching -7 in August 2024. Higher rent increases due to NPI (Net Price
Index) adjustments have put pressure on tenants. However, not all landlords have implemented full NPI adjustments. Some landlords have taken into account tenants’ financial robustness or the risk of termination, as well as the risk of a Section 13 rent adjustment, which could lead to regulated rent exceeding market rent. The risk of high NPI adjustments has also raised tenants’ awareness of clauses in lease agreements regarding rent regulation, leading to increasing demands for maximum adjustment clauses in the future.
Retail vacancy has slightly increased over the past year, rising by 0.1 percentage points to 3.1% in Q3 2024. Yield requirements are generally expected to remain stable to slightly increase over the coming year, while there is some risk of declining market rents in certain areas.
Source: Ejendomstorvet-ED Statistikken, estimates as of Q3 2024
Lolland, Falster and Møn
Vejle
Development in industrial properties
High investor demand, but rising vacancy
The logistics segment has seen continued strong investor demand in recent years, as highlighted by a transaction volume of DKK 6.5 billion year-to-date in 2024, accounting for 28% of total transaction volume.
Demand is primarily focused on newer, modern logistics properties located near essential infrastructure such as highways. Increased focus on supply chains is a contributing factor to the healthy activity, as demand among users for warehouse and logistics properties is rising.
High-ceilinged warehouses with good access and ramps are particularly sought after, meeting current needs. There is also growing interest in sustainable and energy-efficient properties, preferably certified.
However, the supply of the most sought-after properties has not kept pace, partly because industrial and logistics
Available industrial space as a percentage of building stock
areas close to cities are increasingly being converted into residential areas. At the same time, it is becoming increasingly difficult to secure suitable land for logistics properties in prime locations, partly due to a lack of municipal willingness to designate land for warehouses and logistics properties.
The industrial segment has also experienced high demand in recent years, primarily driven by users rather than investors, although a larger portfolio of industrial properties has been traded in recent years.
The vacancy rate for industrial and logistics properties has risen sharply over the past year, with the national rate increasing by 67% to 2.9% in Q3 2024. Yield requirements are expected to remain stable in the coming year, as is the case for market rents.
Source: Ejendomstorvet-ED Statistikken, estimates as of Q3 2024
Definitions
Location and condition
Yield and rent levels estimates are based on primary, secondary and tertiary categories, where primary is the best and tertiary is the worst. Various variables for each property type have been taken into consideration with regards to determine the facility classes, such as: size, floor plan structure, year of construction, lifts, climate control, cabling infrastructure, staff facilities, customer facilities, parking facilities, building energy rating, ceiling height, general accessibility, general condition of the property, etc.
Primary: A property with prime location and class A facilities has the best possible location in an area, the highest standard when it comes to facilities, is modern and ready to move into. This type of property will typically be sold at the lowest yield in the area, have the highest market rent and have a short reletting process.
Secondary: Average in terms of location and condition. Yield and rent levels also reflect the average levels for the area. The re-rental options are market compliant and reflect the general market conditions.
Tertiary: Poor location for the area, low standard, and outdated. This type of property is expected to be able to be sold at a relatively high yield level, and the rent level is low for the defined area. Similarly, vacancy rates can be expected to be higher than the market average.
Yield
All yields are initial net yields and are defined as the annualized rent generated by the property after the deduction of estimated annual irrecoverable property outgoings, expressed as a percentage of the property valuation (property valuation is adjusted for the value of rental deposits and prepaid rent). For comparison purposes, it is assumed that all properties are fully let at market-conform conditions.
Market Rent
All rents are headline rents, in other words, the contracted gross rent receivable, which becomes payable after any tenant incentives have expired. Market rent estimates are expressed in DKK/sq m/year. It is assumed that all properties are let at market-conform conditions.
* Area specifications
Copenhagen City = Copenhagen K ex. harbour areas.
Østerbro, Frederiksberg og Gentofte = Østerbro, Frederiksberg and Gentofte municipalities.
Harbour area (Nordhavn, Kalvebod Brygge & Tuborg Havn) = Areas located along Copenhagen’s harbour.
Remaining Copenhagen = Vesterbro, Nørrebro, Nordvest, Valby, Sydhavn (ex. harbour areas), Brønshøj, Husum, Vanløse, København S (ex. Ørestad and harbour areas), Kastrup and Dragør municipalities.
Western suburbs = Hvidovre, Rødovre, Glostrup, Brøndby, Albertslund, Vallensbæk, Ishøj, Høje Taastrup, Ballerup and Herlev municipalities. Northern suburbs = Lyngby, Holte, Farum, Birkerød, Gladsaxe, Rudersdal and Furesø municipalities.
Residential rental properties
1) Newer residential rental properties are properties that have been occupied after 31.12.1991 and thus covered by the rules on free/market rent according to the Danish Residential Rent Regulation Act section 54 (1, 1).
2) Cost determined rental properties are older residential rental properties that have been occupied before 31.12.1991 and are regulated in accordance with the provisions of the Danish Residential Rent Regulation Act on cost-determined rent.
3) Fully developed older residential rental properties are older home rental properties without further potential for rent increases through modernization pursuant to section 19 (2) of the Danish Residential Rent Regulation Act.
Data for available commercial premises
The source of available commercial premises is the latest available supply statistics from Ejendomstorvet. Further information about these statistics can be found at ejendomstorvet.dk/statistik/udbudsstatistik.
Trends
All trends reflect our expectations to the level in 12 months time.
The figure is expected to increase
The figure is expected to remain unchanged
The figure is expected to decrease
Note on estimates
The valuation of a property depends on many specific factors, including conditions of the lease, the tenant, and the property condition. The estimates cannot be used uncritically in the valuation of one specific property but can serve as input related to the valuation. Reproduction or citation only with acknowledgment of source. While every effort has been made to ensure that the information provided is accurate, EDC International Poul Erik accepts no liability for errors.
North Zealand = Gribskov, Helsingør, Allerød, Hillerød, Egedal, Fredensborg, Halsnæs and Hørsholm municipalities.
East Zealand = Greve, Køge, Lejre, Roskilde and Solrød municipalities.
West Zealand = Holbæk, Kalundborg, Odsherred, Ringsted, Slagelse and Sorø municipalities.
South Zealand = Faxe, Næstved, Stevns and Vordingborg municipalities. Lolland, Falster and Møn = Guldborgsund and Lolland municipalities.
Other Funen = All municipalities at Funen ex. Odense.
Other South Jutland = Billund, Fanø, Haderslev, Tønder, Varde, Vejen and Aabenraa municipalities.
West Jutland = Skive, Struer, Holstebro, Thisted, Morsø and Ringkøbing-Skjern municipalities.
As an investor, it is crucial to approach an investment objectively. With analyses from EDC Poul Erik Bech, we provide you with the opportunity to do just that by ensuring that your investment is based on a solid data foundation. EDC Poul Erik Bech Research offers area-specific analyses for the entire country that can be tailored to your specific needs. Additionally, we provide in-depth analyses of population trends, housing supply, transaction volume, and more, which can help you as an investor to make the right decisions based on a solid knowledge foundation.
If you have questions, you are more than welcome to contact us:
Joseph Alberti Head of Research
joal@edc.dk
CONTACT
EDC Poul Erik Bech
Zealand/Funen
Copenhagen +45 5858 8378
Herlev +45 5858 8376
Taastrup +45 5858 8472
Hillerød +45 5858 8377
Roskilde +45 5858 8395
Køge +45 5858 8379
Næstved +45 5858 8380
Slagelse +45 5858 8396
Odense +45 5858 8397
Jutland
Kolding +45 5858 8399
Aabenraa +45 5858 8425
Sønderborg +45 5858 8422
Esbjerg +45 5858 8398
Vejle +45 5858 8423
Aarhus +45 5858 8670
Silkeborg +45 5858 8427
Herning +45 5858 8567
Viborg +45 5858 8424
Aalborg +45 5858 8449
Vendsyssel +45 5858 8487
International +45 5858 8563
Research +45 5858 8564
Agriculture East +45 5858 8574
Agriculture West +45 5858 8683
Project +45 5858 8487
Capital Markets +45 5858 8572
Be the first to know when new properties come up for sale
We have Denmark’s largest buyer/tenant register. If you haven’t found the right property yet, let us help you!
Create your personal wish in our nationwide buyer/tenant register, and be the first to know when new properties come up for sale. We screen all properties for you and only show you the properties that match your wishes.
