The transaction volume reached DKK 52.1 billion in 2024, representing an increase of 16% or DKK 7.1 billion compared to 2023. The last four months of the year, in particular, saw many large transactions, which was also linked to the decline in mortgage interest rates that occurred during the autumn.
Residential rental properties turned out to be by far the largest segment in terms of transaction volume, accounting for about half of the total volume. Newly constructed rental properties with market-rate rents were especially popular.
The second-largest segment was industrial and logistics properties, which accounted for approximately a quarter of the total transaction volume. This segment also included the largest transaction in 2024: DSV’s sale of their 315,000 m² logistics center near Horsens to Catena for DKK 3.3 billion.
The economy is strong compared to neighboring countries, not solely due to the pharmaceutical industry. However, there are significant areas where growth rates are low. Consumers dipped into their savings during the period of high inflation and are now reluctant to channel wage increases into greater consumption, but this is expected to rise in 2025. Exports and industrial production are rising sharply, driven by pharmaceuticals and medical equipment but also by a few other areas. Despite the high level of wage growth in 2024, inflation remains low. Wage growth is now slowing, while inflation is expected to stabilize around 2%.
Yield requirements are mostly moving sideways at the moment, and forecasts for the levels in 12 months suggest that yields will remain roughly unchanged from current levels, though forecasts in several areas are more positive than in the previous quarter.
The Danish economy
The Danish economy is considered to be in a high-growth phase, following an extended period of employment growth. However, signs of a slowdown in the labor market and employment is expected to develop relatively weakly in 2025 and 2026. The economic growth of recent years has primarily been driven by progress in the industrial sector, with the pharmaceutical industry being a significant factor. Additionally, growth in Danish export markets and improved household purchasing power have led to signs of mild improvement in several sectors of the economy. Conversely, maritime transport had a significant negative impact on growth. According to the latest revised figures from the Central Bank of Denmark, GDP is expected to grow by 2.3% in 2025, and 1.5% in 2026. In comparison, the government forecasts GDP growth of 2.9% in 2025 and 1.7% in 2026. The outlook for more moderate growth in 2026 is attributed to an anticipated decreasing of capacity pressure measured by the output gap and reduced pressure on the labor market.
Source: Statistics Demark and The Central Bank of Denmark
Lower inflation rate and an increased expectation in both markets and central banks’ own forecasts that inflation will return toward the target level of approx. 2% have led both the ECB and FED to ease monetary policy. Most recently, in December, the ECB reduced the interest rate by 0.25%-points to 3%. Since June 2024, the ECB has lowered the interest rate by 1%-point, with the Central Bank of Denmark following suit with equivalent reductions. According to the December 2024 economic report, based on €STR and FED funds futures, financial markets expect the ECB to reduce the interest rate by approximately 1.5%-points by mid-2025, and the Federal Reserve to lower the rate by about 1%-point by the end of 2025. In week 4 of 2025, the long-term mortgage interest rate stood at 4.06%, while the short-term rate, more closely correlated with monetary policy measures by the FED and ECB, was 2.24%. This demonstrates how monetary policy rate cuts and, especially, expectations of further reductions have resulted in declining market interest rates. According to the a report from the Danish Economic Councils, the 30-year Danish mortgage rate is projected to be 4.3% for both 2024 and 2025, and 4.4% by 2030.
20,076
Source: Finance Denmark & Statistics Denmark
The consumer confidence indicator, which reflects the public’s view of the current and future economic situation, stands at -11.7 in December, showing a slight improvement compared to last month’s figure of -13.1. This small improvement in January is primarily due to an increase in consumers’ assessment of their families’ current financial situation. Despite low inflation, an increase in real wages, and a strong labor market, Danish consumers still find it difficult to feel optimistic about their own and Denmark’s economy. However, consumer confidence has been predominantly rising since October 2022, when it reached -37, the lowest level in the 48-year history of the statistic. The continued negative consumer confidence is primarily due to high interest rates, which have reduced Danes’ disposable incomes in recent years, as well as price increases on daily necessities.
Source: Statistics Denmark
The labor market has experienced significant progress in recent years. Employment increased by 220.000 people from the end of 2019 to the third quarter of 2024. This indicates that employment growth is expected to slow further in 2025 and 2026. Employment remains at a historically high level, still exceeding the structural level. According to the government’s economic report, higher wages and weaker productivity growth are expected to reduce demand for labor, leading to a slight decline in employment over the coming years. This is anticipated to materialize as early as 2026, with employment expected to decrease by 5,000 people. From November to December, the unemployment indicator shows a slight increase of 100 people. The unemployment rate remains low at 2.9% of the workforce, which translates to 88,400 unemployed individuals in December.
Increased Activity Leads to Stable Yield Requirements
After a long period of low activity, signs of increased activity are emerging in the residential segment. The transaction volume for rental properties in 2024 reached DKK 25.7 billion, which is more than 15% higher than in 2023. This is primarily due to several significant transactions, including the purchase of Rødovre Port by VIGA and Pictet, and Velkomn’s acquisition of 667 townhouses across the country. These two transactions alone account for over DKK 2.5 billion.
In general, there are signs that professional investors have become more active and that we have reached a level where both buyers and sellers are satisfied. As a result, it is expected that yield requirements will remain at the current level, and that any further interest rate cuts will lead to increased activity.
Construction activity has declined significantly in recent years due to the rising interest rates combined with greater uncertainty, making it harder to achieve profitability in
projects. This decline in construction activity is expected to contribute to a continued low vacancy rate in the coming years.
The new property taxes are creating increased uncertainty in the valuation of rental properties. A cap on increases has been introduced that follows the sale of properties, meaning the consequences of rising land values will be limited. High interest rates and rising taxes may lead more people to rent a home, as renting becomes more attractive than owning. As a result, demand for rental housing is expected to continue rising in the coming years. Conversely, it is expected that the vacancy rate will continue to decline, as it has over the past year, where it fell by 0.9 percentage points to a total vacancy rate of 3.0%. The vacancy rate is lowest in the capital region and highest in Northern Jutland.
Market rents are expected to remain stable to slightly increasing in the coming year.
Kanalgaarden, Ørestad. Photo: ATP Ejendomme.
Lolland, Falster and Møn
Other Funen
Sønderborg
Development in office properties
Continued Demand for Flexible and Certified Office Properties
Demand for attractive office properties remains strong, with location and proper pricing continuing to be top priorities, as in previous years. 2024 has seen several large transactions where both location and pricing have been particularly attractive.
The demand for office properties in Denmark is supported by a robust labor market with record-high employment. At the same time, remote work is significantly less common compared to other major European metropolitan areas due to shorter commuting times. However, many large companies are implementing flexible office solutions. As a result, businesses are increasingly seeking modern office concepts, such as workspaces in larger office communities or the ability to scale office capacity up or down on short notice. While there is a large supply of flexible office
Available office space as a percentage of building stock
concepts in Copenhagen and its surroundings, Aarhus has a limited supply despite high demand.
In addition to flexible office solutions, both tenants and investors are increasingly demanding modern and sustainable office spaces that are future-proof. Rising ESG requirements play a significant role in the office segment, and this trend is expected to continue. It is anticipated that the value of certified properties, such as those with DGNB certification, will exceed the value of non-certified properties in the long term.
The nationwide office vacancy rate stood at 6.0% in Q4 2024, representing an increase of 0.9 percentage points compared to the same quarter the previous year. Yield requirements are generally expected to remain stable in the coming year, as is the case for market rents.
Source: Ejendomstorvet-ED Statistikken, estimates as of Q4 2024
Østerbro, Frederiksberg and Gentofte
Lolland, Falster and Møn
Vejle
Sønderborg
market rent in DKK/sq m
DKK 1,000 DKK 550 DKK
Annual market rent in DKK/sq m 1,800 DKK 1,200 DKK
Development in retail properties
Ongoing Tug-of-War Between E-Commerce and Retail
The Danish retail sector is still struggling with the aftermath of 2022, which was marked by the highest inflation in 40 years, significantly rising interest rates, and declining real wages. As a result, consumer confidence was at a very low level at the beginning of 2023, though it has since shown a slight upward trend. Consumer confidence continues to rise slowly, despite some fluctuations, reaching -11.7 in January 2024, a slight improvement compared to the previous month.
Low consumer confidence and uncertainty about interest rates have created instability in the retail market. Despite this, the transaction volume for retail properties in 2024 was DKK 4.7 billion, representing a decline of approximately DKK 2.7 billion, or about one-third, compared to 2023.
There is still demand, particularly for grocery portfolios with geographical diversification, as grocery stores are
considered resilient to economic fluctuations and have a relatively low-risk profile. Additionally, grocery chains often sign long-term lease agreements with extended non-termination periods.
Since 2017, e-commerce in Denmark has shown a growing trend, especially during the COVID-19 lockdowns in 2021, when it increased significantly. The high levels seen during the lockdowns appear to have continued, with e-commerce growing by 3.33% from the first half of 2023 to the first half of 2024. At the same time, e-commerce represents an increasingly larger share of total transactions, highlighting the ongoing pressure on physical stores.
Retail vacancy rates have remained stable, rising by 0.2 percentage points between Q4 2023 and Q4 2024 to 3.2%. Yield requirements are generally expected to remain stable to slightly increasing over the coming year, while there is some risk of declining market rents in certain areas.
Source: Ejendomstorvet-ED Statistikken, estimates as of Q4 2024
Lolland, Falster and Møn
Vejle
Development in industrial properties
The Supply of Highly Sought-After Properties Is Not Keeping Up with Demand
The logistics segment has, in recent years, been characterized by continued solid demand. In 2024, the transaction volume reached DKK 13.1 billion, which is DKK 1.4 billion more than the previous year. It is important to mention that this segment also recorded the largest real estate transaction of the year—the sale of Denmark’s largest logistics center for DKK 3.3 billion from DSV to Catena.
There is still strong demand for newer and modern logistics properties located close to essential infrastructure such as highways. However, there is also significant demand for properties suited for light industry, with major transactions occurring in the Greater Copenhagen area in recent years. Additionally, there is a growing focus on sustainable and energy-efficient properties—preferably certified ones. Furthermore, there is strong demand for sale-and-lease-
Available industrial space as a percentage of building stock
back agreements with long-term leases, which reduce investor risk while allowing companies to free up liquidity and focus on their core competencies. Demand is also broadly distributed across the country.
The supply of the most sought-after properties has not kept up with demand. This is partly due to industrial and logistics areas near cities increasingly being converted into residential zones. At the same time, it is becoming increasingly difficult to secure suitable land for logistics properties in prime locations, as municipal willingness to allocate land for warehouse and logistics purposes is limited.
The vacancy rate for industrial and logistics properties has risen significantly nationwide over the past year, increasing from 1.9% in Q4 2023 to 2.9% in Q4 2024. Yield requirements are expected to remain stable in the coming year, as is the case for market rents.
Source: Ejendomstorvet-ED Statistikken, estimates as of Q4 2024
Definitions
Location and condition
Yield and rent levels estimates are based on primary, secondary and tertiary categories, where primary is the best and tertiary is the worst. Various variables for each property type have been taken into consideration with regards to determine the facility classes, such as: size, floor plan structure, year of construction, lifts, climate control, cabling infrastructure, staff facilities, customer facilities, parking facilities, building energy rating, ceiling height, general accessibility, general condition of the property, etc.
Primary: A property with prime location and class A facilities has the best possible location in an area, the highest standard when it comes to facilities, is modern and ready to move into. This type of property will typically be sold at the lowest yield in the area, have the highest market rent and have a short reletting process.
Secondary: Average in terms of location and condition. Yield and rent levels also reflect the average levels for the area. The re-rental options are market compliant and reflect the general market conditions.
Tertiary: Poor location for the area, low standard, and outdated. This type of property is expected to be able to be sold at a relatively high yield level, and the rent level is low for the defined area. Similarly, vacancy rates can be expected to be higher than the market average.
Yield
All yields are initial net yields and are defined as the annualized rent generated by the property after the deduction of estimated annual irrecoverable property outgoings, expressed as a percentage of the property valuation (property valuation is adjusted for the value of rental deposits and prepaid rent). For comparison purposes, it is assumed that all properties are fully let at market-conform conditions.
Market Rent
All rents are headline rents, in other words, the contracted gross rent receivable, which becomes payable after any tenant incentives have expired. Market rent estimates are expressed in DKK/sq m/year. It is assumed that all properties are let at market-conform conditions.
* Area specifications
Copenhagen City = Copenhagen K ex. harbour areas.
Østerbro, Frederiksberg og Gentofte = Østerbro, Frederiksberg and Gentofte municipalities.
Harbour area (Nordhavn, Kalvebod Brygge & Tuborg Havn) = Areas located along Copenhagen’s harbour.
Remaining Copenhagen = Vesterbro, Nørrebro, Nordvest, Valby, Sydhavn (ex. harbour areas), Brønshøj, Husum, Vanløse, København S (ex. Ørestad and harbour areas), Kastrup and Dragør municipalities.
Western suburbs = Hvidovre, Rødovre, Glostrup, Brøndby, Albertslund, Vallensbæk, Ishøj, Høje Taastrup, Ballerup and Herlev municipalities. Northern suburbs = Lyngby, Holte, Farum, Birkerød, Gladsaxe, Rudersdal and Furesø municipalities.
Residential rental properties
1) Newer residential rental properties are properties that have been occupied after 31.12.1991 and thus covered by the rules on free/market rent according to the Danish Residential Rent Regulation Act section 54 (1, 1).
2) Cost determined rental properties are older residential rental properties that have been occupied before 31.12.1991 and are regulated in accordance with the provisions of the Danish Residential Rent Regulation Act on cost-determined rent.
3) Fully developed older residential rental properties are older home rental properties without further potential for rent increases through modernization pursuant to section 19 (2) of the Danish Residential Rent Regulation Act.
Data for available commercial premises
The source of available commercial premises is the latest available supply statistics from Ejendomstorvet. Further information about these statistics can be found at ejendomstorvet.dk/statistik/udbudsstatistik.
Trends
All trends reflect our expectations to the level in 12 months time.
The figure is expected to increase
The figure is expected to remain unchanged
The figure is expected to decrease
Note on estimates
The valuation of a property depends on many specific factors, including conditions of the lease, the tenant, and the property condition. The estimates cannot be used uncritically in the valuation of one specific property but can serve as input related to the valuation. Reproduction or citation only with acknowledgment of source. While every effort has been made to ensure that the information provided is accurate, EDC International Poul Erik accepts no liability for errors.
North Zealand = Gribskov, Helsingør, Allerød, Hillerød, Egedal, Fredensborg, Halsnæs and Hørsholm municipalities.
East Zealand = Greve, Køge, Lejre, Roskilde and Solrød municipalities.
West Zealand = Holbæk, Kalundborg, Odsherred, Ringsted, Slagelse and Sorø municipalities.
South Zealand = Faxe, Næstved, Stevns and Vordingborg municipalities. Lolland, Falster and Møn = Guldborgsund and Lolland municipalities.
Other Funen = All municipalities at Funen ex. Odense.
Other South Jutland = Billund, Fanø, Haderslev, Tønder, Varde, Vejen and Aabenraa municipalities.
West Jutland = Skive, Struer, Holstebro, Thisted, Morsø and Ringkøbing-Skjern municipalities.
As an investor, it is crucial to approach an investment objectively. With analyses from EDC Poul Erik Bech, we provide you with the opportunity to do just that by ensuring that your investment is based on a solid data foundation. EDC Poul Erik Bech Research offers area-specific analyses for the entire country that can be tailored to your specific needs. Additionally, we provide in-depth analyses of population trends, housing supply, transaction volume, and more, which can help you as an investor to make the right decisions based on a solid knowledge foundation.
If you have questions, you are more than welcome to contact us:
Joseph Alberti Head of Research
joal@edc.dk +45 5858 7467
Niclas Holm
niho@edc.dk +45 5858 8784
CONTACT
EDC Poul Erik Bech
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