Market Report Issue I 2018 by Cushman & Wakefield RED

MARKET REPORT ISSUE I - FEB 2018

Patrizia acquired 259 condominiums from Pensam and By & Havn in the North Harbor - located by the harbor front. Cushman & Wakefield | RED facilitated the sale.

EXECUTIVE SUMMARY

RECORD HIGH INVESTMENT VOLUMES IN 2017

ISSUE I 2018

2 / 35

2016 Q4 2017 Q4 CHANGE

Prime yield (Copenhagen City)

4.00%

3.75%

-25 bp

Investment volume in million

1,113 €

751 €

-362 €

Vacancy (Copenhagen City)

7.80%

5.70%

-210 bp

CHANGE

RETAIL

2016 Q4

2017 Q4

Prime yield (Copenhagen High Streets)

3.00%

0 bp

Secondary yield (Copenhagen Side Streets)

4.50%

4.00%

-50 bp

451 €

1,458 €

+1,007 €

Investment volume in million

The hotel investment market has been added to this issue of our market report, as we in 2017 also observed a significant investor focus in this segment. As Copenhagen hotel capacity is high, investors have been highly active, both within optimization, investment and construction of new hotels. We strongly recommend our readers to visit our website at cw-red.dk to experience our dynamic analysis tool. The tool is continuously updated to show you the newest developments.

INDUSTRIAL 2016 Q4 2017 Q4 CHANGE Prime yield (Copenhagen Area)

6.75%

6.00%

-75 bp

Prime yield (Triangle Area)

7.00%

6.25%

-75 bp

67 €

112 €

+45 €

Investment volume in million

TRANSACTION VOLUME (BN DKK) 2017 - DKK 92 BN ~ EUR 12.3 BN 37

Enjoy the report! 9 Other

10 Industrial

Nicholas Thurø Managing Partner Cushman & Wakefield | RED

Retail

Our focus article in this report highlights that Danish shopping centres are largely shielded from the bloodshed that is expected to take place in the U.S shopping centre market and despite eCommerce’s

OFFICE

Office

The Danish retail segment have historically been driven by the lucrative highstreet assets in central Copenhagen, but as yields on high-street assets are getting historically low, investors are also looking towards other attractive risk-adjusted investment within the retail segment. Among other things, we saw a significant increase in investments of individual shopping centres and portfolios in 2017.

continuous growth, investors in Danish shopping centres are optimistic that they – with new technology and optimized tenant mix – will be able to deliver attractive risk adjusted returns going forward.

Residential

Through 2017, the Danish commercial real estate market continued to attract vast amount of capital from both foreign and domestic investors resulting in another record year, as we registered transactions worth DKK 92 bn. The residential segment was once again the largest segment, followed by office and retail. Additionally, we observed an increased activity within the smaller segments such as hotels and logistics/industrial.

INVESTMENT MARKET

CONTENT ISSUE I FOCUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MACROECONOMICS

....................................................

INVESTMENT MARKET HOTEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

OFFICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

RESIDENTIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

RETAIL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INDUSTRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

OCCUPIER MARKET

OFFICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

RETAIL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

RETAIL - FOOTFALL ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

APPENDIX - DANISH TRANSLATION

DANSK VERSION AF FOKUS ARTIKEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ISSUE I 2018

3 / 35

EUROMONEY 2017 - WINNER OF 4 AWARDS

2017 2016

ISSUE I 2018

4 / 35

ISSUE I FOCUS

ISSUE I 2018

5 / 35

DANSK VERSION PÅ SIDE 32

ISSUE I FOCUS SHOPPING CENTRES CONTINUE TO ATTRACT INVESTORS

WHILE THE SHOPPING CENTRE MAR-

Credit Suisse predicts. The U.S. has the

RETAIL TRANSACTIONS

KET IN THE U.S. IS DISTRESSED WITH

world’s highest shopping centre GLA

12 12 BN DKK

PREDICTION OF WIDESPREAD CLO-

(gross letting area) per capita, while the

SURES, 2017 WAS A RECORD-SETTING

Danish planning act have limited the to-

YEAR FOR SHOPPING CENTRE DEALS

tal number of shopping centres, leaving

IN DENMARK. THE OVERALL RETAIL

Denmark with the lowest shopping cen-

VOLUME MORE THAN DOUBLED TO

tre GLA per capita in the Nordic Region.

DKK 17 BN FROM 2016 BECAUSE OF

Additionally, Denmark currently do not

AN IMPRESSIVE DKK 9.6 BN WORTH

have any Off market retailers operating

OF SHOPPING CENTRE DEALS.

in the country, and while we might see

THE DANISH SHOPPING CENTRE MARKET IS LARGELY SHIELDED FROM THE BLOODSHED THAT IS EXPECTED TO TAKE PLACE IN THE U.S AND DESPITE

ECOMMERCE’S

CONTINU-

OUS GROWTH, INVESTORS IN DANISH SHOPPING CENTRES ARE OPTIMISTIC THAT THEY – WITH NEW TECHNOLOGY

AND

OPTIMIZED

TENANT MIX – WILL BE ABLE TO DELIVER ED

ATTRACTIVE

RETURNS

RISK

GOING

ADJUST-

FORWARD.

a TJ Maxx or similar opening stores in

57%

10 10 BN DKK 8 BN 8 DKK

43%

6 BN 6 DKK

71% 9.6

BN DKK

4 BN 4 DKK 29%

2 BN 2 DKK

7.2

BN DKK

5.2

BN DKK

2.2

BN DKK

2016

2017

Denmark at some point, the compe-

Shoppingcentre transactions

tition from this type of retailer is very

Other retail transactions

much limited for the foreseeable future.

Source: Cushman & Wakefield | RED

ECOMMERCE – A BIG UNKNOWN

eCommerce. We want to utilize eCom-

Ecommerce, is however, something that

merce to further develop our shopping

is an immediate challenge for Danish

centres”.

physical retail, including shopping centres, which one of the largest shopping owners, Dades, also recently confirmed, when commercial director Jakob Møller told Borsen: “Ecommerce is something

The major global bank, Credit Suisse,

we take very seriously, and we are not

predicted last year, that up to 25% of U.S.

in a position where we can outcompete

As of 2017, eCommerce retail sales constituted 10.4% of the total retail sales in Denmark and although this figure in no way indicates the death of physical retail, the figure is expected to rise going forward and over a broad-spectrum challenge physical retail.

shopping centres will disappear over the coming years due to rising competition from eCommerce and shoppers’ increas-

20 ECOMMERCE SHARE OF TOTAL RETAIL TRADE 17.8%

ing preference for off-price retailers – that is retailers who rely on selling off the season items at low prices. However, an elevated transaction activity with

15%

15.1%

14.8%

Danish shopping centres in 2017 suggests that investors do not believe that Credit Suisse’s prediction will hold true for Danish shopping centres, but why?

10.4%

10%

8.8%

DANISH SHOPPING CENTRES SHIELDED

There is a major market structure dif-

ference between the U.S. and Denmark within the shopping centre market, which is why, we believe that Danish shopping centres to a higher degree will be shielded from the bloodshed that

Denmark 2014

European Average 2015

United Kingdom 2016

Germany

United States

2017(f)

Source: CRR, RetailMeNot, Statista, Cushman & Wakefield

ISSUE I 2018

6 / 35

FOCUS

MACROECONOMICS

INVESTMENT  MARKET

OCCUPIER  MARKET

APPENDIX

CENTRES FOR SALE

CENTRES SOLD 2016-2017

Ballerup Centret Boholtecentret Butikscenter Ølby Egedal Centret Farum Bytorv Hørsholm Midtpunkt Ro’s Torv Sct. Mathias Centret Sillebroen Solrødcentret Spinderiet Viby centret Waterfront Shoppingcenter Waves

Amager centret BIG City 2 City Vest Copenhagen Designer Outlet Esbjerg Storcenter Frederikgsberg Centret Friheden Butikscenter Friis Gallerierne Hillerød Glostrup shoppingcenter Helsingør Bycenter Herlev Bymidte Humlebæk Centret Hvidovre C Ishøj Bycenter Kolding Storcenter Lyngby Storcenter Næstved Storcenter Nørrebro Bycenter Randers Storcenter Skovlunde Centret Slotsarkaderne Tårnby Torv Vestamagercentret Vestsjællandcentret Veri Centret Holte Midtpunkt

NEW CENTRES Broen Esbjerg Kronen Vanløse Strædet Køge

FOCUS

MACROECONOMICS

INVESTMENT  MARKET

OCCUPIER  MARKET

APPENDIX

ISSUE I 2018

7 / 35

DANSK VERSION PÅ SIDE 32

ISSUE I FOCUS In more established markets such as

TECH TO BOOST SHOPPING EXPE-

taking or returning to shelves and keep-

the U.S., Germany and England, eCom-

RIENCE

ing track of the items in a virtual shop-

merce’s share of the retail markets has

Another important force, which we be-

ping cart. When the customer leaves the

increased significantly in recent years

lieve will be important to utilize for shop-

store,

ping centre owners, is new technology.

your account and sends a receipt. Simi-

to between 14.8% and 17.8% as of 2017. We find it highly likely that the Danish eCommerce share will keep growing to at least the same levels as our neighbors - Germany and England, when eCommerce giants like Amazon and eBay thoroughly anchor themselves in the market.

MORE F&B TO COUNTER COMPETITION

We believe that Augmented Reality (AR) in the future will be used to enhance the physical shopping experience, while Big Data will facilitate better analysis of, and

Amazon

automatically

larly, Bestseller also recently opened two new stores in China, where customers can pay trough facial recognition technology, making credit cards and cash obsolete.

tools to optimize and manage, the shop-

“The Danish retail industry is forced to

per flow on a daily basis by knowing more

adapt to current and future trends which

precisely, who and what kind of shopper

are shaping the industry. An unwilling-

are where in the centre at any given time.

ness to adapt will evidently lead to lost

As the competition from eCommerce

Another example of how to utilize new

intensifies, shopping centre investors

technology in the physical retail store is

will need to mitigate the rising competi-

Amazon’s newly opened concept grocery

tion to stay competitive. This involves a

store. The store uses computer vision,

more diverse tenant composition, with a

deep learning algorithms and sensor fu-

smaller share of traditional retail stores,

sion to detect everything the customer is

market shares. There are definitely new opportunities for shopping centres, and they must be identified and explored”, says Managing Partner Nicholas Thurø from Cushman & Wakefield | RED.

and a larger share of tenants whose services cannot be easily substituted by eCommerce. ECOMMERCE ECOMMERCE RESISTANT RESISTANT TENANTS TENANTS • Pharmacy • Food & Beverages • Cinemas • Public services • Fitness

One of the most important tenant groups in future shopping centers is believed to be the food and beverage-group (F&B’s) and we have already begun to see an increased focus from the shopping centre owners to expand their centres’ F&B offering. The largest shopping center in Denmark, Fields, decided a couple of years back to revitalize their dining experience by attracting numerous restaurants for their top floor, while Lyngby Storcenter

also

changed

the

main

square of the centre into a food court.

ISSUE I 2018

8 / 35

FOCUS

charges

MACROECONOMICS

INVESTMENT  MARKET

OCCUPIER  MARKET

APPENDIX

OUTLOOK While physical retail is being disrupted

FACT BOX

by emerging technology and changing

2017 was a record-setting year in terms of shopping centre deals in

shopper preferences, real estate investors

Denmark, as we registered transactions worth impressive DKK 9.6 bn.

continue to believe in shopping centres

In particular, ATP’s acquisition of 50% of Danica’s shopping centre

as an asset class. Recently, we have also

portfolio for DKK 6.9 bn stressed investor’s confidence in the asset

seen pure online retailers opening physi-

class, but also, Blackrock’s purchase of Naestved Storcenter for ap-

cal stores, such as Boozt, which is a clear

prox. DKK 1 bn and Stepstones acquisition of NREP’s portfolio of local

sign that shoppers still demand a physical

shopping centre for approx. DKK 1.5 bn cemented investors’ belief that

aspect to their shopping experience. With

shopping centres continues to offer a healthy risk adjusted return.

agile behavior, a willingness to invest and adapt new technology solutions, we too, believe that shopping centre investors will

Additionally, Dades is currently also in the market looking for a partner to co-own their 12 Danish shopping centres.

be able to deliver attractive risk adjusted returns on their investment going forward.

PROJECT OCEAN Cushman & Wakefield | RED advised ATP in their acquisition of 50% of Danica’s shopping centre portfolio consisting of 16 centres across Denmark for approx. DKK 6.9 bn.

FOCUS

MACROECONOMICS

INVESTMENT  MARKET

OCCUPIER  MARKET

APPENDIX

ISSUE I 2018

9 / 35

MACROECONOMICS

ISSUE I 2018

10 / 35

MACROECONOMIC OVERVIEW 2017 WAS ANOTHER POSITIVE YEAR FOR THE DANISH ECONOMY The quarter-on-quarter GDP growth

MACROECONOMIC VARIABLES

has been steady with rates ranging from

KEY VARIABLE

A YEAR AGO

MOST RECENT

1.91%

1.53% 1.39%

TREND

0.4% to 1.1% each quarter, although it dropped 0.5% from Q2 2017 to Q3 2017.

GDP Growth Rate y/y

A limited household consumption in

Inflation Rate y/y

0.60%

part led to a drop in GDP growth, which

Unemployment Rate - Denmark

6.40%

5.60%

to some extent can be explained by the

Unemployment Rate - Copenhagen Region

6.50%

6.40%

abrupt stop in car sales across Den-

10 year Government Bond

mark, as uncertainty related towards

Short Term Mortgage Rate - 1 and 2 year bonds

tax changes resulted in historically low

Long Term Mortgage Rate - 30 year bonds

number of car sales in the fall of 2017.

Source: Statistics Denmark, Association of Danish Mortgage Banks and The Danish National Bank

0.29%

0.15%

-0.36%

-0.53%

2.54%

2.06%

Despite the drop in Q3, the total growth in the period from Q4 2016 to Q3 2017 was 1.5%.

REAL GDP DEVELOPMENT (QUARTER-ON-QUARTER)

Inflation rates in Denmark and Europe

1.2%

1.15%

appreciated in the beginning of 2016, but have since August 2017 depreci-

1.0%

ated, and was as of November 2017 at 1.3% in Denmark, which is 0.5%-point

0.8%

0.75%

lower than the European 1.8% average.

0.67% 0.60%

0.6%

0.60%

Interest rates in Denmark remain at historically low levels. While it is nearly im-

0.43% 0.4%

possible to predict how they will develop in the future, economist and banks do not expect much change in 2018. They do stress, however, that the economy, and the low rates are supported by

0.2%

0.0%

2016 Q1

2016 Q2

2016 Q3

2016 Q4

2017 Q1

2017 Q2

2017 Q3

a much stronger foundation, compared to the period before the last recession. Danish

employment

went

-0.2%

-0.4%

11,200 people from Q2 to Q3 2017, which ing

corresponds unemployment

the

declin-

numbers

-0.48% -0.6% Source: Statistics Denmark

these have been steadily dropping

The continuous increase in employ-

from 230,000 people in late 2012, to

ment, along with higher disposable in-

167,000 people in late 2017. Unem-

come has reflected positively on private

ployment in Denmark is of late 2017

consumption, along with higher private

approx. 6% of the workforce. Many

savings and wealth deposits. Low in-

sectors, and especially within con-

terest rates continue to be the primary

struction

inabili-

reason of increasing real estate prices,

ty to recruit workers, which is quite

mainly in the popular areas of Copen-

negative for the respective sectors.

hagen and Aarhus.

have

FOCUS

reported

MACROECONOMICS

INVESTMENTâ&#x20AC;Ż MARKET

OCCUPIERâ&#x20AC;Ż MARKET

APPENDIX

ISSUE I 2018

11 / 35

HOLTE MIDTPUNKT Cushman & Wakefield | RED represented NREP in their sale of 7 shopping centres acquired by the global property fund StepStone for approx. DKK 1.5 bn.

ISSUE I 2018

12 / 35

FOCUS

MACROECONOMICS

INVESTMENT MARKET

OCCUPIER MARKET

APPENDIX

INVESTMENT MARKET

ISSUE I 2018

13 / 35

INVESTMENT MARKET - HOTEL THE RAPID GROWTH IN THE TOURISM INDUSTRY MAY RESULT IN A SHORTAGE OF HOTEL ROOMS

THE COPENHAGEN HOTEL MARKET IS

2017 this number has risen to 2 M, clearly

The positive development within this

AMONG THE STRONGEST IN EUROPE,

indicating the enormous growth of Airbnb

segment is expected to continue, as

SHOWING REMARKABLE PROGRESS

users in Denmark. This signifies a demand

both the Copenhagen Cruise Terminal

IN RECENT YEARS WITH A CONTIN-

for low-cost accommodation opportuni-

and Copenhagen Airport are expanding

UOUSLY

OCCUPANCY

ties, that many hotels cannot supply. The

in response to the increasing amount of

RATE. THE SUCCESS OF THE COPEN-

INCREASING

occupancy rate and ADR (Average Dai-

inbound tourism and business travelers.

HAGEN HOTEL MARKET, AND THE

ly Rate) are both continuing to increase

PROMISING TENDENCIES SUPPORTED

which affects the RevPAR (Revenue Per

The investment activity on the ho-

BY HISTORICALLY STRONG NUMBERS

Available Room) of hotels similarly. More-

tel market is becoming considerably

IS INCREASING INVESTORS’ WILLING-

over, according to HVS’ report “European

intensified as shown on the transac-

NESS TO ACQUIRE A SLICE OF THE

Hotel Valuation Index 2017”, Copenhagen

tion diagram, in which the transac-

PIE. FURTHERMORE, THE ESCALATING

is maintaining its position among the three

tion volume in Denmark has increased

ACTIVITY HAS INITIATED AN EXTEN-

least volatile hotel markets in Europe.

significantly since 2015. In 2016, Denmark reached approx. DKK 2.5 bn. –

SIVE PROCESS OF HOTEL DEVELOPMENTS IN GREATER COPENHAGEN IN WHICH ROOM CAPACITY IS EXPECTED

more than twice the investment in 2015.

TRANSACTIONS

We still see a great progress in terms of

TO INCREASE WITH 13% BY 2020. BUT

Domestic and foreign investors are

transaction volume, as 2017 amounted

IS THIS ENOUGH?

directing more focus on diversifying

to an astounding DKK 5.3 bn. In con-

their real estate portfolios by allocating

trast, the total European hotel transac-

substantial amounts of capital to the

tion volume amounted to EUR 17.8 bn.

hotel market, arguably due to more at-

in 2016, which was a decline of 25%

tractive risk-adjusted yields but clearly

on the volume achieved in 2015.

PROMISING TENDENCIES In general, the Copenhagen hotel market is fairly competitive with numerous hotels

also to meet the skyrocketing demand.

HOTEL ACCOMMODATIONS VS AIRBNB IN COPENHAGEN

ranging on a wide scale from budget to luxury.

90%

10 Airbnb accommodations (nightly stays)

The increasing amount of inbound tour-

Hotel accommodations (nightly stays)

ism and business accommodation, com-

80%

Occupancy rate (right axis)

bined with an insufficient supply has

21%

pushed the occupancy rates to historical high levels, increasing hotel revenue

there has been a capacity growth of over 30% since 2008. However, our expectation is that in the short term, there will be a shortage of hotel rooms de-

60%

MILLION PEOPLE

ly growing and in the Copenhagen area,

70%

and investor attention. Additionally, the capacity of hotel rooms is continuous-

23%

13%

6 50% 5 40% 4 92%

87%

79%

77%

30%

spite the high activity of developments. 20%

Hotels account for most of the yearly accommodations, but the use of Airbnb is rising significantly. In Copenhagen, the

ISSUE I 2018

14 / 35

FOCUS

number of Airbnb accommodations in 2015 amounted to approx. 1 M and as of

10%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Source: HVS, airbnbcitizen & Statistic Denmark

MACROECONOMICS

INVESTMENT MARKET

OCCUPIER MARKET

APPENDIX

HOTEL TRANSACTION VOLUME

The largest transaction conducted in 2016 was the collective acquisition of Hotel Marriott, located at Kalvebod Brygge, by ATP and PensionDanmark for DKK 1.1 bn. In 2017, Wenaasgruppen conducted the largest transaction by the acquisition

Danish

Foreign 5.28

of Hotel Bella Sky for DKK 1.6 bn.

3.01

2.54

The privately held corporation, Strawberry Fields, in charge of Nordic Choice Hotels is highly active on the hotel market in Copenhagen. In 2016, the Norwegian corporation orchestrated an interesting

2 1.37

1.23 1

54%

1.07

92%

70%

87%

92%

0 2012

investment in the historic Centralpostbygning with the intention of transform-

96%

2013

2014

2015

2016

2017

Source: Cushman Wakefield | RED

ing the property into a luxurious hotel with space for 380 rooms expected to HOTEL PIPELINE

NO. OF ROOMS

SUM INVESTED (DKK)

OPENING YEAR

sqm. In 2017, Strawberry Fields continues

Nimb (Tivoli Corner)

21 (room expansion)

N/A

2018

its conquest in Denmark by taking over

Charlottehaven

37 (apartment expansion)

150 M

2018

the operation of Hotel Hilton at Copen-

Moxy

220

90 M

2018

Scandic Meatpacking

370

610 M

2018

Brøchner Hotels, Herman K - Bremerholm 6

< 100 M

2018

Arp-Hansen, Wakeup - Kalvebod brygge

585

N/A

2018

TOTAL IN 2018

1,264

Scandic Falconer

332

N/A

2019

CitizenM - Dagmarhus

230

N/A

2019

open in 2020. The property in Tietgensgade dates back to 1912 and is 25,000

hagen Airport while investing DKK 800 M in the development of a brand-new hotel right next to it. The steady growth of travel and tourism in Denmark has caught the attention of Danish pension funds. In the pursuit of

Zleep Copenhagen Arena

198

N/A

2019

stable yields, these pension funds are

Arp-Hansen, Wakeup Borgergade

220 (room expansion)

N/A

2019

showing strong appetite by investing bil-

Brøchner Hotels, Hotel Ottilia - Carlsbergbyen

156

N/A

2019

lions in the hotel market. As aforemen-

Guldsmeden Hotels - Islands Brygge

200

200 M

2019

tioned, PensionDanmark took part in the

TOTAL IN 2019

1,336

Nordic Choice Hotels - Tietgensgade 37

380

1.3 BN

2020

Comfort Copenhagen Airport Hotel

500

800 M

2020

Scandic Copenhagen Airport

357

566 M

2020

TOTAL IN 2020

1,237

Additionally, ATP is planning on trans-

Scandic Spectrum - Kalvebod brygge

632

1.5 BN

2021

forming one of Copenhagen’s distinctive

TOTAL IN 2021

632

acquisition of Hotel Marriott. Moreover, AP Pension and Finnish pension fund Keva, have agreed to a joint-venture establishment of a 493-room hotel in Nordhavn which will be operated by Comwell.

commercial

properties,

“Ørkenfortet”,

Cabinn - Kalvebod brygge

1,200

N/A

TBA

into a luxury hotel with 400 rooms.

Comwell - Nordhavn

493

< 500 M

TBA

The promising tendencies in the Danish

ATP - Ørkenfortet

400

N/A

TBA

GRAND TOTAL

6,562

hotel market has led to a significant pipeline. These are announced projects currently under development.

FOCUS

MACROECONOMICS

Source: Ejendomswatch, Estate Media & Cushman Wakefield | RED

INVESTMENT MARKET

OCCUPIER MARKET

APPENDIX

ISSUE I 2018

15 / 35

INVESTMENT MARKET - OFFICE INVESTMENTS ARE SPREADING TO OUTSIDE OF COPENHAGEN

The office transaction volume reached

INVESTOR BREAKDOWN – Q1 2017 - Q4 2017

a record high in 2017 with DKK 19.1 bn., which was nearly 20% of the total volume in 2017. Danish investors were the

Private Investors

most active in 2017 constituting 61% of

12%

the volume in the office segment. Real Estate Companies

For the first time in recent years, we have

25%

seen a larger amount of transactions outside Greater Copenhagen, with 36%

Others

of the office transactions being outside

16%

19.1

of Greater Copenhagen which compared to 2015 and 2016 were at 16% and 14% respectively.

BN DKK

The transaction activity in Q4 was supported by Swedish Klövern’s acquisition of Porcelænshaven in Frederiksberg, which consists of 19,300 sqm and included a long-term lease with Copenhagen

Institutional Investors

Business School. The acquisition price is

22%

Property Funds 25%

estimated to be DKK 620 M. The second most notable office transaction in Q4 was Genesta’s acquisition of DSB’s KB32

DANISH INVESTORS - 61 %

FOREIGN INVESTORS - 39 %

located at Kalvebod Brygge 32, with a total size of 28,000 sqm and a price of DKK 520 M. KB32 is facing a full re-de-

20%

40%

60%

80%

100%

velopment by Genesta. We consider the prime yield for office locations in Copenhagen to be at a level of 3.75% supported by recent transactions

Source: Cushman & Wakefield | RED

in the market. This will have a spillover effect on the areas surrounding Copenhagen as we expect a downward pressure in these areas.

ISSUE I 2018

16 / 35

FOCUS

PRIME YIELDS SUBAREA

Q4 2015

Q4 2016

Q4 2017

Copenhagen City (CBD)

4.25%

4.10%

3.75%

Copenhagen E & W

5.75%

5.25%

4.50%

Frederiksberg

5.75%

5.25%

4.50%

Harbour areas

4.25%

4.10%

3.75%

South Harbour

6.00%

5.50%

Ørestad

5.75%

5.50%

Copenhagen N & NW

6.50%

6.25%

6.00%

South and West of Copenhagen

7.25%

7.00%

MACROECONOMICS

INVESTMENT MARKET

OCCUPIER MARKET

APPENDIX

INVESTMENT MARKET - RESIDENTIAL FOREIGN INVESTORS ARE GAINING MARKET SHARE

The residential market demonstrated a

INVESTOR BREAKDOWN – Q1 2017 - Q4 2017

strong performance in 2017 totaling DKK 37.2 bn. worth of transactions, and thereby remained the largest segment across.

Others

Moreover, foreign investors have now

User 1%

reached 62% of the total transaction volume, which compared to 43% in 2016 is a significant increase. The combination of low supply and high

Private Investors

Real Estate Companies

20%

38%

demand is forcing investors to also look

37.2

outside of Copenhagen, such as Aarhus, Aalborg and other larger cities in Denmark. Investments conducted outside of

BN DKK

Copenhagen made up 47% of the total transaction volume in 2017 compared to 19% in 2016. We saw that foreign investors dominated the Copenhagen residential market. On

Property Funds 38%

the contrary, Danish investors held the majority of residential investments outside of Copenhagen.

DANISH INVESTORS - 38 %

In 2017, the top three investors were

FOREIGN INVESTORS - 62 %

Heimstaden, Core Bolig and Patrizia. Heimstaden was by far the most active

investor in the residential segment mak-

20%

40%

60%

80%

100%

ing several significant investments in Copenhagen. Patrizia, another foreign investor, conducted three relatively large

Source: Cushman & Wakefield | RED

investments in Copenhagen. Lastly, Core Bolig was the most active domestic investor with several small investments in

PRIME MARKET RENT DKK/SQM

PRIME YIELDS

which a majority of these were made outside of the Copenhagen area.

SUBAREA

The prime yield in the Copenhagen area

Copenhagen City

of Q4 has depreciated to 3.40%, which is

Copenhagen E, W & N

20 basis points lower than last quarter.

SUBAREA

Q4 2017

2,000 - 2,200

Copenhagen Area - rent control

1.50 - 3.00%

1,700 - 1,900

Copenhagen Suburb - rent control

3.00 - 4.00%

Frederiksberg

2,000 - 2,200

Copenhagen Area - market rent

3.40%

The prime yield in the Copenhagen sub-

North Harbour

2,000 - 2,200

Copenhagen Suburb - market rent

4.50%

urbs are at 4.50%, but we believe it will

South Harbour

1,600 - 1,800

depreciate further going forward.

Copenhagen S

1,500 - 1,700

North of Copenhagen

1,700 - 1,900

FOCUS

MACROECONOMICS

INVESTMENT MARKET

Q4 2017

OCCUPIER MARKET

APPENDIX

ISSUE I 2018

17 / 35

INVESTMENT MARKET - RETAIL SHOPPING CENTRE TRANSACTIONS DOMINATED 2017

The total transaction volume in the re-

INVESTOR BREAKDOWN – Q1 2017 - Q4 2017

tail segment reached an impressive amount of approx. DKK 16.8 bn., which Real Estate Companies

represents 18% of the total transaction volume in 2017. This is the best perform-

Private Investors

ing year we have ever recorded for the

Others 3%

retail segment. Danish investors were the most active investors as they accounted for 55% of the total retail volume. The Danish retail segment experienced

16.8

a Q4 with an enormous transaction volume reaching DKK 12.5 bn. constituting almost twice the total retail transaction

BN DKK

volume of Q1, Q2 and Q3 combined thus making Q4 2017 the most active quarter since Q4 2014. Shopping centres were in focus with almost all major

Property Funds 40%

transactions in Q4 being acquisitions of

Institutional Investors

shopping centres.

46%

The transaction activity in Q4 was propped by ATP’s purchase of a 50% stake in Danica’s Shopping Centre portfolio for DKK 6.9 bn. The centres com-

DANISH INVESTORS - 55 %

FOREIGN INVESTORS - 45 %

prise of approx. 400,000 sqm retail space and approx. 1,100 tenants and at0%

60%

80%

STREET/SUBMARKET

Q4 2015

Q4 2016

Q4 2017

expected to remain stable in the short

Strøget (incl. Vimmelskaftet)

3.60%

3.00%

term, while we expect to see a steady in-

Strøget area

4.75%

4.50%

4.00%

vestment activity. This yield level mainly

Østerbrogade

5.50%

5.25%

reflects high street assets.

Nørrebrogade

5.75%

5.50%

Købmagergade

3.60%

3.00%

Lyngby

5.75%

5.00%

4.75%

4.25%

4.00%

tracts nearly 60 M shoppers yearly.

20%

40%

100%

Other substantial shopping centre transactions include StepStone's DKK 1.5 bn. acquisition of NREP’s shopping centres

Source: Cushman & Wakefield | RED

located mainly in Greater Copenhagen and Jutland, and Blackrock’s DKK 1 bn. acquisition of Næstved Storcenter. The prime yield level in Copenhagen is at an all-time low at 3.00%. The level is

PRIME YIELDS

SHOPPING CENTRES Copenhagen

ISSUE I 2018

18 / 35

FOCUS

MACROECONOMICS

INVESTMENT MARKET

OCCUPIER MARKET

APPENDIX

INVESTMENT MARKET - INDUSTRIAL HIGH ACTIVITY AS INVESTORS SEEKED HIGHER YIELDING ASSETS

We saw an increased interest from inves-

INVESTOR BREAKDOWN – Q1 2017 - Q4 2017

tors towards this segment, as they beReal Estate Companies

lieved that the risk adjusted returns from the segment, in light of yield compres-

Institutional Investors Others 2%

sion elsewhere became more attractive.

Private Investors

The total transaction volume within the

industrial segment in 2017 reached approx. DKK 9.7 bn. This is more than double the total industrial transaction volume of 2015 and 2016 combined, making

9.7

2017 the best performing year for the industrial sector since 2008. NREP’s acquisition of a dozen properties

BN DKK

for estimated DKK 2.4 bn. accounted for 25% of the transaction volume. The properties are located in Jutland, Zealand and in the Greater Copenhagen area.

Property Funds 84%

Investment activity in the industrial segment in Q4 was approx. DKK 950 M, where approx. 58% of the activity was led by foreign investors. Most of the as-

DANISH INVESTORS - 17 %

sets are single let and approx. 60% have

FOREIGN INVESTORS - 83 %

been acquired through sale and leaseback structures.

20%

40%

60%

80%

100%

The transaction activity in Q4 was propped by M7 Real Estates investment on behalf of M7 EREIP IV property fund’s acquisition of 117,00 sqm, includ-

Source: Cushman & Wakefield | RED

ing prime industrial and logistic assets placed in Greater Copenhagen, the island of Funen, and the Triangle area in Jutland. The properties were acquired for DKK 520 M. Prime yield for modern logistics properties with long leases continues to face a downward pressure. Prime yields in the Copenhagen area are now just below

PRIME MARKET RENT

DKK/SQM

PRIME YIELDS

SUBAREA

Q4 2017

SUBAREA

Q4 2017

Copenhagen Area

575

Copenhagen Area

6.00%

Triangle Area

475

Triangle Area

6.25%

Aarhus Area

425

Aarhus Area

6.50%

Modern logistics properties with long leases

6.00%, while they are at 6.25% in the Triangle area in Jutland.

FOCUS

MACROECONOMICS

INVESTMENT MARKET

OCCUPIER MARKET

APPENDIX

ISSUE I 2018

19 / 35

VESTER SØGADE 14 Cushman & Wakefield | RED offers an attractive land plot with a long lease in a public offering on behalf of The Municipality of Copenhagen.

ISSUE I 2018

20 / 35

FOCUS

MACROECONOMICS

INVESTMENT MARKET

OCCUPIER MARKET

APPENDIX

TRANSACTIONS

ISSUE I 2018

21 / 35

TRANSACTIONS

OFFICE STREET STREET NAMENAME

LOCATIONDATE DATESIZE (SQM) SIZE PRICE PRICE VENDOR NAME BUYER TYPE BUYER NAME LOCATION VENDOR TYPE TYPE VENDOR VENDOR NAME BUYER TYPE BUYER NAME (SQM) (M DKK) (M DKK)

Office Portfolio - 8 Properties CPH

27,000

670

Property Fund

Thylander

Real estate company Jeudan

Hedeager 1-5 & Kystvejen Porcelænshaven 16-2829

Århus Frederiksberg2016/Q2Q4

23,600 RealProperty Estate Company 19,300 555.0 620 fund C.W. ObelNiam

Institutional Investor PensionDanmark Real estate company Klövern

Holmens Kanal 2 Kalvebod Brygge 32

CPH City CPH V

2016/Q1Q4

49,065 UserPublic institutionDanske Bank 28,000 1,400.0 520 DSB

Property Fund Investments Property fundStandard Life Genesta

Albanigade 30 Teknikerbyen

Odense Virum

2016/Q1Q4

4,300 Est. 26,000

Private Investor Karsten Bill Rasmussen Institutional investor PensionDanmark

Rytterkasernen Skovbrynet 211

Odense Lyngby

2016/Q1Q4

8,38517,061

61.0 203 Institutional Investor Danica Pension Private Investor Rasmussen Public institution Statens Ejendomssalg Property fundKarsten Bill Unkown foreign investor

Dag Hammarskjolds Ejlskovsgade 3 Allé 28

CPH E Odense

2015/Q4Q4

1,596 25,000

63.0

2015/Q4Q4

8,82611,028 161.0

Overgaden Oven VandetVej 60A60A CPH City Robert Jacobsens CPH S (Søkvæsthuset) Teknikerbyen

Private Investor investor Fritz Henrik Schur 185 Institutional Danica

Public Institution Embassy Property fundThe Turkish NIAM

Public Institution The Danish Armed Forces Private Investor Lennart Lajboschitz 170 Real estate company Atlas Ejendomme Institutional investor Lægernes Pensionskasse

Est. 23,000

10,353

Rahbeks Alle 21 62 Store Kongensgade

Frederiksberg CPH City 2015/Q4Q4

1,7723,285

52.2

78 Real estate company Atlas Ejendomme Institutional Private Investor Private Investor Real Estate Company investor Jeudan Lægernes Pensionskasse

C.F. Richs Stormgade 10Vej 103

Frederiksberg CPH City 2015/Q4Q4

2,3745,030

72.0

68 User Public Institution

Nordre Fasanvej 113-115 Strømmen 6

Frederiksberg2015/Q4Q4 Nørresundby

11,4043,072

73.5

58 Institutional investor Lægernes Pensionskasse UserReal estate company RTX A/S Atlas Ejendomme Private Investor K/S Strømmen

Store Kongensgade 22

Virum

52.3 Institutional Investor Danica Pension Est. 495 Institutional investor SEB

CPH City

Fremtidsvej 1

2015/Q4

CPH Area

Klostergade 28-30

Aarhus Area

1,244

48.5

2,584

122

Institutional investor

SEB

Institutional investor Sampension

Public institution

Bygningsstyrelsen

Real Estate Company JL Ejendom

Other Fund

Erik & Susanna Olesens Almen-

Public institution Kommune velgørendeGladsaxe Fond

Fødevareforbundet Private investor Private investor Freja Ejendomme Property Fund Artha Kapitalforvaltning

Private investor

Real estate company

Ejendomsselskabet Olav De Linde

RETAIL STREET NAME

LOCATION DATE SIZE (SQM)

PRICE VENDOR TYPE VENDOR NAME (M DKK)

BUYER TYPE

BUYER NAME

Institutional investor Danica

Institutional investor

ATP

Property fund

NREP

Property fund

StepStone Blackrock

Danica's Shopping CPH Area Center Portfolio 50%

Est. 400,000

6,900

Project Peach 7 Shopping units

Denmark

74,000

Est. 1,500

Næstved Storcenter

Næstved

42,633

978

Other

Dansk Supermarked

Property fund

Project Peach II 16 Properties

Denmark

24,000

520

Property fund

NREP

Real estate company JT Ross

Graham Bells Vej 13C Aarhus

8,465

144

User

Ilva

User

Frederiksborggade 7 CPH City

1,339

Institutional investor Marylebone Asset Management Property fund

Quadoro Doric Real Estate

Amagerbrogade 82

CPH S

2,986

Property fund

Capman

Developer

Copi Group

Industrivænget 2

Hillerød

4,327

Private Investor

Jysk Holding A/S

HOTEL HOTEL NAME

LOCATION

DATE

Comwell Hotel - Nordhavn (Project)

North Harbor

ISSUE I 2018

22 / 35

FOCUS

PRICE PER ROOM (DKK)

MACROECONOMICS

PRICE (M DKK) VENDOR NAME

Est. 1,500,000

INVESTMENT MARKET

Est. 740

KPC

OCCUPIER MARKET

BUYER NAME AP Pension & Keva

APPENDIX

RESIDENTIAL STREET NAME

LOCATION DATE

SIZE (SQM)

PRICE VENDOR TYPE VENDOR NAME (M DKK)

BUYER TYPE

BUYER NAME

Marmorbyen

North Harbor

27,600

> 1,000

Institutional investor Pensam

Property fund

Patrizia

Risskov Brynet

Aarhus Area

32,967

Est. 900

Scherfigs Have

CPH E

12,801

680

Developer

Property fund

Capman

Property Block - 4 Properties CPH W

12,799

314

Student Housing Project

Frederiksberg

8,240

300

Real estate company Wind Ejendomme

Real estate company Heimstaden

Havnehusene

Horsens

10,200

260

Developer

Real estate company Heimstaden

P2 - Valby

CPH Area

6,833

Confidential

Real estate company DFE

Property fund

Europa Capital

Nimbusparken 34

Frederiksberg

5,019

156

Real estate company DFE

Property fund

CBS Boligfond

Residential Portfolio - 4 Properties

Aarhus

4,499

125

Developer

Private Investor

Poul Thyregod

Åboulevard 27

Frederiksberg

2,614

120

Real estate company M. Goldschmidt Holding

Institutional investor

Lægernes Pensionskasse

Ryesgade 50

CPH E

3,961

Private investor

Real estate company Heimstaden

Birkedommervej 1

CPH Area

5,942

Institutional investor Pensam

Property fund

Core Bolig

Gammel Kongevej 152A

Frederiksberg

2,868

Private investor

Property fund

Blackstone

Jernbane Alle 48

CPH Area

1,874

Real estate company M. Goldschmidt Holding

Institutional investor

Lægernes Pensionskasse

Residential project

Rødovre

2,345

Developer

Other

Samrådets Boligsselskab

Jernbane Alle 31

CPH Area

2,236

Real estate company Atlas Ejendomme

Institutional investor

Lægernes Pensionskasse

Herluf Trolles Gade 3

CPH City

1,981

Other

Property fund

Blackstone

Domis

Institutional investor Pensam Real estate company

Real estate company Heimstaden

Admiral Capital & Ejendomsselskabet Norden

Property fund

RHB Development

Domis

Private investor

Elf Development

Other

Blackstone

INDUSTRIAL STREET NAME

LOCATION

DATE

SIZE PRICE VENDOR TYPE (SQM) (M DKK)

M7 EREIP IV - Logistic Fund

Denmark

115,327

519

Nymøllevej 78

Lyngby

7,310

Real estate company Atlas Ejendomme

Charles Lindberghs Vej 8, 9 & 13

Jutland

25,124

Property fund

User

VENDOR NAME BUYER TYPE

BUYER NAME

User

Property Fund

M7 Real Estate

Institutional investor

Lægernes Pensionskasse

Real estate company

Jansen Ejendomme

Blackstone

LAND STREET NAME

PURPOSE

LOCATION

DATE

SIZE (SQM. OF PRICE PER SQM. OF PRICE (M BUILDING RIGHT) BUILDING RIGHT DKK)

VENDOR NAME

Amager Strandvej 50-54 Residential

CPH S

3,324

Est. 10,270

Ved Amagerbanen 39

Residential

CPH S

19,840

Est. 10,270

Est. 204 DFE

Gefion Group

Ved Amagerbanen 37

Residential

CPH S

7,537

Est. 10,270

Est. 77 DFE

Gefion Group

FOCUS

MACROECONOMICS

INVESTMENT MARKET

Est. 34 Dansk Merchant Capital

BUYER NAME

OCCUPIER MARKET

APPENDIX

Gefion Group

ISSUE I 2018

23 / 35

60%

32%

21% 29%

15%

11%

BOOZT.COM As the first eCommerce retailer to open a physical store in Denmark on a high-street location, Cushman & Wakefield | RED advised Boozt.com with their forthcoming opening this spring.

ISSUE I 2018

24 / 35

FOCUS

MACROECONOMICS

INVESTMENT MARKET

OCCUPIER MARKET

APPENDIX

OCCUPIER MARKET

ISSUE I 2018

25 / 35

OCCUPIER MARKET - OFFICE OPEN PLAN OFFICES TRENDING

SIGNIFICANT LEASES STREET NAME

LOCATION

DATE

SIZE (SQM)

TENANT

throughout 2018. The interest for multi-us-

Tuborg Boulevard 12

Hellerup

Q4 2017

7,339

Ascendis Pharma

er properties with shared common-facili-

Niels Hemmingsensgade 24

CPH City

Q4 2017

3,355

Unity

ties is something property owners must

Rådhuspladsen 45

CPH City

Q4 2017

2,276

Kantar Gallup

be aware of, when refurbishing and re-let-

Adelgade 12

CPH City

Q4 2017

1,204

AndCO A/S

ting their properties. The concept has be-

Rued Langgards Vej 6-8

CPH S

Q4 2017

2,078

Exerp

come popular through offering flexible

Lersø Parkallé 112

CPH E

Q4 2017

1,300

OK-Fonden

leases in attractive surroundings, and cre-

Kongens Nytorv 8

CPH City

Q4 2017

570

Executive Search Virksomhed

ating gathering points for small to medi-

Klausdalsbrovej 601

CPH Area

Q4 2017

21,802

Nets A/S

um businesses, who benefits from shared

Arne Jacobsens Allé 7

CPH S

Q4 2017

1,747

Swire Blue Ocean A/S

canteens, better facilities and flexible sur-

Østre Havnegade 12

Aalborg

Q3 2017

4,048

Flere lejere

roundings for growth.

Slet Parkvej

Aarhus

Q3 2017

8,782

SKAT - Bygningstyrelsen

Nansensgade 19

CPH City

Q3 2017

1,450

American Express - GBT

Throughout the last two quarters of 2017,

Emdrupvej 28

CPH E

Q3 2017

3,050

Abvie

we have seen some significant leases.

Tuborg Boulevard 12

Hellerup

Q3 2017

1,202

Stena Weco

-5

0.00% 0.00% 0,00%

-10

penhagen in the first half of 2017, which for Greater Copenhagen stabilized in Q3 and Q4 of 2017. The vacancy rate is still decreasing in Copenhagen City, and as a result, the rent level is increasing. Overall, the rent levels in Greater Copen-

Vacancy Copenhagen Vacancy rate Copenhagen City Vacancy raterate Copenhagen CityCity

Vacancy rate Copenhagen area Area Vacancy rate Copenhagen Vacancy rate Copenhagen Area

Unemployment Copenhagen Area Unemployment Copenhagen Area

Source: Statistics Denmark & Ejendomstorvet.dk

PRIME RENT DKK/SQM SUBAREA

2017 Q4

hagen has increased in 2017. As supply is

Copenhagen City (CBD)

1,800

low in Central Copenhagen, we see com-

Copenhagen E & W

1,350

panies seeking towards the outer areas

Frederiksberg

1,400

of Copenhagen, as rent levels here are

Harbour areas

1,850

lower. Despite the high rent levels, Cen-

South Harbour

1,300

tral Copenhagen continues to be popular,

Ørestad

1,450

partly due to easier acces to a sufficient

Copenhagen N & NW

1,250

workforce.

South and west of Copenhagen

1,000

North of Copenhagen

1,300

*Base rents ex. service charges

ISSUE I 2018

26 / 35

FOCUS

MACROECONOMICS

INVESTMENT  MARKET

Q1 Q22017 2017 Q3 2016

1.00% 2.00% 2,00% 0.50%

Q3 Q4 2016 Q12016 2016 Q4Q12016 2017

We saw decreasing vacancy rates in Co-

Q1 Q22016 2016 Q3 2015 Q2 Q32016 2016

central Copenhagen.

2.00% 4.00% 4,00% 1.50%

Q3 Q42015 2015 Q1 2015 Q4 Q12015 2016

of this significant size are uncommon in

Q1 Q22015 2015 Q3 2014 Q2 Q32015 2015

outside of Central Copenhagen. Leases

6.00% 6,00% 2.50%

Q3 Q42014 2014 Q1 2014 Q4Q12014 2015

easily accessed by car, as it is situated

3.50% 8.00% 8,00% 3.00%

Q22014 2014 Q1 Q32014 2013 Q3 2014 Q2

of Greater Copenhagen, and the lease is

4.50% 10.00% 10,00% 4.00%

Q42013 2013 Q3 Q1 2013 Q12013 2014 Q4

on Klausdalsbrovej 601. Ballerup is part

12.00% 12,00% 5.00%

Q32013 2013 Q2 Q3 2012

In Ballerup, Nets A/S let 21,802 sqm lease

Q12012 2013 Q4 Q1 2012 Q22013 2013 Q1

Pharma let 7,339 sqm in January.

Office vacancy rates compared to unemployment in Copenhagen

Q32012 2012 Q2 Q3 2011 Q42012 2012 Q3

of Central Copenhagen, where Ascendis

VACANCY AND UNEMPLOYMENT RATES

2012 Q4Q12011 Q1 2011 Q22012 2012 Q1

beautiful multi-user building, just north

2011 Q2Q32011 Q3 2010 Q42011 2011 Q3

Latest on Tuborg Boulevard 12, in the

Q1 2010 2011 Q1Q22011

development to continue its growth

OCCUPIER MARKET

APPENDIX

Q3 Q42017 2017

throughout 2017, and we expect this

Q2 Q32017 2017

Open plan offices have been trending

OCCUPIER MARKET - RETAIL GREATER INTEREST FOR THE SECONDARY AREAS

The common occupier’s usual center of attention is the square, Amagertorv,

SIGNIFICANT LEASES STREET NAME

LOCATION

DATE

Købmagergade 39

CPH City

2017/Q4

758

Boozt.com

Vimmelskaftet 36

CPH City

2017/Q4

163

Trend

Købmagergade 37

CPH City

2017/Q4

391

Asics

Vesterbrogade 2D

CPH City

2017/Q4

1,482

As expected, Chanel broke the pattern

Lyngby Hovedgade 39

Kgs. Lyngby

2017/Q4

516

Imerco

and chose a location for the store a bit

Kongens Nytorv 28

CPH City

2017/Q4

N/A

Chanel

outside the usual area for international

Købmagergade 47

CPH City

2017/Q4

538

Weekday

businesses, who most often place them-

Østergade 1

CPH City

2017/Q4

104

John Henric

selves in the Amagertorv area, where the

Frederiksborggade 5

CPH City

2017/Q4

N/A

Yousee

supply of available leases has become

Købmagergade 7

CPH City

2017/Q4

125

DAY - Birger et Mikkelsen

rather limited if not non-existing at all.

Østergade 13

CPH City

2017/Q4

247

Hvelplund

Chanel has published that their store will

Axel Towers

CPH V

2017/Q3

219

Joe & the Juice

be located on Kongens Nytorv 28.

Store Standstræde 14

CPH City

2017/Q3

which is housing luxury retailers such as Hermès, Louis Vuitton and Prada, however, the highstreets leading up to Amagertorv have been buzzing with activity.

SIZE (SQM)

NEW TENANT

Old Irish Pub

Le Labo

Another big surprise in Q4 2017 was the online retailer Boozt.com, who is moving

PRIME RENT DKK/SQM - ZONE A

in on Købmagergade 39, which makes it the first eCommerce retailer to fully

SUBAREA

2016 Q4

2017 Q4

CHANGE

commit to an upscale physical store in

Strøget (incl. Vimmelskaftet)

23,000

23,500

2.00%

Denmark on a high-street location.

Strøget area - side streets

10,000

10,500

5.00%

With the opening off Boozt.com, we are

Købmagergade

22,000

22,500

2.00%

excited to see how omnichannel will af-

Østerbrogade

7,000

0.00%

fect the retail market in Denmark. We

Nørrebrogade

3,500

0.00%

expect to see other eCommerce businesses invest in brick-and-mortar in the

VACANCY RATES AND CONSUMER CONFIDENCE

high-street area.

Retail vacancy rates compared to consumer confidence in Copenhagen

There is a continued low leasing activity at the last part of Strøget from Gammeltorv to City Hall Square. The area is still suffering from the ongoing development of the metro city line at City Hall

5.00%

4.50% 4.00%

3.50% 3.00%

Source: Statistics Denmark & Ejendomsstorvet.dk

Square, which is expected to be com-

2.50%

pleted in 2019.

2.00%

1.50%

the Strøget area, we expect to see a

Q3 2017

Q4 2017

Q1 2017

Q2 2017

Q3 2016

Q4 2016

Q1 2016

Q2 2016

Q3 2015

Q4 2015

Q1 2015

Vacancy rate Copenhagen area

Q2 2015

Q3 2014

Q4 2014

Q1 2014

Q2 2014

Q3 2013

Q4 2013

Q1 2013

Q2 2013

Q3 2012

Vacancy rate Copenhagen City

Q4 2012

Q1 2012

Q2 2012

Q3 2011

Q4 2011

Q1 2011

-10 Q2 2011

to the increase in 2017. On Strøget and

0.00% Q4 2010

increase in the secondary areas, similar

-5

Q2 2010

ther throughout 2018. We expect a slight

1.00% 0.50%

Q3 2010

The rent level is expected to increase fur-

Consumer confidence index

Source: Statistics Denmark & Ejendomsstorvet.dk

larger increase in rent levels, than seen in 2017.

FOCUS

MACROECONOMICS

INVESTMENT  MARKET

OCCUPIER MARKET

APPENDIX

ISSUE I 2018

27 / 35

FOOTFALL ANALYSIS BLACK FRIDAY HAS GOTTEN A HOLD OF THE DANISH SHOPPERS AND RETAILERS

In the fourth quarter of 2017, we observed

effect, the footfall count during the last

a significant increase in footfall on the

Friday before Christmas in 2017 was 5%

prime shopping streets of Copenhagen

higher compared to the corresponding

compared to the fourth quarter of 2016.

Friday in 2016. This was primarily based

This is demonstrated by the positive

on the huge number of pedestrians on

change in pedestrians on several of the

Amagertorv which nearly hit the same

streets listed to the right. The greatest

level as on Black Friday.

7,100 Kultorvet

change is observed from the significant footfall counts will continue to increase

tailer, Hermès, also opened on the corner

gradually in the respective areas with

of Amagertorv and Læderstræde which

constructions sites nearing completion

may have been effective in drawing more

and opening of new stores.

Amagertorv. During Q4 the high-end re-

gad

As of 2018, it is our expectation that the

ager Købm

increase in the number of pedestrians on

pedestrians towards this area. Furthermore, the positive change in pedestrians on Østergade is expected to increase even further following the completion of the construction on Kongens Nytorv, as this involves a relocation of the main stairs from the Metro forcing pedestrians towards Strøget. The number of footfalls around the high streets of Copenhagen between the fourth quarter of 2016 and 2017 shows adequate improvement with a growth of 5% which is slightly higher than previous year indicating a relatively increasing progress. In general, there has been a 4% increase in the number of footfalls in 2017 compared to 2016.

Vimme

BLACK FRIDAY Once again, Black Friday became the pin-

Nyg

nacle of the footfall counts. On this day, we saw 81% more people on Strøget and

Gammeltorv

66% on Købmagergade compared to an

average Friday during 2017, which clear-

7,400

ly shows the event has gotten a hold of the Danish shoppers and retailers. In fact, 2017 is now the record year for footfall counts on Black Friday with an increase of approx. 6% from 2016.

rik

e red

g erg

CHRISTMAS SHOPPING In terms of the late Christmas shopping

ISSUE I 2018

28 / 35

FOCUS

MACROECONOMICS INVESTMENT  MARKET Rådhuspladsen

OCCUPIER MARKET

APPENDIX

FOOTFALL COUNTS IN Q4 2016 AND Q4 2017

THE MAP

NO. STREET NAME

The map shows the counting points and the average footfall per hour the last 12 months.

5,300

Q4 2016 Q4 2017

CHANGE

Amagertorv

5,388

7,272

1,884

Østergade

5,078

6,635

1,556

Pilestræde/Kronprinsensgade

2,340

2,855

515

Frederiksberggade

6,907

7,360

453

Vimmelskaftet/Amagertorv

5,845

6,215

370

Købmagergade/Silkegade

6,164

6,314

150

Frederiksborggade/Købmagergade

7,060

7,138

Købmagergade/Valkendorfsgade

6,463

5,917

-547

Rundetårn

6,003

5,326

-678

Købmagergade/Løvstræde

5,917

5,042

-876

2,900

10.

5,000 Kgs. Nytorv

5,900

ade

2. sterg Ø

6,600 6.

6,300 Købm ager

gade

gad

Øster 1.

ertorv

Amag

6,200

7,300

elskaftet

AVERAGE FOOTFALL COUNT 9,100

9,000 8,000

8,547 7,670

7,000 6,387

6,801

7,057

6,000 5,000

COUNTING METHODOLOGY

4,000

RED carries out the counts on Fridays at 4 pm with the purpose of registrering a development and conclude a level of footfall at different locations on Strøget and Købmagergade. The footfall is counted manually from both directions.

FOCUS

MACROECONOMICS

3,000 2,000 1,000 0

2015 Black Friday

INVESTMENT  MARKET

OCCUPIER MARKET

2016

2017

Christmas

Average Friday

APPENDIX

ISSUE I 2018

29 / 35

PIER 47 Pier 47 is a prominent and innovative office property located at Langelinie which offers architect designed offices. Rainmaking Loft opens a co-working office space for digital innovaters in the north end of the property. The middle and south end still offers available office space of 4,732 - 13,838 sqm. Contact Cushman & Wakefield | RED for more information at office@cw-red.

ISSUE I 2018

30 / 35

FOCUS

MACROECONOMICS

INVESTMENT  MARKET

OCCUPIER MARKET

APPENDIX

APPENDIX - DANISH TRANSLATION

ISSUE I 2018

31 / 35

ENGLISH VERSION AT PAGE 6

UDGIVELSE I FOKUS DANSKE SHOPPINGCENTRE ER FORTSAT EFTERTRAGTEDE

SAMTIDIG MED AT SHOPPINGCENTER

fra Credit Suisse formentligt ikke sker

MARKEDET I USA ER UNDER HÅRDT

i Danmark. Dette er blandt andet fordi

PRES, VAR 2017 ET REKORDÅR FOR

den danske planlov har begrænset an-

DANSKE

TRAN-

tallet af shoppingcentre, hvilket også

SAKTIONER. DEN SAMLEDE RETAIL

har medført at Danmark har det laveste

TRANSAKTIONSVOLUMEN MERE END

GLA (gross letting area) i norden. Om-

FORDOBLEDE FRA 2016, OG ENDTE

vendt har USA verdens højeste GLA,

I 2017 PÅ REKORDSTORE 17 MIA. KR.

og derfor også den højeste interne

DETTE BELØB VAR PRIMÆRT DREVET

konkurrence. Derudover har Danmark i

AF SHOPPINGCENTRE, HVIS ANDEL

øjeblikket ikke off-market retailers som

STOD FOR HELE 9,6 MIA. KR.

TJ Maxx til at konkurrere med de tra-

DET

SHOPPINGCENTER

DANSKE

MARKED FRA DET

SHOPPINGCENTER DELVIST

BESKYTTET

KAOS SOM HERSKER PÅ

DET AMERIKANSKE MARKED, OG SELVOM ECOMMERCE TAGER EN STADIG STØRRE DEL AF DET DANSKE RETAIL MARKED, ER INVESTORERNE I DANMARK OPTIMISTISKE, DA DET FORVENTES AT NY TEKNOLOGI OG EN OPTIMERING AF LEJERSAMMENSÆTNINGEN FREM- ADRETTET VIL GIVE ET

TILFREDS-

STILLENDE

AFKAST.

Sidste år var banken Credit Suisse

RETAIL TRANSAKTIONER 1212 mia. kr. 57%

1010 mia. kr. 8 mia. 8 kr.

43%

6 mia. 6 kr.

71% 9.6

mia kr.

4 mia. 4 kr. 29%

2 mia. 2 kr.

7.2

mia. kr.

5.2

mia. kr.

2.2

mia. kr.

2016

2017

ditionelle retailers. Dermed ikke sagt

Shoppingcenter transaktioner

at denne type retailer ikke kan træde

Andre retail transaktioner

ind på markedet, der ses bare ikke nogle eksempler på dette i øjeblikket.

ECOMMERCE – EN BOMBE UNDER DANSK RETAIL? Ecommerce er umiddelbart den største trussel

mod

det

traditionelle

Kilde: Cushman & Wakefield | RED

alvorligt, og vi er ikke i en situation, hvor vi vil udkonkurrere e-handel. Vi vil bruge e-handlen til at udvikle vore centre yderligere”.

retail

I 2017 voksede eCommerce andelen til

marked og heraf også shoppingcentre.

10,4% af den samlede retail handel i Dan-

Den kommercielle direktør Jakob Møller

mark. Og selvom det tal i sig selv ikke er

fra Dades, en af Danmarks største shop-

katastrofalt, har vi observeret en tydelig

pingcenter aktører, har udtalt til Børsen:

voksende tendens, som vil udfordre den

”E-handel er noget, vi tager meget

danske fysiske retail industri.

ude og spå at 25% af de amerikanske shoppingcentre ville lukke og forsvinde i den nærmeste fremtid, grundet

20 ECOMMERCE ANDEL AF TOTAL RETAIL OMSÆTNING 17.8%

en voksende konkurrence fra eCommerce, samt forbrugernes præference med at handle ved off-price retailers som handler varer udenfor sæson til

15%

15.1%

14.8%

lavere priser. Til trods for de grumme spådomme på det amerikanske marked, har det danske marked oplevet en rekordstor interesse fra investorer i 2017.

10.4%

10%

8.8%

Dette er et klart signal fra investorerne om, at de ikke forventer lignende tilstande i Danmark, men hvorfor det?

DANSKE

SHOPPINGCENTRE

BESKYTTEDE Der er store strukturelle forskelle imellem det danske og amerikanske marked, hvilket også betyder at spådommen

Danmark 2014

Europa gennemsnit 2015

England 2016

Tyskland

USA

2017(f)

Kilde: CRR, RetailMeNot, Statista, Cushman & Wakefield

ISSUE I 2018

32 / 35

FOCUS

MACROECONOMICS

INVESTMENT  MARKET

OCCUPIER MARKET

APPENDIX

SHOPPINGCENTRE TIL SALG

SHOPPINGCENTRE SOLGT 2016-2017

NYE SHOPPINGCENTRE Broen Esbjerg Kronen Vanløse Strædet Køge

FOCUS

MACROECONOMICS

INVESTMENT  MARKET

OCCUPIER  MARKET

APPENDIX

ISSUE I 2018

33 / 35

ENGLISH VERSION AT PAGE 6

UDGIVELSE I FOKUS Derudover kan vi se at eCommerce

Men på trods af de udfordringer som

fra deres konto og sender en kvittering

andelen i vores nabomarkeder, Tysk-

e-handel har ført med, ligeledes skaber

på de indkøbte varer. Bestseller har lavet

land og England, vokser endnu hurti-

udviklingen også muligheder som danske

et lignende koncept i to Kinesiske tøjbu-

gere, og har nu nået niveauer på mel-

shoppingcentre kan tage til sig.

tikker, hvor kunderne kan betale for deres

lem 14,8% og 17,8%. Alt andet lige vil eCommerce formentligt fortsætte sin vækst i Danmark, og hvis eCommerce giganter som Amazon for alvor slår sig ned i Danmark, kan vi forvente at eCommerce andelen vokser endnu hurtigere.

FOKUS PÅ ECOMMERCE RESISTANTE LEJERE

Vi forventer at Augmented Reality (AR) i fremtiden vil forbedre den fysiske shopping oplevelse, samt at Big Data kan

varer ved hjælp af ansigtsgenkendelses teknologi, hvilket fjerner kø og gør både kreditkort og kontanter overflødige.

skabe grundlag for optimering af centre

”Den danske retail industri er tvunget til

og give managers et bedre overblik over

at tilpasse sig de nuværende og fremti-

forbruger tendenser. Dette inkluderer en

dige trends som forandrer industrien. En

kortlægning af forbrugeren, samt hvor og

uvillighed til at tilpasse sig, vil forment-

hvornår shopperne bevæger sig.

ligt føre til en tabt markedsandel. Der er

I takt med at konkurrencen på retail

Et andet eksempel på udnyttelse af ny

markedet vokser, skal indsatsen fra

teknologi inden for fysisk retail er Ama-

shoppingcentre øges for at imødegå de

zons nyligt åbnede dagligvarer koncept

udfordringer som de står overfor. Dette

– Amazon Go. Butikken bruger et kom-

indebærer blandt andet, at indføre en

plekst computerprogram samt kameraer,

mere divers lejersammensætning, hvor

algoritmer og avancerede sensorer til at

andelen af traditionelle retail butikker

registrere alle varer som kunderne ligger

formindskes og andelen af lejere hvis

i deres kurv. Når kunderne forlader butik-

services ikke kan substitueres forøges.

ken trækker Amazon automatisk beløbet

tydelige muligheder for shoppingcentre, som skal identificeres og udnyttes” siger managing partner Nicholas Thurø fra Cushman & Wakefield | RED.

ECOMMERCE ECOMMERCE RESISTANT RESISTANTETENANTS LEJERE • Apotek • Restaurant og Café • Biograf • Offentlige Instutitioner • Fitness

En af de vigtigste lejere, i denne sammenhæng er restauratører. Vi kan allerede berette om forøget fokus på denne type lejer, da Fields blandt andre har sat benhårdt ind på madområdet ved at tiltrække en række restauranter til deres øverste etage. Lyngby Storcenter har ligeledes også ændret de centrale arealer til at imødekomme mere restauration.

TEKNOLOGIEN FORBEDRER SHOPPING OPLEVESEN Teknologiens udvikling har skabt en forstyrrelse på det danske retail marked. ISSUE I 2018

34 / 35

FOCUS

MACROECONOMICS

INVESTMENT  MARKET

OCCUPIER MARKET

APPENDIX

OUTLOOK

FAKTA BOKS

Imens det fysiske retail marked er under forandring fra ny teknolog og nye for-

2017 var et rekordår for de danske shoppingcenter transaktioner, da vi

brugerpræferencer har investorerne sta-

har observeret aktivitet for hele 9,6 mia. kr.

dig tiltro til shopping centre som et aktiv der kan generere et acceptabelt afkast. For nyligt har vi set eCommerce retailers åbne fysiske butikker. Boozt har åbnet en strøgbutik, hvilket er et signal om, at shopperne stadig kræver den fysiske tilstedeværelse for deres shopping oplev-

Særligt var ATP’s køb af 50% af Danicas shoppingcenter portefølje for 6,9 mia. kr., et udtryk for investorernes fortsatte tiltro til shoppingcentre. Andre store shoppingcenter handler indebærer Blackrocks køb af Næstved Storcenter for ca. 1 mia. kr., samt salget af NREP’s shopping portefølje for ca. 1,5 mia. kr. Dette viser en uanfægtet tiltro til et fortsat godt risikojusteret afkast.

else, der er dermed stadig behov for fy-

Derudover, er Dades i øjeblikket i markedet efter en køber til et joint

siske butikker, selvom eCommerce tager

venture af deres 12 shoppingcentre i Danmark.

større markedsandel. Med en agil tilgang, samt en villighed til at investere og tilpasse sig den nye teknologi, tror vi på at shoppingcenter investorerne kan blive ved med at skabe positive risikojusterede afkast i fremtiden.

PROJECT OCEAN Cushman & Wakefield | RED var køberrådgiver for ATP i deres overtagelse af 50% af Danica’s shoppingcenter portefølje bestående af 16 centre for ca. 6,9 mia. kr.

FOCUS

MACROECONOMICS

INVESTMENT  MARKET

OCCUPIER  MARKET

APPENDIX

ISSUE I 2018

35 / 35

TRY OUR DYNAMIC ANALYSIS TOOL AT CW-RED.DK Cushman & Wakefield | RED has throughout the years worked structured and intense to increase the transparency on the Danish commercial real estate market. We have therefore introduced a dynamic research tool on our website that allows you to perform your own analysis by using our underlying market data. Enjoy!

CUSHMAN & WAKEFIELD | RED +45 33 13 13 99 Â· RED@CW-RED.DK