Market Insight Q3+Q4 2023 - UK by EDC Poul Erik Bech

Q3/Q4 |

2023

MARKET Insight Data and in-depth analyses can pave the way for good investments

Experienced Capital Markets player: ”We are ready when the market turns”

The market is a long hurdle race: The question is how many hurdles need to be cleared?

International Poul Erik Bech International associate

Contents

8 12

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 +45 5858 8397 Odense Jutland Kolding Aabenraa Sønderborg Esbjerg Vejle Aarhus Silkeborg Herning Viborg Aalborg Vendsyssel

+45 5858 8399 +45 5858 8425 +45 5858 8422 +45 5858 8398 +45 5858 8423 +45 5858 8670 +45 5858 8427 +45 5858 8567 +45 5858 8424 +45 5858 8449 +45 5858 8487

International +45 5858 8563 Research +45 5858 8564 Agriculture +45 5858 8574 Project +45 5858 8487 Capital Markets +45 5858 8572

Page 4 The market is a long hurdle race: The question is how many hurdles need to be cleared?

8 10 12 16 18 20 22 24 25 29

Experienced Capital Markets player: ”We are ready when the market turns” Residential Rental Projects EDC Project Poul Erik Bech EDC Poul Erik Bech continues to ride the hotel wave: Hotels, inns, conference centres, holiday centres, hostels, and camping are moving - also on the investment front Data and in-depth analyses can pave the way for good investments CityFact: An Exceptionally Useful and Relevant Analytical Tool for Investors 156 apartments with a focus on community to be rented out in Ørestad EDC Project Poul Erik Bech secures the Re-leasing of 800 Apartments at Sluseholmen First youth apartments at Kvægtorvet in Slagelse ready for occupancy For sale and rent Market Update Q3, 2023

What does the future hold for the real estate and mortgage market?

Dear reader, You are holding our magazine, Market Insight, where we delve into current issues, trends, and topics in the commercial real estate market. As always, you will find the latest edition of Market Update in the middle of the magazine, where you will be presented with the latest market data. Market Insight and Market Update are published in both Danish and English, as an increasing number of our customers are international.

discusses the mortgage market, the competitive situation, ESG, and expectations for when the market will turn around. Earlier this year, STAD Project became a part of EDC Project Poul Erik Bech, and since then, the project department has been progressing rapidly, where we have created Denmark’s strongest project team. In this edition of Market Insight, you can get an overview of our many projects spanning the entire country.

It is no secret that the real estate industry has faced challenges in 2023. But what will it look like in 2024? For the 9th consecutive year, we are conducting a comprehensive market survey on expectations for the upcoming year. This survey is the most extensive in the industry and has become a recognized tool for businesses and investors.

The number of hotel stays in Denmark has never been higher. Investors have taken notice, and that is why, at EDC Poul Erik Bech, we have established a specialized hotel group to ensure an even more structured process in advisory services, valuation, and sales of hotels. You can read more about this in this edition of Market Insight.

The results of the survey will be unveiled at an exclusive Expectations Seminar, which we will host on November 30, 2023, at Industriens Hus. During the seminar, external and internal experts will comment on the results and provide insights into the future of the real estate market. As in previous years, we have invited our international partners from JLL, one of the world’s largest real estate brokerage firms, to provide an update on international trends.

Enjoy your reading! Best regards, Poul Erik Bech

Here in Market Insight, you can also meet one of the speakers for the seminar, as Carsten Tirsbæk Madsen, CEO of Jyske Realkredit and Chairman of the Mortgage Council,

At EDC International Poul Erik Bech, we always operate with one One-Point Entry for each client, which ensures efficient communication and services tailored to your business. Contact us: Helle Nielsen Ziersen, Partner, Head of EDC International Poul Erik Bech, +45 58588717 • hni@edc.dk 3

The market is a long hurdle race:

The question is how many hurdles need to be cleared? Carsten Tirsbæk, CEO of Jyske Realkredit and chairman of Realkreditrådet, is one of the keynote speakers at EDC Poul Erik Bech’s annual Expectations Seminar scheduled for November 30th, 2023, to be held at Industriens Hus. During this event, the results of our annual Expectations Analysis for the 9th consecutive year will be unveiled. Carsten Tirsbæk describes the commercial real estate market as a prolonged hurdle race. He anticipates that the cost of borrowing money is unlikely to decrease in the foreseeable future and issues a call of action for the real estate industry: Get control of ESG data.

it will likely continue to see a fair bit of “tug-of-war.” Currently the market is like navigating through a lengthy hurdle race, and the question is how many hurdles investors can keep jumping over before more start stumbling over them.”

Carsten Tirsbæk has been employed at BRFkredit/Jyske Realkredit since 1990, accumulating over 30 years of experience in the financial sector at large, with a specific focus on the Danish mortgage credit market. He has been operating at the executive level since 2001. Regarding the current commercial real estate market, he rhetorically inquires “What market?” and elaborates:

”The Danish economy is in a strong position compared to Europe. Both businesses and individuals are relatively well-off financially. We are in significantly better shape than after the financial crises, as more capital has been built up, and the loan-to-value ratio (LTV) generally is lower. Compared to the past, there is a substantial amount of money in the market from both Danish and international investors, so many are ready to invest when the timing is deemed suitable. So, when is the right time? What uncertainties exist? What is the most likely outcome among the many scenarios?”

”Not much has been happening, to be honest. Over the past 1 ½ years, the significant rise in interest rates has significantly dampened the situation. These interest rate increases have raised the required rate of return. However, we have also witnessed that escalator clauses and vacancy rates aren’t challenging for most segments. At the moment, sellers and buyers are simply too far apart. Overall, this means that sellers have reasonable financials and liquidity, so they aren’t willing to compromise on prices. This means

Join us at EDC Poul Erik Bech’s annual Expectations Seminar on November 30, 2023, at Industriens Hus in Copenhagen, hosted by the Confederation of Danish Industry, where we will unveil the results of our comprehensive Expectations Analysis on the commercial real estate market, conducted for the 9th consecutive year. You can hear a presentation from Carsten Tirsbæk of Jyske Realkredit, among other speakers. Read more at www.forventninger2024.dk

Timing for Investment Timing often plays a crucial part in determining how good a trade or investment is. “Notably, when it comes to real estate, the interest rate level is a significant factor. Most economists agree that interest rates have peaked, and we will begin to see a decline in 2024. Some will argue the start of 2024, and some will argue the end of 2024. We found ourselves somewhere in the middle, where at Jyske Realkredit, we anticipate that interest rates will start moving downward again during the summer of 2024. Perhaps this will also contribute to give the market a little more momentum? Property prices will also impact property taxes. Currently, there is a lot of debate about preliminary property valuations. We will also see some uncertainty when it’s time for commercial properties, especially because the reference point for valuing the land is what we already know, which has posed some challenges for residential properties. In this game, there will be both winners and losers, but perhaps, worst of all, a period of uncertainty.”

mortgage institutions have just received new guidelines from the Financial Supervisory Authority, with 120 points we must adhere to regarding due diligence and the project/ property being considered for financing. Then there’s the liquidity rule, which means there must be positive liquidity in the property, including financing costs, for a fixed-rate loan with amortization. With the current interest rate level, an 80% loan-to-value ratio for a residential rental property is a distant dream. It’s more likely to be somewhere between 60-70% that can be leveraged. So YES, more money needs to come from the customer’s side.”

Not cheaper to borrow money The mortgage institutions in Denmark play a central role in the Danish economy. They specialize in providing financing against security in property collateral. Regarding issuers’ ability to meet obligations to investors, the Danish mortgage credit system is among the safest in the world. Carsten Tirsbæk states: “The Systematic Risk Council has just issued a recommendation that a sector-specific systematic buffer for exposures to property companies be activated in the commercial real estate sector, with a rate of 7% of risk-weighted assets, effective from June 30, 2024. The argument is that the currently higher interest rates contribute to increased costs in the industry, which raise the risk of loan losses, and that the financial institutions’ risk models do not account for this. In practice, this translates to increased capital requirements for various banks and mortgage credit institutions of 30-60% on these properties.” “It’s no secret that we think it’s gone far beyond the mark. Let me clarify: this will not contribute to cheaper borrowing. In general, customers should get used to the fact that they need to bring more money when they want to borrow. Banks and 5

Liquidity and Optimism Carsten Tirsbæk concludes: “Despite uncertainties and dark horses, we are not running around being overly pessimistic. In general, our customers are doing well. Liquidity is still reasonable for the vast majority of customers even with the rising interest rates. So, there aren’t any serious issues. The installments are being paid as they should. We were worried that it would look worse. In the future it’s naive to think that everyone can sail through without challenges. But in my opinion, we are not facing a major crisis. Returning to the hurdle race, there will always be some with heavy legs who stumble over a hurdle, but the vast majority have prepared themselves so well they will clear the hurdles as they should.

”We are experiencing intense competition in the loan market, both among mortgage institutions and banks. At the moment, one could arguably say that supply exceeds demand. Recent years regulations and the pipeline in the field are likely to reduce the variance between the terms offered by different providers. So, even though it becomes harder to differentiate oneself in the market, the supply-demand dimension will still operate. It is, of course, good for competition that many of us are willing to lend to the right customers and property transactions.” Attention: Get a Grip on ESG ESG is yet another dark horse in the real estate market. Carsten Tirsbæk says: ”We make a living by lending money to customers we believe will be able to pay us back. We must be confident that customers can repay us before entering a partnership. The better we know the customers can document their business, the better our ability to make the right lending decisions, which ultimately means fewer losses. A new dimension in customer analysis, and increasingly crucial for lending decisions in the future, is ESG. Here, we have a clear call to our customers: Start documenting your efforts and results as soon as possible. It will make a significant difference so those customers who are prepared and have done their homework will be in a much stronger position, not only to borrow money and do business but also to take advantage of the opportunities that will undoubtedly arise in the real estate market. ”The influential political pressure, which is already a reality, will result in massive regulation in the coming years. For example, negotiations in the EU are currently underway concerning building directives that will set the framework for how much one will be obligated to invest in energy improvements in their properties. What are the company’s ambitions in the ESG area? What is the property strategy? What do the data show about consumption and CO2 emissions? How can you improve? What is the plan for improvement?” Our call to companies is to work ambitiously on ESG, create transparency, and provide documentation. There are all sorts of scenarios in play, and it’s hard to predict how it will end. But one thing is sure: Get control of ESG data, or you’ll be at the back of the platform when the ESG train departs. There will undoubtedly be many requirements, which will come quite forcefully. 6

Come to the morning seminar HERE ARE THE EXPECTATIONS FOR 2024 Do you want to know what to expect in the real estate market in 2024? Then, join us as we focus on expectations for the development of the commercial property market at our large morning seminar. It’s free to attend the event, but most of the day will be in Danish.

Thursday, November 30, 2023, from 9.00 AM to 11.30 AM. Industriens Hus, H. C. Andersens Boulevard 18, 1553 Copenhagen We will provide coffee and a light breakfast from 8.00 AM. We have invited a range of experts who will enlighten us on what to expect in the upcoming year. • What is the current state of the Danish real estate market in today’s Denmark, and what are our expectations for 2024? Joseph Alberti, Head of Research EDC Poul Erik Bech • Status of the Swedish and Nordic real estate market and expectations for further development. Thomas Persson, Head of Capital Markets, Jones Lang LaSalle (JLL) • What can you as a Danish investor expect when financing properties abroad? Joakim Nirup, Head of Debt and Financial Advisory, Jones Lang LaSalle (JLL) • What expectations do we have for opportunities and challenges in property financing in Denmark in 2024? Carsten Tirsbæk Madsen, CEO, Jyske Realkredit • Summary and concluding reflections by Poul Erik Bech

Scan and sign up here or at forventninger2024.dk

There are limited seats, and they will be allocated on a first-come, first-served basis.

Joseph Alberti

Thomas Persson

Joakim Nirup

Carsten Tirsbæk Madsen

Poul Erik Bech

Head of Research EDC Poul Erik Bech

Head of Capital Markets, Jones Lang LaSalle

Head of Debt and Financial Advisory, Jones Lang LaSalle

CEO, Jyske Realkredit

Managing partner EDC Poul Erik Bech

Experienced Capital Markets player:

”We are ready when the market turns” Flemming Buhl has been Head of Capital Markets and has been responsible for major clients at EDC Poul Erik Bech since 2020. He came from a position as Real Estate Director at Danske Bank, where he had been for almost 35 years. Market Insight sat down with him to discuss his new role in the brokerage industry and his views on the investor market.

Flemming Buhl began his career in the real estate industry as Real Estate Director at Danske Bank/Nordania Leasing, where he was given executive and commercial responsibility for a substantial property portfolio of more than 7 billion DKK in Nordania Leasing. The responsibility of the portfolio was given to him after the Lehman Brothers bankruptcy, which is why the portfolio needed crucial handling. Thus, Flemming Buhl quickly gained insight into how severe of an influence economic cycles and future rate expectations can have on the pricing of commercial properties. He says:

always worked with a long-term perspective and seen things in the long run. Despite the current challenges and a market that’s struggling, I truly believe we have progressed significantly, and we keep getting closer and closer to our clients.” ”We have many positive conversations and partners, so as of right now, we must be completely ready when the market turns again. Although the property market is quite challenging at the moment, it’s pleasing to see that we are finishing some cases within logistics with a pension fund and on prominent office properties and office projects in Copenhagen. With the acquisition of STAD Projekt, our robust project department has also considerably enhanced our competitive edge, which we can already see in our growing client base (read more about EDC Projekt Poul Erik Bech on pages 10-11, editor’s note).”

”It has been an exciting transition to the commercial brokerage industry since the end of 2020, where I have been working on positioning and developing EDC Poul Erik Bech’s Capital Markets area. Over the past 20 years, I have worked on building and evolving a significant property portfolio and have carried out a substantial number of property transactions, due diligence processes, and negotiations on both the buying and selling sides. I had to utilize my solid financial knowledge, experience with property transactions, and extensive network, all of which have enabled us to strengthen our Capital Markets area.” Flemming Buhl continues: ”As Head of Capital Markets and responsible for major clients, I enjoy having an influence on customer activities and transactions, together with my super positive and skilled colleagues in a currently turbulent real estate market, which also offers opportunities. It is inspiring to succeed, win good cases, and exceed customers’ expectations. Every day, we strive to elevate Capital Markets as a natural partner for new, complex cases in the real estate industry in close cooperation with our 19 local business centers. It has been an exciting few years so far. And we are still thriving and well on our way.”

It’s Time to Get Back to Transactions Buyers and sellers are still often too far apart regarding price expectations, and the transaction volume is much lower than it was in the two exceptional years in 2020 and 2021. Flemming Buhl says, ”Right now, there’s simply too significant of a difference between buyers’ and sellers’ price expectations. So, there’s no doubt that the best thing for the industry would be if, by some magic, we could bring inflation expectations and interest rates down to a lower level. Aligning buyers and sellers to agree on price levels is crucial for us to get back to transactions.”

Enhanced competitive power The property market looked quite different when Flemming Buhl started back at the end of 2020. Now, it is wars, high interest rates, inflation, construction costs, and energy prices that are affecting the market. ”The market was considerably more positive when I joined EDC Poul Erik Bech. Strengthening our Capital Markets division and major client functions takes time, and I have 8

But what has been one of the most compelling transactions so far at EDC Poul Erik Bech? ”It has been a true pleasure to assist the state property company, Freja Ejendomme, in listing the historic and iconic Hornbæk Hospital for public tender. The demanded property was sold in April 2023 to the property developer COPI Group after an extended bidding process involving several interested investors. There was immense interest among the investors, and it’s clearly one of the cases that has received the most media attention in my many years in the industry, so it’s always fun and thrilling to be a part of. However, I must say that many exciting cases have come my way, and we are much stronger in our Capital Markets area.”

More information Flemming Buhl, Head of Capital Markets and partner, EDC Poul Erik Bech +45 5858 8572 • flb@edc.dk

EDC Project Poul Erik Bech Selection of our latest rental and sales projects in Denmark. Contact us at www.poulerikbech.dk/projekt

Aarhus, Bertasminde 47 46 apartments for rent

Aarhus, Augustshave 209 apartments for rent

Aarhus, Tulipanrækkerne 110 apartments for rent

Aarhus, Amaliegade 18 48 apartments for rent

Aarhus, Godsbanehuset 76 apartments for rent

Aarhus, Nordbjerg 172 apartments for rent

Silkeborg, Byhaven 98 apartments for rent

Odense, Gartnerbyen 53 apartments for rent

Odense, Odins Brygge 82 apartments for rent

Odense, Trekløveren 89 apartments for rent

Odense, Signaturbyen 132 apartments for rent

Kalundborg, Mullerup Strandhuse 62 holiday homes for sale

Ringsted, Kasernebyen 210 apartments for rent

Køge, Strandterrasserne 35 apartments for sale

Slagelse, Kvægtorvet 324 apartments for rent

Rønnede, Golfhaven 32 houses for rent

Næstved, Stenlænge Park 55 apartments for rent

Haslev, Grøndals Have 128 apartments for rent

Allerød, Sjælsø Allé 31 apartments for rent + re-letting

Nivå, Teglsøerne 97 apartments for sale

Helsingør, Kronborg Strand 44 apartments for sale + 98 for rent

Egedal, Gammel Ølstykke 49 apartments for rent + re-letting

Lyngby, Skovbrynet 147 apartments for rent + re-letting

Gladsaxe, Project Radio 272 apartments for rent + re-letting

Ballerup, Bydammen 77 apartments for sale

Copenhagen, Marmorbyen Ø & V 259 apartments for rent + re-letting

Copenhagen, C. F. Møllers Have 156 apartments for rent

Copenhagen, Applebys Have 149 apartments for rent + re-letting

Copenhagen, Amagerbro 81 apartments for rent + re-letting

Copenhagen, St. Kongensgade 100 72 apartments for rent + re-letting

Copenhagen, Teglholmen 703 apartments for rent

Copenhagen, Sluseholmen 800 apartments for rent + re-letting

Copenhagen, Studio Apartments 165 apartments for rent

Copenhagen, No130 76 apartments for rent

Copenhagen, Engvej 155 372 apartments for rent + re-letting

Glostrup, Kirkebjerg Parkhouse 118 apartments for sale

Roskilde, Ringstedgade 58 43 apartments for rent + re-letting

Albertslund, Rådhus Have 93 apartments for rent

Rødovre, Rødovre Port 534 apartments for rent + re-letting

Rødovre, Erantishaven 83 apartments for rent

Solrød, Green Hills 294 apartments for rent

Brøndby, Kirkebjerg, Kobberengen 463 apartments for rent

Høje Taastrup C, Cornelia Hus 156 apartments for sale

Høje Taastrup C, Oase Husene 157 apartments for rent

Rådhus-have

EDC Poul Erik Bech continues to ride the hotel wave:

Hotels, inns, conference centres, holiday centres, hostels, and camping are moving - also on the investment front Danish tourism is experiencing a boom after corona. Danish hotels and holiday centres, in particular, can look forward to significantly more guests with a record number of overnight stays in Denmark in 2023. This affects the appetite for investment, where EDC Poul Erik Bech is experiencing great demand and attention in the hotel area, most recently with the sale of Hornbæk Hospital, which is to be transformed into a luxury beach hotel. This has resulted in the creation of a dedicated hotel group, which provides an even more structured advisory and sales process in the hotel area.

In the first half of 2023, we experienced the highest number of Danish hotel overnight stays ever. According to Statistics Denmark, there were 16.5 million overnight stays in hotels, holiday centres, hostels, campsites, and marinas in the period. This is an increase of 1.1 million compared to the first half of 2022. The hotels accounted for more than half of the total overnight stays, with foreigners, in particular, driving the development - although the Asian travellers, have not yet returned after Corona.

the figure is naturally higher. We have sold hotels, campsites, conference centres, and building rights for around the same amount after Corona, and we always have several cases on the shelves, so we definitely feel that the hotel area is taking up more and more space.” Tourism is indeed a growing area in the aftermath of Corona. Stephen Berthelsen says the following, ”We have the consulting skills, data, and experience to help our customers evaluate, set prices, and sell hotels. At EDC Poul Erik Bech, we have chosen to do

Stephen Berthelsen, partner at EDC Poul Erik Bech North Zealand, says, ”According to HORESTA, there will be around 60,000 hotel rooms in Denmark in 2024, which is a doubling in just 20 years. This corresponds to almost 1,000 hotels, inns, and conference centres in Denmark, making it a large investment area. Right now, EDC Poul Erik Bech has several hotels for sale for a total amount of around DKK 300 million, and in the entire EDC Group,

Havreholm Slot for sale: 65.000.000 DKK.

Credit: Jon Clausen/NVMBR ARCHITECTS.

more and have established a nationwide hotel group with representatives from many of our 19 commercial centres as well as our Capital Markets, Large Customers, and international department. This gives us a unique place in the market for our customers, so if you are looking to invest in or sell hotels, we can deliver a highly tested and structured advisory and sales process.”

bly makes the process as easy and smooth as possible,” says Stephen Berthelsen. ”In addition to Hornbæk Hospital, which really helped put us on the map as hotel brokers, I would also like to highlight Kobæk Strand Conference Center and Hotel Antvorskov on West Zealand. In addition, we have got Havreholm Castle and another large hotel in North Zealand, where the seller wishes to remain anonymous, for sale, so we are riding the hotel wave to a great extent.”

Unique business area requires unique knowledge According to Stephen Berthelsen, it requires unique knowledge when communicating the sale of a unique business area. He learned this in connection with the sale of Hornbæk Hospital in the second quarter of 2023:

It is not just hotels that are moving in Denmark. According to HORESTA, the Danish campsites also had a turnover of almost DKK 10 billion last year. In the summer of 2023, EDC Poul Erik Bech sold one of Europe’s best motorhome pitches on Rømø, which was offered for DKK 34 million and has received top marks in several international media. Among others, we currently have Egelund Camping in Hjørring for sale for DKK 15 million.

”Tourism is quite a unique business area and it requires unique knowledge and insight when selling hotels, holiday resorts, campsites, etc. In connection with the sale of Hornbæk Hospital, we prepared a more streamlined and detailed approach and process than before, which gave us good and useful experience in the field. We are strong in the advisory part, and have built up an extremely useful transaction and reference database, which we can use to assess and price hotels, holiday resorts, etc.”

More information

Helle Nielsen Ziersen, Partner, Head of EDC International Poul Erik Bech • +45 58588717 • hni@edc.dk

”We collaborate with Aart and Mangor &Nagel in the architectural area, Mazanti Andersen in the legal area and Beierholm in the audit area, so in this way we are well covered and can help clients all the way around, which proba-

The bottom line is growing for hotels A new member survey on the hotels’ financial situation from the industry association HORESTA shows that 2022 was a reasonable year for the Danish hotel industry. Almost 60% answer that the bottom line grew last year compared to 2019. At the same time, only 17% answer that the bottom line has shrunk. There are increasing bottom lines all over the

Stephen Berthelsen, partner, EDC Poul Erik Bech North Zealand • +45 5858 8377 • stbe@edc.dk

country, but especially hotels outside Copenhagen have experienced a positive development. 29% respond that the bottom line has improved significantly compared to 2019, while this applies to 10% of the hotels in Copenhagen. The hotels in Copenhagen are more optimistic than the rest of the country compared to last year. 81% re13

spond that they expect a significantly improved or improved bottom line when closing the accounts. The figure is 33% of hotels outside Copenhagen. The hotels also respond that they assess their overall financial situation as positive. Across all hotels, 55% respond that their financial situation is positive, while 19% rate it as very positive. Only 8% respond negatively or very negatively.

FOR SALE Hotels, restaurants, cafes, etc. Havreholm Slot (Castle)

58 58 77 09

Hotel- Spa & Sea bath in North Zealand Danmarksgade 62A, 9900 Frederikshavn Havnevej 3, Holbæk

sq m

Property

Case number

3,100

Investment

Contact Stephen Berthelsen +45 5858 8377

approx . 3,000

Investment

Contact Stephen Berthelsen +45 5858 8377

2,810

Investment

www.edc.dk/91400323

417

Investment

www.edc.dk/474012894

Skovvej 45-46, Kerteminde

2,402

Ongoing business

www.edc.dk/51203070

Torvet 8, Gråsten

2,400

User property, newly renovated and modern hotel

www.edc.dk/641011152

Egelunds Camping, Rubjergvej 21, Hjørring

2,386

Investment

www.edc.dk/91400046

Haderslevvej 462, 6200 Aabenraa

510

User property

www.edc.dk/620510018

Sct. Laurentii Vej 54, Skagen

1,050

User property

www.edc.dk/914004168

Lakolk Butikscenter 7, Rømø

968

User property (cafe & ice house)

www.edc.dk/670114008

Havnevej 14A, B & C, Skagen

291

Investment

www.edc.dk/91400376

10 hotel trends in Denmark 1. Sustainability and recycling: Increased focus on sustainability in practice, processes, products, and materials. Like many other industries, hotels’ access to loans and financing will depend on whether they do enough and report sufficiently on the ESG front. 2. Hotel apartments: Stay, CABINN Apartments & Zoku. Mini apartments with own kitchen and storage room. 3. Multifunctionality: Increasing trend to mix hotels with residential, office, retail, F&B, and serviced apartments. 4. High demand and competition for labour: Retention and recruitment of employees. Very low unemployment at home. 5. Bleisure (business + pleasure): Today’s business travellers increasingly mix business with some leisure and vice versa. Business trips are often extended before or after, and friends and family come along for the journey. The trend is particularly popular among the younger generations on the labour market. 6. Affordable luxury: Competitive prices and high quality. Focus on large common spaces that encourage socializing with other hotel guests. 7. Club atmosphere, spa, and wellness experiences: Many demand a unique and extraordinary atmosphere where you feel at home and pampered at a high-quality level. 8. Capsule hotels or cabin hotels: Type of hotel developed in Japan which consists of a lot of very small rooms (capsules or sleeping cabins) that serve as cheap and basic accommodation for guests who do not require the same standard as in more conventional hotels. They are becoming more popular with travellers looking for less expensive accommodations that still offer a private/enclosed bed and basic amenities. 9. Entertainment, cinema, joint cooking for connoisseurs: Different approaches to planning common meals with, e.g., communal gas stove, allows it to create special forms of communities that support special forms of social relations. Communal eating is healthy, new British research shows. 10. Digitization: More and more processes are being digitized to improve efficiency and give customers a choice and an overview. This is everything from booking hotel rooms, restaurant menus, bar booking, laundry etc.

Do you want to be updated on trends, KONT ORkey figures, publications, news, and EJENDOMSMARKEDET? new commercial properties? Skriv dig op på:

Scan and sign up here or at www.ejendomsnyheder.dk

Så sender vi dig en mail, når vi har nye artikler, publikationer og nyheder om markedet for kontorejendomme. Helt enkelt!

Data and in-depth analyses can pave the way for good investments The high inflation has led to rising interest rates and uncertainty in the global economy, resulting in a greater distance between sellers and buyers. In-depth analyses and data-driven knowledge can be a game-changer and point toward good investments – or, just as importantly, provide information on whether a given investment should be pursued. The Research & Analysis department at EDC Poul Erik Bech can assist with in-depth analyses based on extensive data.

One of the department’s primary tasks is to provide investors with a deep understanding of movements in the real estate market, allowing customers to make well-informed decisions when investing.

that we carry out for internal and external clients. One of our most important tasks is to assist our commercial real estate agents across the country, enabling them to provide our customers and investors with in-depth and objective analyses of the specific market. We have access to the most comprehensive property-specific data in the market—comprising publicly available data, internal data, and external sources that we dedicate substantial resources to keeping up-to-date. Therefore, we are well-equipped to deliver thorough analyses to our clients.”

Joseph Alberti, Head of Research at EDC Poul Erik Bech, explains: “Fundamentally, we serve as a classic support function with a wide range of tasks

Versatile tasks Joseph Alberti continues: “No task is too small or too large for us. Through our extensive data resources, we can help customers and investors gain insights into specific areas. We can contribute with reports and in-depth analyses on supply and demand, rental analyses, sales price analyses, demographic analyses, transaction market analyses, buyer/ seller advice (commercial due diligence), and much more.” Research and Analytical We specialize in providing tailored analyses to meet the diverse needs of both large institutional investors and private investors. Our comprehensive suite of services includes:

“Our task versatility is best described by the assignments we have completed for various companies. For example, we have assisted Clever in identifying the most ideal locations for charging stations in Denmark. We provide pension funds with in-depth and data-driven insights into all relevant aspects of project devel• Commercial Due Diligence opment, including tasks for PFA, • Thorough assessments of investment opportunities, PensionDanmark, PenSam, encompassing all relevant aspects of project developand Coop. Additionally, we ment, acquisition, and property operation. have assisted companies • Data-driven insights to support legal professionals in housing such as COPI Group court cases, ensuring a solid foundation for their arguments. and Salling Group • In-depth examinations of rental prices and actual selling prices for with analyses, owner-occupied properties, aiding clients in making informed decisions. including due • Analysis of the relationship between supply and demand in major urban diligence centers and smaller provincial towns, allowing stakeholders to grasp market dynamics. • Detailed examinations of the evolution of housing stock by ownership type in specific, defined geographic areas providing a valuable perspective on the market. • Our track record includes delivering high-quality analyses to esteemed organizations such as PFA, PensionDanmark, PenSam, Coop, COPI Group, and Salling Group. We’ve also conducted due diligence investigations for buyers evaluating potential property transactions, ensuring their investments are well-informed and secure.

various property segments in the Danish market.

on the buyer’s examination of the seller’s properties before completing transactions. A well-executed due diligence minimizes the risk of surprises and ensures that final negotiations are conducted more informedly.”

Need for knowledge in a challenged market The past few years have been challenging for the real estate market, leading institutional investors and funds to rely more on analyses and data when making investment decisions, according to Niclas Holm, Senior Research Analyst at EDC Poul Erik Bech:

The Research & Analysis department is also responsible for producing CityFact, which consists of 19 reports about a specific city or area in Denmark, created in collaboration with our local business departments across the country.

“The market has been significantly affected by the pronounced inflation and rising interest rates, which naturally directly impact profitability, as investments in illiquid assets such as properties largely rely on external financing. Consequently, transaction volume has also declined considerably in 2023, by a staggering 50% in the Nordics over the past year. The expectation is that investment activity will increase again as inflation comes under control and interest rates are expected to fall. However, uncertainties also mean a greater need for risk assessments and analyses, leading us to handle a particularly high number of tasks for institutional investors and funds who seek well-founded resources and accessible data to make better investment decisions.”

International perspective In addition to producing reports and analyses for Danish and Nordic companies, the Research & Analysis department also maintains a global perspective. The international department at EDC Poul Erik Bech collaborates with one of the world’s largest real estate firms, JLL (Jones Lang LaSalle), and the Research & Analysis department plays a vital role in this collaboration, as Joseph Alberti explains: “Our international department serves foreign clients interested in investing in Denmark and Danish clients looking to buy or lease premises abroad. Here, we often provide advice and contribute with reports and analyses about the Danish market so our international clients can gain an accurate understanding of Denmark’s position. We have a close partnership with JLL, which has entrusted us with several significant tasks. For instance, we were part of the record-breaking real estate transaction in the Nordic region in 2022, acting as buyer advisors for Brookfield as they entered the Nordic market. Additionally, they provide data to our datasets and insights from the broader world, while we offer data and insights about the Danish real estate market, including contributions to the JLL Nordic Outlook publication.”

He continues: “As an investor, it is crucial to approach an investment objectively. With an analytical approach, we allow our clients to do just that, as we help ensure that potential investments are made on the most well-founded data foundation possible. We offer area-specific analyses for the entire country, which can be tailored to each investor’s needs. Furthermore, we provide in-depth analyses of population development, housing supply, transaction volume, and more, which can assist investors in making the right decisions based on a well-founded knowledge base. So, get in touch with us, and together, we can determine how to support your investments with in-depth research and analysis in the best way possible.”

JLL publishes the Nordic Outlook report twice a year, which investigates the real estate market in the four Nordic countries: Denmark, Sweden, Norway, and Finland. EDC Poul Erik Bech contributes with data and insights about the

In the latest edition of Nordic Outlook, you can read more about when the real estate market is expected to stabilize again.

Research & Analysis If you are interested in having tailored analysis reports prepared, please contact us for a non-committal discussion on how we can assist you with analyses to support your decisions. Read more about Research & Analysis at www.edc.dk/erhverv/research

Joseph Alberti Head of Research

Niclas Holm Senior Research Analyst

joal@edc.dk +45 5858 8564

niho@edc.dk +45 5858 8564

CityFact:

An Exceptionally Useful and Relevant Analytical Tool for Investors In the property investment industry, it is crucial to have access to in-depth and accurate data when making tough decisions about where to place investments. Since its release in 2022, CityFact from EDC Poul Erik Bech has been assisting in this area, and the analytical product has proven to be a valuable resource and an essential tool for serious investors nationwide.

CityFact provides a comprehensive overview of market conditions in several of the country’s largest cities, compiling extensive area-specific knowledge and market data from all real estate segments into one analytical product. Despite its short time on the market, CityFact has been well-received nationwide by both customers and employees. Flemming Buhl, Head of Capital Markets and responsible for major clients at EDC Poul Erik Bech, says:

CityFact

“CityFact is an ingenious invention. Although it takes a lot of resources to prepare the individual analyses for the individual cities and areas, it is worth it. It helps to strengthen our professionalism and service to customers, and hence our brand. Clients are served with highly relevant information in an easy and manageable way, so it can be used to back up their decisions in the investment market. My clear view is that customers are really happy with the product, whether it is the big investors, the pension funds or the public sector.”

they anticipated. So, the product exceeds clients’ expectations.” “It’s an impressive product that truly adds value for our clients. CityFact has substantially impacted my work and left a positive impression. Naturally, if an investor is planning to build townhouses in Næstved, for instance, they would want information that strengthens their decision-making foundation straightforwardly and understandably – and CityFact certainly delivers on that front.”

CityFact provides information on vacancy rates, rental levels, return on investment requirements, population growth, age distribution, and moving activity, enabling serious investors to make well-informed and rational decisions when substantial sums of money are at stake. Emphasizing Experienced Expertise Detailed analyses are available for 19 of the country’s largest cities and areas. Flemming Buhl says:

Useful for the heaviest Investments Henrik Frost Sørensen, partner and business director at EDC Poul Erik Bech Aarhus, says: “We encounter that almost everyone considers it a valuable tool that offers great value. CityFact is especially fascinating due to it’s heavy data content and specificity at the city level. This provides truly unique insights into how a particular market looks in the specific city one wishes to invest in. Having the ability to make decisions based on well-informed grounds is a clear advantage. With CityFact, everything is handed to you on a silver platter, which gives the investment considerably more weight. This is beneficial for any investor, but it’s obvi-

“CityFact certainly demonstrates to the outside world that we truly have nationwide coverage with our 19 business centers. We hold a significant advantage over many other chains, as we have national experts working closely with our skilled local brokers and business centers. With CityFact, we emphasize our professional expertise, positioning us strongly in the market. It’s a pleasure to send CityFact reports to current and potential clients – they always respond with gratitude, as they’ve received far more than 18

Get close on the local development Are you curious about local developments or searching for specific demographic details for a particular construction project or property investment?

In selected areas, CityFact can also be ordered in English. For more information, contact bremerholm@edc.dk. Subscribe to CityFact and receive a report for the cities you’re interested in: www.poulerikbech.dk/cityfact

CityFact consolidates relevant market conditions into one analytical product. Thus, obtaining a comprehensive overview of local market conditions has never been easier. Gain a current status on vacancies, rental levels, return requirements, and data on demographic trends, including population growth, age distribution, relocation activity, and trends within the workforce for specific market areas with data right down to the city level.

If you need consultation regarding an investment project and are interested in obtaining tailored analytical reports, contact Joseph Alberti, Head of Research at EDC Poul Erik Bech, +45 5858 8564, joal@edc.dk

ous that the larger the amounts involved, the more knowledge one desires about the area in which they are investing.” Tailored Reports Joseph Alberti, Head of Research at EDC Poul Erik Bech, says: “With our analytical product, CityFact, we provide investors and decision-makers with a more enlightened basis. However, if you need to make a specific decision concerning construction projects or property investments, we always recommend reaching out to our local business center or our team in Research & Analysis so we can discuss your analytical needs. We can create tailored reports that can assist you in making decisions based on your specific project.”

2023 DIN BY

CITYFACT

2023

DANSK VERSION

More information EDC Poul Erik Bech

Flemming buhl Head of Capital Markets, responsible for major clients flb@edc.dk • +45 5858 8572

Henrik Frost Sørensen Partner, Business Director, Aarhus hfs@edc.dk • +45 5858 8670

Joseph Alberti Head of Research joal@edc.dk • +45 5858 8564

C. F. Møllers Have

156 apartments with a focus on community to be rented out in Ørestad C.F. Møllers Have, a new housing project in Ørestad, will soon be ready for the new residents to move in in mid-December 2023. The housing project distinguishes you from other projects by focusing on community, including the establishment of co-working space, common rooms and communal laundry. The former STAD Project was given the task of renting out, and since STAD Project became part of EDC Project Poul Erik Bech in the spring of 2023, EDC Project Poul Erik Bech will be responsible for renting out the 156 apartments of between 59-95 m².

Skanska, who has built several properties in Ørestad, is nearing the completion of 156 rental apartments in Ørestad. The project is an eight-story U-shaped building with a total floor area of 12,140 m². Carsten Bjørneboe, Project Manager at Skanska, says:

DGNB Gold certification for the building, indicating special considerations were made for the environment, surroundings, and economy during the construction and operation. This includes using recycled materials in communal areas, the installation of solar panels on the building, and then there are all our initiatives to establish an even stronger sense of community among the residents.”

“The project began back in 2019, when the area was part of a larger agreement with By & Havn, resulting in the establishment of a large two-level parking basement with space for 125 cars beneath the apartments. The parking basement is leased to By & Havn and is part of the overall public parking solution in Ørestad.”

Community as a primary focus The intention with C.F. Møller’s Garden is for the project to stand out from other housing projects by placing an even greater emphasis on community, Carsten Bjørneboe says: “Sharing economy and community are some of the most significant parameters for home seekers at the moment, which is why we’ve designed the project with that in mind. For instance, we’ve created a co-working space instead of two apartments, ensuring residents have suitable home-working conditions. Furthermore, we’ve established a communal laundry room instead of having a washing machine and dry-

He continues, “We conducted an analysis that indicates a high demand for smaller apartments specifically in Ørestad and, for that matter, in many parts of Copenhagen. Many of the apartments in Ørestad are 4-5-room units, so we have constructed 2, 3, and a few 4-room apartments, primarily targeting singles and young couples. We have achieved a

More information Christoffer Kielgast, project leader and real estate agent, EDC Project Poul Erik Bech +45 5858 8487 • chki@edc.dk

Read more at

www.sluseholmen.dk

More information Kenneth Nielsen, senior advisor, partner, real estate agent • EDC Project Poul Erik Bech +45 5858 8487 • kni@edc.dk Alexander Danielsen, project leader, real estate agent EDC Project Poul Erik Bech +45 5858 8487 • ada@edc.dk

First youth apartments at Kvægtorvet in Slagelse ready for occupancy EDC Project Poul Erik Bech has been chosen to manage the rental of 324 DGNB-gold-certified apartments, 224 youth apartments and 100 family apartments, constructed by PFA Ejendomme.

Old industrial area in the center of Slagelse Kvægtorvet is a large former industrial area characterized by manufacturing companies, large slaughterhouses, and a gas plant. Sven Lyse, partner at EDC Poul Erik Bech, says:

The construction of a large housing development project at Kvægtorvet in Slagelse is proceeding as planned, and EDC Project Poul Erik Bech has been chosen to rent out the apartments. The first phase, which consists of 30 family apartments and 8 terraced houses, is underway, and the rental of the first youth apartments is set to start shortly. Peter Morgan, Investment Director at PFA Ejendomme, says:

“Kvægtorvet is an almost 90,000 m² area that in the past was a hub for the trade of food in Western Zealand. The area is perfectly suited for a residential area with a short distance to Slagelse Station, Campus Slagelse, and Slagelse City Center. Slagelse has become a popular place to live with good educational institutions and a great environment for family life. Housing projects are therefore essential for Slagelse’s continued development.”

“The construction at Kvægtorvet is going according to plan, and the first apartments will be ready soon. The test apartment has been furnished and shown at the open houses, and we expect the first phase of the apartments to be ready for occupancy during the fall. We have teamed up with EDC Project Poul Erik Bech, with whom we have had good experiences in the past. Most importantly, EDC Poul Erik Bech has an independent unit in Slagelse, which has great insight into the local community.”

Bjørn Gervø, project manager at EDC Project Poul Erik Bech, says: “We are incredibly pleased to be given the task of renting out the apartments in Slagelse for PFA Ejendomme. It’s a large and compelling rental housing project with great potential, appealing to all age groups. We look forward to seeing the project completed and observing the development in Slagelse. We are experiencing great demand for the apartments and are eager to rent out the youth apartments, ranging from 32-44 m² with a monthly rent starting from 4,290 DKK per month. The terraced houses are 98-108 m² with a rent of 11,650-11,950 DKK per month, so the prices are far more competitive than in Copenhagen.”

Sustainable homes for all stages of life The rental of the first phase’s 30-family homes and 8 terraced houses is proceeding as planned, and only a few are available. The rental of the first youth apartments began in August. Peter Morgan says: “It’s a district for all generations with homes for every stage of life. From youth apartments, large and small family homes to senior housing and even a free nursing home, it’s a good mix of generations that can create good dynamics and cross-generational relationships. There’s a strong focus on ESG and sustainability in the real estate industry, which is also emphasized in the new district in Slagelse. We have worked extremely hard to minimize the CO2 footprint to achieve the DGNB Gold certification. Furthermore, we want to symbolize that this should be Slagelse’s green district with green spaces in the area.”

More information Sven Lyse, partner, director, EDC Poul Erik Bech Slagelse +45 5858 8396 • sly@edc.dk Bjørn Gervø, partner, project director, real estate agent EDC Poul Erik Bech Roskilde +45 5858 8395 • bge@edc.dk

FOR SALE Investment property – with a reliable tenant and a great rate of return Unique investment property ideally located in a large business area. The trend is developing towards larger car dealerships that can offer an experience and match the new technologies shaping the industry– this property has it all and fits this trend. The property is leased to an unquestionably reliable tenant with a 7-year commitment, and the current tenant has long-term plans for the future. The property was built in 2005 and is in good condition. There’s potential to subdivide the land or construct another building. It is possible that it can be purchased without the land – land value 6.9 million DKK. Bilbyen 1, 4300 Holbæk Case number: www.edc.dk/40302169 Site area/Floor area: 35,826 m²/5,458 m² Rate of return: 6.65% Price: 82,000,000 DKK.

ALE

Contakt: John Borrisholt, Director, Partner EDC Poul Erik Bech, +45 5858 8395

Commercial site of 27,737 m² for commercial construction in Trekroner in Roskilde Municipality The site is located close to Trekroner Station, a short distance from the highway, and surrounded by residential areas. There’s potential to construct office/hotel buildings and similar. There is a sketch design for the site, which can either be taken over by the buyer or the current owner, who can manage the construction of the project and deliver it to the buyer. The project includes a grocery store, specialty shops, a fitness center, and office spaces. The project has not been approved as it is, but Roskilde Municipality has indicated that they are positive towards it. Nordre Mellemvej 51, 4000 Roskilde Case number: www.edc.dk/403600129

Project opportunity

Site area: 27,737 m² Price: 62,500,000 DKK.

Planned parking

ALE

S OR

Contact: Kenneth Wagner, Partner Business, Valuar MDE, EDC Poul Erik Bech, +45 5858 8395

Investment opportunity with 2 properties in Hjørring – a total of 41 residential apartments Sct. Knuds Plads 14-16 is conveniently located in a quiet residential neighborhood and consists of 2 tower houses with 26 well-designed apartments, averaging 86 m² in size, with the majority being 3-room apartments. Each apartment has access to its own garden or balcony and an elevator. The construction was completed in 2019. Svanelundsbakke 11-17 comprises one-half of an angled building close to the most visited park in the town, ”Svanelunden”. The property consists of 15 apartments in excellent condition, where there has been drawn a lot of attention to layout and details. The construction was completed in 2020. Sct. Knuds Park 14-16 & Svanelundsbakken 11-17, 9800 Hjørring Case number: www.edc.dk/914004180

ALE

Floor area: 3,635 m2 Rate of return: 4.75% Price: 77,000,000 DKK. Contact: Michael Stilling, Partner, Real Estate Agent & Certified Valuer, MDE, EDC Poul Erik Bech, +45 5858 8449

FOR SALE/SOLD Well-located and exclusive properties with mixed residential and commercial spaces Three almost fully leased properties with a good history and stable tenants. Together, they comprise 22 residential units and 8 commercial units and are situated in one of Brønderslev’s prime locations. The properties were built in 2006, 2007, and 2008 and are constructed with high architectural quality and materials that ensure low ongoing maintenance. The three sites surrounding the property can be purchased, offering a combined building opportunity of approximately 2,348 m². The sites are located at Torvet 24, Torvet 30, and Tygelsgade 5. Algade 57 and other, 9700 Brønderslev Case number: www.edc.dk/912110967 Floor area: 4,480 m² Rate of return: 6.26% Price: 64,685,000 DKK.

ALE

S OR

Contact: Frederik Larsen, Business advisor EDC Poul Erik Bech, +45 5858 8449

Property portfolio consisting of 11 properties in Haderslev On behalf of Christianlyst A/S, EDC Poul Erik Bech is now offering this attractive property portfolio consisting of 11 investment properties, all located either in the center of Haderslev or near the city center, with several properties at attractive addresses. The properties appear in excellent and well-maintained condition and are offered as one single sale. A company transaction would be ideal. There are 50 residential units and 9 commercial units with a current rental income of 2.7 million DKK. Slagtergade 38-42 and other - Portefolio, 6100 Haderslev Case number: www.edc.dk/62001255

Floor area: commercial/housing: 646 m2/3,774 m² Rate of return: 5.27% Price: 35,000,000 DKK.

ALE

Contact: Morten Dahl Rask, Director, Partner, EDC Poul Erik Bech, +45 5858 8425

Investment property with cultural heritage and historical charm sold for 55 million DKK. EDC Poul Erik Bech has facilitated the sale of the heritage property at Nikolaj Plads in Copenhagen K. The 1,441 m² property, with a mix of residential and commercial spaces, has been sold to a private investor who plans to develop the building as rental spaces become available. Nikolaj Plads 27 is a beautiful, well-maintained corner property with an entrance facing Nikolaj Plads and Admiralgade. The property was built in 1800, spanning three floors with three commercial rentals, four residential rentals, and a utilized basement. Contact: Helge Rud Larsen, commercial real estate agent, EDC Poul Erik Bech, +45 5858 8378

FOR RENT/RENTED OUT Sublease of 6,000 square meters in a state-of-the-art office building in Gladsaxe Nice and bright office spaces in this impressive office building in Gladsaxe, where no expenses have been spared on facilities and interior. Good, shared facilities include a delightful cafeteria, fitness center, coffee services, and a spacious, stylish lounge area that pampers employees during their daily work routine. The property has everything which sets it apart from other office rentals. The property has a beautiful location in Søborg, just one kilometer from the Hillerød motorway, which makes transportation easy and readily accessible for employees, clients, and partners. Excellent parking conditions are available, with one parking space allocated for every 30 square meters of leased space.

REN

TED

Contact: Thomas Rudlang, Partner, Real Estate Agent & Certified Valuer, MDE EDC Poul Erik Bech, +45 5858 8376

The Defense is renting a large warehouse in Northern Jutland for the new Nordic uniform system The Defense’s new uniform system, a joint Nordic project, will now have a consolidated and efficient central warehouse in Denmark. The Defense has leased 15,000 square meters of storage and logistics property in Pandrup. From here, they can efficiently pick, pack, and distribute uniforms to the supply centers so that employees can be outfitted locally. The first delivery includes 12,000 uniform sets, and a total of 36,000 personnel will be equipped. The new storage and logistics property is expected to be operational by 2024.

O TED

Contact: Michael Stilling, Real Estate Agent & Certified Valuer, MDE, EDC Poul Erik Bech, +45 5858 8449

REN

Beautiful retail property on the pedestrian street in Roskilde Lovely and well-maintained commercial property on the pedestrian street in the center of Roskilde. The property offers good development opportunities and can, for example, be converted from a shop to an office, clinic, or possibly residential space. Tenants cover operational costs through square meter-based allocation. The property enjoys excellent visibility on the pedestrian street with large window fronts for displays. It has a total commercial area of 1,637 square meters, divided into two shops of 509 square meters and 1,164 square meters. Vacancy rate area for the owner’s own use or re-rental. Skomagergade 32A, 4000 Roskilde Case number: www.edc.dk/403600018

Floor area: 1,673 m² Afkast: 5.52% Price: 39,000,000 DKK.

ALE

Contact: Brian Skov Andersen, Partner EDC Poul Erik Bech, +45 5858 8395

Are you considering selling your commercial property? As a property owner, you may have considered whether now is the right time to sell. Are you thinking about selling but are concerned about the uncertain market? We have the solution! Now, you can freely track the interest in your property. No sales, no contracts, and no obligations. With “Send-my-buyer” you’ll be notified whenever we have potential buyers in our database that match your property. Of course, you remain anonymous to any potential buyer and can decide on your own if you want to make contact. Simple as that.

You can also sign up at www.sendminkøber.com

MARKET Update

Office Industrial Rates International Poul Erik Bech

Yield

Market rent

Employment GDP growt Availability

Residential rental

Consumer confidence

2023

Retail

Executive summary – 3nd quarter The economy has performed better than expected, and this indicates that Denmark will avoid a recession. Inflation has fallen significantly, and Denmark now has the second lowest level of inflation in the EU. Employment is still rising, although not as fast as earlier in the year. One of the few negative indicators is consumer confidence, which is still negative, as it has been since the end of 2021. These positive economic conditions support the business activity, and there is still a high level of occupier activity for renting retail, offices, and industrial and logistics properties. Vacancies for all three property types have increased slightly, however. For all property types, it should be noted that the vacancy rate is very low in a historical context, and due to the relatively low expectations for the economy in the second half of 2023, we expect the vacancy rate to rise slightly in the coming quarters. The transaction volume for commercial real estate is significantly lower than last year, which is mainly due to the high interest rates. However, there are signs that a stabilization of interest rates is underway, moreover, the central banks have announced that the peak is about to be reached. The yield requirements for several property types and in multiple geographical areas have increased slightly since last quarter. However, in line with stabilizing interest rates, the expectations for yield requirements in 12 months have changed from increasing to stable in many places.

Would you like to receive the Market Update directly in your mailbox, sign up here: edc.dk/erhverv/marketupdate

›

The Danish economy Annual GDP growth 8% 7%

6% 4% 3% 2%

2025

2024

0% -2%

-2%

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

-4%

Real growth in BNP compared to previous year (%) Expected real growth in BNP compared to previous year (%)

After two years of strong growth in GDP of 4.9 percent and 3.8 percent in 2021 and 2022, respectively, there are now prospects for a growth slowdown. The preliminary calculation of GDP growth for 2023 is 1.7 percent. The lower GDP growth can be linked to a reduced private consumption due to rising interest rates and a reduced purchasing power from a historical high inflation. The latest forecast from Danmarks Nationalbank shows an expected growth of 1.3 percent in both 2024 and 2025. The forecast for GDP this year is higher than the last forecast indicating that the risk of a mild recession has been averted. This can be linked to a high foreign demand, which is most likely associated with the noticeable production increase in the pharmaceutical industry. The forecast for GDP next year is 0.1 percentage points higher than the last forecast. Source: Statistics Denmark & Nationalbanken

Interest rates In the first half of 2023, the development in interest rates has been more stagnant compared to 2022, where interest rates increased significantly. This is due to a more moderate development in inflation, which has been particularly driven by a decrease in energy costs. The short mortgage rate, which is closely correlated the monetary policy actions of the Federal Reserve (FED) and the European Central Bank (ECB), has undergone a more subdued development and stands at 3.6 percent in September 2023. The long mortgage rate has been more volatile in 2023 and stands at 5.3 percent in September 2023.

6% 5% 4% 3% 2% 1% 0%

Source: Finance Denmark & Statistics Denmark

Short-term mortgage rate

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

-1%

Long-term mortgage rate

Consumer confidence indicator 20 10 0 -10 -20 -30

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

-40

Consumer confidence indicates the population’s view of its current and future economic situation and is thus a good indicator of how the general population is affected by Denmark’s economic situation. Consumer confidence in September is at minus 13.0 and has thus fallen since July, when it was at minus 10.1. Prior August, consumer confidence has been steadily increasing since October 2022 when consumer confidence reached its lowest point at minus 37.0. The average for 2023 is minus 16.9. Four out of five indicators that together make up consumer confidence have risen since last month. The judgement of the current situation has become more negative, and the expectation of the future economic situation has fallen, which play a big role in the aggravated consumer confidence.

Source: Statistics Denmark

Employees The latest figures from Statistics Denmark from July 2023 show a slight increase in the number of employees of 229 persons corresponding to an increase of 0.01 percent compared to June. The number of employees increased especially in the sectors Companies and organizations by approx. 800 persons but is counteracted by a fall of 600 persons in the sector Public administration and service. With 41,007 new employees since July 2022, employment remains at peak levels. However, the pressure on the labor market is easing with the growth slowdown in the Danish economy.

3.0 Million

2.9

2.8

2.7

2.6

Source: Statistics Denmark 2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2.5

Residential rental newer properties

Area* (see specifications page 42)

Capital of Denmark

Central Copenhagen

Østerbro, Frederiksberg and Gentofte

Harbour areas

Ørestad

Remaining Copenhagen

Western suburbs

Remaining Zealand

Northern suburbs

North Zealand

East Zealand

West Zealand

South Zealand

Lolland, Falster and Møn

Odense

Other Funen

Southern Denmark

Vejle

Kolding

Fredericia

Esbjerg

Sønderborg

Other South Jutland

Central Jutland

Aarhus

Silkeborg

Viborg

Herning

Northern Jutland

West Jutland

Aalborg

Hjørring

Frederikshavn

Prime Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m

Secondary

Tertiary

Trend 

4.00%

4.25%

4.50%

2,550 DKK

2,200 DKK

2,000 DKK



4.00%

4.25%

4.50%



2,450 DKK

2,100 DKK

1,950 DKK

 

4.00%

4.25%

4.50%

2,400 DKK

2,000 DKK

1,800 DKK



4.25%

4.50%

5.00%



1,900 DKK

1,800 DKK

1,700 DKK



4.25%

4.50%

5.00%



2,300 DKK

2,000 DKK

1,800 DKK



4.50%

5.00%

5.25%



1,750 DKK

1,600 DKK

1,500 DKK



4.25%

4.75%

5.00%



2,000 DKK

1,750 DKK

1,500 DKK



4.50%

5.00%

6.00%



1,900 DKK

1,650 DKK

1,400 DKK



4.50%

5.00%

6.50%



1,900 DKK

1,600 DKK

1.300 DKK



5.50%

6.75%

8.00%



1,500 DKK

1,300 DKK

1,000 DKK



5.25%

6.25%

7.50%



1,350 DKK

1,100 DKK

950 DKK



5.75%

6.75%

8.00%



1,200 DKK

950 DKK

800 DKK



4.50%

5.00%

5.50%



1,450 DKK

1,275 DKK

1,100 DKK



5.25%

5.75%

6.50%



1,250 DKK

1,100 DKK

950 DKK



5.00%

5.50%

6.25%



1,375 DKK

1,175 DKK

1,000 DKK



5.50%

6.00%

6.75%



1,300 DKK

1,150 DKK

950 DKK



5.50%

6.00%

6.75%



1,250 DKK

1,100 DKK

875 DKK



5.25%

6.00%

7.00%



1,200 DKK

900 DKK

750 DKK



6.00%

7.00%

7.50%



1,150 DKK

900 DKK

750 DKK



6.00%

7.00%

7.50%



1,100 DKK

800 DKK

675 DKK



4.25%

4.75%

5.25%



1,850 DKK

1,600 DKK

1,350 DKK



4.75%

5.75%

7.25%



1,400 DKK

1,050 DKK

950 DKK



5.25%

6.25%

7.25%



1,125 DKK

1,000 DKK

850 DKK



5.00%

5.75%

7.00%



1,200 DKK

1,050 DKK

900 DKK



5.50%

6.50%

8.00%



1,200 DKK

850 DKK

750 DKK



4.50%

5.00%

5.75%



1,400 DKK

1,150 DKK

950 DKK



5.25%

6.50%

7.25%



1,150 DKK

950 DKK

775 DKK



5.75%

6.75%

7.50%



1,050 DKK

850 DKK

650 DKK



Source: EDC International Poul Erik Bech, estimates as of Q3 2023

Yield in %, annual market rent in DKK/sq m incl. operating expenses and trends for the next 12 months

Residential rental fully developed properties

Yield in %, annual rent in DKK/sq m incl. operating expenses and trends for the next 12 months

Central Copenhagen

Østerbro, Frederiksberg and Gentofte

Remaining Copenhagen

Western suburbs

Northern suburbs

Prime Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in %

Remaining Zealand

Annual rent in DKK/sq m North Zealand

East Zealand

West Zealand

South Zealand

Lolland, Falster and Møn

Odense

Other Funen

Southern Denmark

Vejle

Kolding

Fredericia

Esbjerg

Sønderborg

Other South Jutland

Aarhus

Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in %

Central Jutland

Viborg

Northern Jutland

West Jutland

Aalborg

Hjørring

Frederikshavn

Trend 

4.00%

4.25%

4.50%

1,800 DKK

1,650 DKK

1,500 DKK



4.00%

4.50%

4.75%



1,750 DKK

1,650 DKK

1,550 DKK

 

4.25%

4.50%

5.00%

1,700 DKK

1,600 DKK

1,500 DKK



4.75%

5.25%

6.00%



1,600 DKK

1,525 DKK

1,225 DKK



4.50%

5.00%

1,500 DKK

1,350 DKK

5.75%



1,225 DKK

 

4.75%

5.00%

6.00%

1,500 DKK

1,350 DKK

1,250 DKK



4.50%

5.25%

7.00%



1,600 DKK

1,300 DKK

1,000 DKK



5.25%

6.50%

7.50%



1,150 DKK

900 DKK

750 DKK

 

5.25%

6.25%

7.75%

1,200 DKK

900 DKK

700 DKK



6.00%

7.50%

8.50%



1,000 DKK

825 DKK

725 DKK



4.75%

5.00%

5.75%



Annual rent in DKK/sq m

900 DKK

875 DKK

800 DKK



Yield in %

5.75%

6.25%

7.50%



Annual rent in DKK/sq m

825 DKK

725 DKK

600 DKK



Yield in %

5.25%

6.00%

6.50%



1,125 DKK

975 DKK

800 DKK



Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in %

5.75%

6.25%

7.00%



1,175 DKK

1.000 DKK

850 DKK

 

5.75%

6.25%

7.25%

1,175 DKK

975 DKK

800 DKK



5.00%

6.25%

7.50%



1,050 DKK

725 DKK

550 DKK

 

5.75%

6.75%

7.75%

1,000 DKK

950 DKK

750 DKK



Yield in %

6.00%

7.25%

8.25%



Annual rent in DKK/sq m

950 DKK

750 DKK

625 DKK



Annual rent in DKK/sq m

Yield in %

Yield in % Annual rent in DKK/sq m Yield in %

5.00%



4.00%

4.50%

1,575 DKK

1,350 DKK

1,200 DKK



4.75%

5.75%

7.25%



1,350 DKK

900 DKK

650 DKK



8.25%



5.75%

7.00%

1,100 DKK

850 DKK

650 DKK



5.25%

6.25%

7.25%



1,150 DKK

925 DKK

750 DKK



6.00%

7.25%

9.00%



1,100 DKK

750 DKK

650 DKK



4.50%

5.25%

6.25%



1,250 DKK

1,100 DKK

900 DKK



Yield in %

5.75%

6.50%

7.75%



Annual rent in DKK/sq m Herning

Tertiary

Yield in %

Annual rent in DKK/sq m

Annual rent in DKK/sq m Silkeborg

Secondary

Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m

Annual rent in DKK/sq m

900 DKK

800 DKK

700 DKK



Yield in %

6.25%

7.00%

8.00%



Annual rent in DKK/sq m

850 DKK

750 DKK

625 DKK



Source: EDC International Poul Erik Bech, estimates as of Q3 2023

Capital of Denmark

Area* (see specifications page 42)

Residential rental cost determined rental properties

Northern Jutland

Central Jutland

Southern Denmark

Remaining Zealand

Capital of Denmark

Area* (see specifications page 42)

Prime

Secondary

Tertiary

Trend

Central Copenhagen

Yield in %

1.25%

2.00%

2.75%



Østerbro, Frederiksberg and Gentofte

Yield in %

1.50%

2.00%

2.75%



Remaining Copenhagen

Yield in %

2.50%

3.00%

3.50%



Western suburbs

Yield in %

3.00%

3.75%

4.50%



Northern suburbs

Yield in %

2.75%

3.50%

4.25%



North Zealand

Yield in %

4.00%

4.75%

5.75%



East Zealand

Yield in %

4.00%

5.00%

6.50%



West Zealand

Yield in %

5.00%

6.25%

7.00%



South Zealand

Yield in %

5.00%

6.00%

7.25%



Odense

Yield in %

3.50%

4.50%

5.25%



Other Funen

Yield in %

5.25%

5.50%

7.00%



Vejle

Yield in %

5.00%

5.50%

6.00%



Kolding

Yield in %

5.00%

5.50%

6.50%



Fredericia

Yield in %

5.50%

6.00%

7.00%



Esbjerg

Yield in %

5.00%

5.50%

6.50%



Sønderborg

Yield in %

5.50%

6.00%

6.50%



Other South Jutland

Yield in %

5.25%

6.25%

7.25%



Aarhus

Yield in %

2.50%

3.75%

5.25%



Silkeborg

Yield in %

4.50%

5.25%

7.00%



Viborg

Yield in %

5.25%

6.00%

7.75%



Aalborg

Yield in %

3.25%

4.50%

5.75%



Hjørring

Yield in %

5.25%

6.00%

7.00%



Frederikshavn

Yield in %

5.75%

6.75%

7.50%



Source: EDC International Poul Erik Bech, estimates as of Q3 2023

Yield in percent and trends for the next 12 months

The development of residential rental properties Rising interest rates, inflation, and, notably, the new property taxes are expected to contribute to declining prices in the owner-occupied housing market in the coming year. Particularly regarding the new property taxes, there will be significant geographical differences. While housing prices are generally expected to fall in the largest cities, especially condominiums, there is expected to be upward pressure on prices from the new property taxes in rural areas, where many places are expected to see significant tax reductions. For homeowners with adjustable-rate mortgages, interest rate increases have already resulted in significantly higher monthly payments. Additionally, it will become more challenging for first-time buyers to enter the housing market due to higher financing requirements that are not offset by corresponding price drops. This development may lead more individuals to choose to rent a home, as it is currently relatively more attractive to rent than to buy.

The demand for rental properties has significantly decreased during 2023, highlighted by a decline in transaction volume of about 80% between the first half of 2022 and the first half of 2023. The decrease in transaction volume has been driven by recent years’ inflation and interest rate increases, as well as general uncertainties. This has led to a considerable increase in yield requirements among buyers, while sellers have been slow to adjust their yield requirements to the new market situation. Overall, yield requirements are still lower in Denmark than in the surrounding countries, partly because Danish property investors have a more robust financing structure, making them less sensitive to interest rate fluctuations compared to investors in the Swedish market. Therefore, many investors have the option to hold onto their properties rather than accepting a significant price drop. Despite significant construction activity in recent years, vacancy rates remain relatively low on a national level. Rising interest rates, combined with higher uncertainty, make it more difficult to achieve the same level of leverage as before. This is expected to lead to a slowdown in the number of new projects in the coming years, which could potentially help keep vacancy rates low, especially in areas that have experienced an oversupply of housing after several years of high construction activity.

The vacancy rate for housing on a national level was 4.2% for the second quarter of 2023, which corresponds to an increase in vacancy of 0.8 percentage points compared to the same quarter the previous year. Market rents are expected to remain stable to slightly increasing in the coming year, while yield requirements are expected to remain stable around current reported levels. The expectation of stable yield requirements is partly due to the prospect of falling interest rates around the end of 2024, which naturally improves the conditions for the transaction market.

Office Area* (see specifications page 42)

Capital of Denmark

Central Copenhagen

Østerbro, Frederiksberg and Gentofte

Harbour areas

Ørestad

Remaining Copenhagen

Western suburbs

Remaining Zealand

Northern suburbs

North Zealand

East Zealand

West Zealand

South Zealand

Lolland, Falster and Møn

Odense

Other Funen

Southern Denmark

Vejle

Kolding

Fredericia

Esbjerg

Sønderborg

Other South Jutland

Central Jutland

Aarhus

Silkeborg

Viborg

Herning

Northern Jutland

West Jutland

Aalborg

Hjørring

Frederikshavn

Secondary

Tertiary

Trend 

3.75%

4.50%

5.25%

2,650 DKK

1,800 DKK

1,450 DKK



4.00%

4.75%

5.75%



2,350 DKK

1,600 DKK

1,350 DKK

 

3.75%

4.50%

5.75%

2,700 DKK

1,850 DKK

1,600 DKK



4.50%

5.00%

6.25%



2,050 DKK

1,600 DKK

1,450 DKK



4.50%

5.50%

6.50%



1,900 DKK

1,350 DKK

1,000 DKK

 

5.25%

7.25%

9.75%

1,400 DKK

850 DKK

600 DKK



4.75%

5.75%

8.75%



1,625 DKK

1,350 DKK

750 DKK



5.25%

6.25%

8.75%



1,425 DKK

1,025 DKK

700 DKK



6,25%

7.25%

10.50%



1,400 DKK

900 DKK

450 DKK



6.50%

8.50%

10.50%



1,150 DKK

700 DKK

350 DKK

 

7.00%

8.25%

10.75%

1,000 DKK

700 DKK

350 DKK



Yield in %

7.25%

9.00%

11.00%



Annual market rent in DKK/sq m

850 DKK

650 DKK

400 DKK



Yield in %

5.50%

6.50%

8.50%



1,550 DKK

1,000 DKK

650 DKK

 

Annual market rent in DKK/sq m

Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in %

6.50%

8.00%

9.50%

1,200 DKK

800 DKK

400 DKK



6.00%

7.50%

9.50%



1,450 DKK

950 DKK

550 DKK



6.50%

7.75%

9.75%



1,400 DKK

800 DKK

450 DKK



6.50%

8.25%

10.00%



1,350 DKK

900 DKK

500 DKK



7.00%

8.50%

10.00%



1,400 DKK

800 DKK

450 DKK

 

7.50%

9.00%

10.50%

1,150 DKK

700 DKK

400 DKK



Yield in %

8.00%

9.50%

11.75%



Annual market rent in DKK/sq m

900 DKK

700 DKK

400 DKK



Yield in %

4.75%

5.75%

8.00%



1,950 DKK

1,450 DKK

800 DKK

 

Annual market rent in DKK/sq m

Annual market rent in DKK/sq m Yield in %

6.25%

7.25%

9.25%

1,300 DKK

700 DKK

450 DKK



Yield in %

6.75%

7.50%

9.25%



Annual market rent in DKK/sq m

975 DKK

600 DKK

400 DKK



Yield in %

6.50%

7.50%

9.25%



Annual market rent in DKK/sq m

1.150 DKK

700 DKK

425 DKK



Yield in %

7.00%

8.25%

10.25%



Annual market rent in DKK/sq m

850 DKK

500 DKK

350 DKK



Yield in %

5.75%

6.50%

7.50%



1,300 DKK

900 DKK

600 DKK

 

Annual market rent in DKK/sq m

Annual market rent in DKK/sq m Yield in %

7.00%

8.00%

11.00%

1,000 DKK

650 DKK

400 DKK



Yield in %

7.50%

8.50%

11.00%



Annual market rent in DKK/sq m

850 DKK

500 DKK

350 DKK



Annual market rent in DKK/sq m

Source: EDC International Poul Erik Bech, estimates as of Q3 2023

Yield in %, annual market rent in DKK/sq m incl. operating expenses and trends for the next 12 months

The development of office properties Demand for attractive office properties has been high during 2022, with several larger transactions taking place at low yield requirements. The high demand has been driven in part by a robust job market characterized by record-high employment. However, several forecasts indicate declining employment by up to 22,000 people in the last half of 2023 and the first half of 2024, making the future outlook less certain. Such a development can result in significant consequences for the segment and, consequently, lower demand for office space. This trend has already had an impact on transaction activity, which has significantly declined this year.

to speculate on the implementation timeline of legislation related to energy efficiency standards. In general, it is expected that the value of certified properties, such as those with DGNB certification, will eventually exceed the value of uncertified properties, supported by international research. Whether certified properties should be traded at a lower risk premium or if the risk premium should be greater for uncertified properties is more uncertain. Supporting this trend is the fact that larger companies are increasingly demanding certified spaces due to their ESG profiles, as the building stock has a significant carbon footprint. At the same time, increased regulation at both the national and European levels is expected to have significant consequences for properties that are not certified. The trends are also expected to be reflected in the demand for certifying existing building stock, which will require significant investment in order to reduce the ongoing carbon footprint of existing buildings.

Companies continue to demand flexible office solutions due to increased focus on remote work and scalability. This is primarily the case in Copenhagen, where there is a large supply of flexible concepts, while in Aarhus, for example, there is demand but limited supply, especially in the city center where demand for office space is highest. However, there are also trends pointing in the opposite direction, both internationally and locally, where several companies have established policies regarding the number of remote workdays in order to bring employees back to the office.

The vacancy rate for offices nationwide was 4.95% for the third quarter of 2023. Vacancy has decreased by 0.6 percentage points compared to the same quarter the previous year, and there is currently no trend towards increasing vacancy. Yield requirements are expected to be stable over the coming year, which also applies to market rents.

In addition to flexibility, both tenants and investors increasingly seek modern and sustainable office spaces that are future-proof. The expectation is that the market will continue

Available office space as a percentage of building stock

Source: Ejendomstorvet-ED Statistikken, estimates as of Q3 2023

14% 12% 10% 8% 6% 4% 2%

Capital Region of Denmark

Region Zealand

Region of Southern Denmark

Central Denmark Region

North Denmark Region

Denmark, total

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

Retail Yield in %, annual market rent in DKK/sq m incl. operating expenses and trends for the next 12 months

Strøget

Capital of Denmark

Central Copenhagen

Østerbro, Frederiksberg and Gentofte

Harbour areas

Ørestad

Remaining Copenhagen

Western suburbs

Remaining Zealand

Northern suburbs

North Zealand

East Zealand

West Zealand

South Zealand

Lolland, Falster and Møn

Odense

Other Funen

Southern Denmark

Vejle

Kolding

Fredericia

Esbjerg

Sønderborg

Other South Jutland

Central Jutland

Aarhus

Silkeborg

Viborg

Herning

Northern Jutland

West Jutland

Aalborg

Hjørring

Frederikshavn

Secondary

Tertiary

Trend

3.75%

4.50%

5.00%



19,500 DKK

11,000 DKK

6,000 DKK

 

5.00%

5.75%

6.25%

4,750 DKK

2,500 DKK

1,750 DKK

 

5.25%

6.00%

7.00%

4,000 DKK

2,250 DKK

1,400 DKK



5.00%

5.75%

6.25%



2,750 DKK

1,800 DKK

1,500 DKK



5.50%

6.25%

7.00%



2,400 DKK

1,750 DKK

1,500 DKK

 

5.50%

6.25%

7.50%

3,000 DKK

1,750 DKK

1,000 DKK



5.75%

7.25%

9.25%



2,500 DKK

1,500 DKK

800 DKK



5.25%

6.50%

8.00%



4,500 DKK

2,000 DKK

1,000 DKK



5.50%

7.00%

8.75%



3,500 DKK

1,700 DKK

750 DKK



5.75%

7.25%

8.75%



2,900 DKK

1,400 DKK

900 DKK

 

6.50%

7.75%

9.75%

1,700 DKK

950 DKK

500 DKK



6.50%

7.75%

9.75%



1.600 DKK

900 DKK

500 DKK



Yield in %

8.00%

9.50%

11.00%



Annual market rent in DKK/sq m

900 DKK

700 DKK

400 DKK

 

Annual market rent in DKK/sq m

Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m

6.00%

7.00%

8.25%

5,250 DKK

2,500 DKK

650 DKK



6.50%

7.50%

10.25%



2,100 DKK

1,250 DKK

500 DKK



6.25%

7.25%

9.25%



2,900 DKK

1,500 DKK

750 DKK



6.50%

7.50%

9.25%



2,100 DKK

1,200 DKK

600 DKK



7.25%

8.25%

10.00%



1,650 DKK

1.000 DKK

550 DKK

 

7.25%

8.75%

10.25%

2,400 DKK

1,000 DKK

550 DKK



7.50%

9.00%

10.25%



1,800 DKK

1,200 DKK

400 DKK



8.00%

9.25%

10.50%



1,500 DKK

1,000 DKK

400 DKK

 

4.75%

5.75%

7.50%

6,000 DKK

2,500 DKK

900 DKK



6.50%

7.50%

9.00%



2,400 DKK

1,050 DKK

550 DKK



6.75%

7.75%

10.25%



2,500 DKK

1,050 DKK

500 DKK



7.00%

8.00%

10.00%



1,750 DKK

900 DKK

500 DKK



7.50%

8.75%

11.00%



2,300 DKK

750 DKK

500 DKK

 

5.50%

6.75%

8.50%

4,000 DKK

1,800 DKK

900 DKK



7.00%

8.00%

10.00%



1,400 DKK

750 DKK

400 DKK



7.50%

8.50%

10.00%



1,200 DKK

700 DKK

375 DKK



Source: EDC International Poul Erik Bech, estimates as of Q3 2023

Area* (see specifications page 42)

The development of retail properties The economic turmoil that occurred during 2022 due to rising interest rates and inflation has eroded consumers’ real income and purchasing power, leading to increased uncertainty in the retail segment and an increased risk of rising vacancy. This is particularly true for smaller tenants with less robust financial situations who do not sell essential consumer goods, making them more sensitive to economic fluctuations.

Consumer confidence has been negative since November 2021, potentially explaining some of the uncertainties in the retail segment. In addition to these uncertainties, there has been demand in recent years for portfolios of grocery stores with a natural geographic spread, driven by an attractive risk-adjusted return, as grocery stores are considered resilient to economic fluctuations, while also providing relatively high returns. Furthermore, grocery store chains often lease under long-term, non-cancelable contracts. For these reasons, the grocery store segment is highly attractive to investors and has seen reasonable activity in recent years.

Higher rent increases due to NPI regulations have also pressured tenants. However, it is believed that not all landlords have fully implemented NPI regulation, as some have considered the tenants’ resilience or the risk of lease termination and the risk of Section 13 rent regulation due to the potential for regulated rent to exceed market rent. The risk of high NPI regulations has increased tenant awareness of clauses related to rent regulation in lease contracts. This means that there will be higher demands for maximum regulation in the future.

Vacancy rates for retail have been slightly increasing over the past year, with vacancy rising by 0.26 percentage points to 3.04% in the third quarter of 2023. Yield requirements are expected to be generally stable over the next year, as is the case for market rents.

Available retail space as a percentage of building stock

Source: Ejendomstorvet-ED Statistikken, estimates as of Q3 2023

Capital Region of Denmark

Region Zealand

Region of Southern Denmark

Central Denmark Region

North Denmark Region

Denmark, total

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

Industrial Area* (see specifications page 42) Remaining Copenhagen

Western suburbs

Remaining Zealand

Northern suburbs

North Zealand

East Zealand

West Zealand

South Zealand

Lolland, Falster and Møn

Odense

Other Funen

Southern Denmark

Vejle

Kolding

Fredericia

Esbjerg

Sønderborg

Other South Jutland

Central Jutland

Aarhus

Silkeborg

Viborg

Herning

Northern Jutland

West Jutland

Aalborg

Hjørring

Frederikshavn

Prime Yield in %

Secondary

Tertiary

Trend 

4.75%

5.25%

6.25%

1,000 DKK

800 DKK

600 DKK



Yield in %

5.50%

7.25%

9.00%



Annual market rent in DKK/sq m

750 DKK

600 DKK

450 DKK

 

Annual market rent in DKK/sq m

Yield in %

5.75%

6.75%

8.00%

Annual market rent in DKK/sq m

800 DKK

550 DKK

400 DKK



Yield in %

6.00%

7.25%

9.00%



Annual market rent in DKK/sq m

800 DKK

550 DKK

375 DKK



Yield in %

5.00%

6.25%

9.00%



Annual market rent in DKK/sq m

750 DKK

500 DKK

300 DKK

 

Yield in %

6.50%

8.50%

10.50%

Annual market rent in DKK/sq m

550 DKK

350 DKK

200 DKK



Yield in %

7.00%

8.75%

10.75%



Annual market rent in DKK/sq m

475 DKK

300 DKK

200 DKK



Yield in %

8.00%

9.50%

12.00%



Annual market rent in DKK/sq m

550 DKK

300 DKK

200 DKK



Yield in %

5.50%

6.75%

8.50%



Annual market rent in DKK/sq m

550 DKK

400 DKK

250 DKK



Yield in %

5.75%

8.25%

10.00%



Annual market rent in DKK/sq m

500 DKK

350 DKK

200 DKK

 

Yield in %

5.50%

7.25%

9.50%

Annual market rent in DKK/sq m

600 DKK

375 DKK

250 DKK



Yield in %

5.50%

7.50%

9.75%



Annual market rent in DKK/sq m

575 DKK

375 DKK

250 DKK



Yield in %

5.00%

7.00%

8.50%



Annual market rent in DKK/sq m

600 DKK

400 DKK

250 DKK

 

Yield in %

6.50%

8.50%

10.00%

Annual market rent in DKK/sq m

450 DKK

300 DKK

225 DKK



Yield in %

6.75%

9.25%

11.25%



Annual market rent in DKK/sq m

500 DKK

275 DKK

200 DKK



Yield in %

6.75%

9.25%

11.25%



Annual market rent in DKK/sq m

500 DKK

275 DKK

200 DKK



Yield in %

5.25%

7.00%

9.00%



Annual market rent in DKK/sq m

575 DKK

450 DKK

300 DKK



Yield in %

7.00%

8.50%

10.50%



Annual market rent in DKK/sq m

450 DKK

350 DKK

200 DKK

 

Yield in %

7.25%

8.75%

10.75%

Annual market rent in DKK/sq m

450 DKK

350 DKK

250 DKK



Yield in %

7.00%

8.50%

10.50%



Annual market rent in DKK/sq m

400 DKK

300 DKK

200 DKK



Yield in %

7.50%

9.25%

12.00%



Annual market rent in DKK/sq m

350 DKK

225 DKK

150 DKK

 

Yield in %

6.00%

7.25%

9.00%

Annual market rent in DKK/sq m

525 DKK

375 DKK

250 DKK



Yield in %

7.25%

9.25%

11.00%



Annual market rent in DKK/sq m

400 DKK

300 DKK

200 DKK



Yield in %

7.50%

9.50%

11.75%



Annual market rent in DKK/sq m

400 DKK

275 DKK

150 DKK



Source: EDC International Poul Erik Bech, estimates as of Q3 2023

Yield in %, annual market rent in DKK/sq m incl. operating expenses and trends for the next 12 months

The development of industrial properties The logistics segment has experienced high demand in recent years, evidenced by the fact that the segment in the first 6 months of 2023 experienced the smallest decline compared to the same period the previous year. The demand is primarily focused on newer and modern logistics properties located close to essential infrastructure such as highways. In addition, an increased focus on supply chains has led several companies to move away from just-in-time principles, further increasing demand for last-mile logistics properties. Last-mile logistics properties are expected to continue experiencing increased demand, partly due to range limitations on electric trucks, but also due to the lack of charging infrastructure.

cellation periods with solid tenants also significantly reduce buyer yield requirements. Finally, there is a trend toward triple-net contracts, where the tenant covers all operating expenses except for administrative costs.

High-ceiling warehouse spaces with good access and ramps are particularly sought after and meet current needs. There is also a growing interest in sustainable and energy-efficient properties, preferably certified. Additionally, there is increased demand for sale-and-lease-back agreements with long lease terms, which reduces the risk for investors and provides predictability for companies while allowing them to focus on their core competencies. Long non-can-

The industrial segment has also experienced high demand in recent years, primarily driven by users. Vacancy rates for industrial and logistics properties have been slightly increasing over the past year, with vacancy rising by 0.40 percentage points to 1.73% in the third quarter of 2023. Yield requirements are generally considered stable, as is market rent.

However, the supply of the sought-after properties has not kept pace, partly due to urban industrial and logistics areas being converted into residential areas. At the same time, it is becoming increasingly difficult to find suitable areas, especially for logistics properties in prime locations. Increased construction costs and rising interest rates have also affected the outlook for new construction, potentially increasing the gap between supply and demand.

Available industrial space as a percentage of building stock

Source: Ejendomstorvet-ED Statistikken, estimates as of Q3 2023

8% 7% 6% 5% 4% 3% 2% 1%

Capital Region of Denmark

Region Zealand

Region of Southern Denmark

Central Denmark Region

North Denmark Region

Denmark, total

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

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.

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.

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.

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 42 municipalities.

Improve your decisions by using data-based analyses 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

Niclas Holm Senior Research Analyst

joal@edc.dk +45 5858 7467

niho@edc.dk +45 5858 8784

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2023

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