RED – Danish Investment Atlas by Cushman & Wakefield RED

RETAIL

2021

HOTEL

DANISH INVESTMENT ATLAS LOGISTICS

OFFICE

RESIDENTIAL

ANNUAL REVIEW

73.2

33% Foreign

16.4 BN DKK

22%

BN DKK

GREATER COPENHAGEN Danish 33% Foreign 67% GREATER AARHUS COPENHAGEN Danish 69% Danish 33% Foreign 31% Foreign 67%

VOLUMEN 6.9 & INVESTORER 2020 16.4 BN DKK BN DKK

9% 22% VOLUME & INVESTORS 2020

9.1 BN DKK

12%

Danish 28%

OTHER ZEALAND Danish 46% Foreign 54% AALBORG OTHER ZEALAND Danish 100% Danish 46% Foreign 0% Foreign 54%

2.3 9.1

Foreign 72%

BN DKK Danish 28% BN DKK

3% 12%

Danish 28% Foreign 72%

24.3

Foreign 72%

2.7 BN DKK

FUNEN

Foreign 42%

Danish

BN DKK BN DKK

16% 4% Danish Foreign

BN DKK

Foreign 60%

Danish 58% 33%

11.6 2.7

6.9

Foreign

16.4

BN DKK

OTHER JUTLAND FUNEN Danish 44% Danish 58%BN DKK Foreign 56% Foreign 42% 33% GREATER COPENHAGEN

24.3

BN DKK

Foreign 72%

9.1

Foreign 67%

24.3

Danish 46%

AALBORG BN DKK

Foreign 54%

12% Danish 100% Danish 28%

BN DKK

AARHUS

33%

COPENHAGEN

24.3 24.3

Danish 40% BN DKK

BN DKK 60% Foreign

33% 33%

COPENHAGEN COPENHAGEN Danish 40% Danish 40% Foreign 60% Foreign 60%

Foreign 0% AALBORG

Foreign 72%

Danish 100% BN DKK

Danish 28% Foreign 0% 12% FUNEN Foreign 72%

2.7

Danish

4% Danish Danish 44%

Foreign

Foreign Foreign 56%

11.6 16%

2.7

Danish

Danish 44%BN DKK

Foreign

4% Foreign 56% Danish AARHUS

6.9 BN DKK

Danish 46% Foreign 54%

16.4 BN DKK

Foreign 42%

OTHER JUTLAND

22% FUNEN

FUNEN

9.1 BN DKK

12%

Danish 28% Foreign 72%

BN DKK

2.3 BN DKK

Danish 28%

9% AALBORG

16.4 16.4

Danish 33% BN DKK

BN DKK 67% Foreign

22% 22%

GREATER GREATER COPENHAGEN COPENHAGEN Danish 33% Danish 33% Foreign 67% Foreign 67% COPENHAGEN

Foreign 42%

Danish 69%

6.9

GREATER COPENHAGEN

ZEALAND

Danish 58%

Foreign

Foreign 31%

GREATER COPENHAGEN

OTHER ZEALAND

Danish 58%

DKK OTHER BN JUTLAND

BN DKK

9.1

ZEALAND OTHER ZEALAND OTHER OTHER ZEALAND Danish 46% Danish 46% Danish 46% BN DKK Foreign 54% BN DKK 54% Foreign Danish 28% Foreign 54%

9.1 9.1 12% 12%

Danish 28%

Foreign 72% Foreign 72%

AARHUS Danish 69% Foreign 31%

2.7

Danish 100% Foreign 0%

BN DKK

4% Danish

Foreign 72%

Foreign

AALBORG

FUNEN

2.7 2.7

Danish 58% BN DKK

BN DKK 42% Foreign

4% 4%

Danish Danish

Foreign Foreign

VOLU IN TO

BN D

Foreign 72%

JUTLAND

Foreign

Danish 33%

Foreign 31% 22% OTHER ZEALAND

Danish 28%

16%

73.2

Danish 4

GREATER COPENHAGEN

Danish 69%BN DKK

BN DKK

VOLUME IN TOTAL

BN DKK

16.4

AARHUS

2.3

11.6

Foreign 60%

Foreign 31%

Danish 28%

Danish 40%

Foreign 54%

Foreign 67%

Danish 69% 22%

BN DKK

AALBORG COPENHAGEN

Danish 46%

Danish 33%

AARHUS

6.9 2.3

73.2

Danish 40%

BN DKK

Danish

Foreign

VOLUME IN TOTAL

COPENHAGEN

FUNEN FUNEN Danish 58% Source: C&W |58% RED Danish Foreign 42% Foreign 42%

ANNUAL REVIEW

VELKOMMEN WELCOME

 Se den geografiske fordeling og de største investorer i Volumen & investorer 2020  Læse om de største transaktioner i Top 5 transaktioner 2020  Fordybe dig i vores valgte nedslag i markedet i Highlights  Læse om vores bud på udviklingen i segmentet i Forventninger til 2021

God læselyst Nicholas Thurø, Managing Partner

 Se de største transaktioner og nøgletal i Transaktioner & nøgletal

Dear reader, Welcome to “RED – Danish Investment Atlas 2021” which provides an overview of the largest real estate segments and transactions in the previous year. RED uses many resources on collecting and verifying the data on the individual transactions on the Danish market, and on the coming pages you can get a detailed insight into the Danish market for commercial real estate – segment by segment, which is based on our extensive data and thorough analysis. All data is also available on our website, where you can assemble your own charts in our “dynamic analysis tool”. The report is structured as an easily accessible reference work, where you can either get a quick overview of a single segment or immerse yourself in the details.

The residential, office, logistics, retail, and hotel segments each have their own sections where you can:

OFFICE

Rapporten er opbygget som et let tilgængeligt opslagsværk, hvor du enten hurtigt kan skabe dig et overblik over et enkelt segment eller fordybe dig i detaljerne�

 Få et overblik over udviklingen i markedet i Investeringsmarkedet 2020

LOGISTICS

RED bruger mange ressourcer på at indsamle og kvalitetssikre data om de enkelte transaktioner på det danske marked, og på de kommende sider kan du – baseret på vores omfattende data og analyser – få et detaljeret indblik i det kommercielle danske ejendomsmarked – segment for segment� Alle data er ligeledes tilgængelige på vores hjemmeside, hvor du selv kan sammensætte dine grafer i vores ”dynamiske analyseværktøj”�

Bolig-, kontor-, logistik-, retail- og hotelsegmenterne har hvert sit afsnit, hvor du kan:

 Get an overview of the development in the market in Investment Market 2020  See the geographical distribution and the largest investors in Volume & Investors 2020  Read about the largest transactions in Top 5 Transactions 2020  Immerse yourself in our chosen subject about the market in Highlights

RETAIL

Velkommen til ”RED – Danish Investment Atlas 2021” som giver et overblik over de største ejendomssegmenter og handler i det forgange år�

RESIDENTIAL

Kære læser,

 Read about our expectations for the segment in Expectations for 2021

Enjoy the report  See the largest transactions and key figures in Transactions & Key Figures

HOTEL

Nicholas Thurø, Managing Partner

RED – Danish Investment Atlas 2021

EXECUTIVE SUMMARY EXECUTIVE SUMMARY Tillid til markedet sikrer fremgang i volumen Uagtet at både covid-19 og politiske indgreb førte til usikkerheder på ejendomsmarkedet nåede volumen i 2020 op på 73,2 mia� kr� Sammenholdt med 2019 hvor volumen var på 61,6 mia� kr�, er der tale om en vækst på 19%, hvilket vidner om en stor tillid til det danske ejendomsmarked� Et turbulent år Dermed ikke sagt at covid-19 ikke påvirkede ejendomsmarkedet� 2020 startede stærkt med en høj investeringsaktivitet i 1� kvartal, men nedlukningen i marts førte til usikkerhed blandt investorerne, hvilket fik dem til at afvente ( figur 1)� Dette medførte en begrænset aktivitet i årets 2� og 3� kvartal� Da efteråret kom, var der færre restriktionerne og store sumFigure mer kapital akkumuleret� Dette medførte, at volumen i årets 35 4� kvartal nåede 34,2 mia� kr�, hvilket er den højeste volumen nogensinde målt i et enkelt kvartal og svarer til 47% af den samlede volumen i 2020�

Danmarkshistoriens største ejendomstransaktion, som blev gennemført da Heimstaden købte HD Ejendomme af Niam for 12,1 mia� kr� i december 2020, bidrog ligeledes positivt til den stærke afslutning� Bolig og logistik vinder Med en volumen på 41,5 mia� kr� blev boligsegmentet igen det ejendomssegment med den største transaktionsvolumen i 2020, men med en vækst på hele 118% til 9,0 mia� kr� leverede logistiksegmentet den største vækst i forhold til 2019� Uagtet en aftagende interesse for strøgejendomme, som historisk har drevet retailmarkedet, sikrede tre milliardhandler desuden, at transaktionsvolumen i retailsegmentet steg med 76% til 7,2 mia� kr�

1: Transaction volume 2020 34.3

30 44%

BN DKK

25 20 15

Investorerne søger sikre aktiver Markedet i 2020 viste igen, at når der er usikkerheder på markedet, søger investorerne mod de sikreste aktiver på de sikreste placeringer� Uagtet en rekordhøj aktivitet førte et begrænset udbud af attraktive logistikejendomme førte til en umættet efterspørgsel blandt investorerne, og et begrænset udbud af attraktive kontor- og boligejendomme i København medførte, at investorerne i højere grad investerede i Storkøbenhavn�

Danish 15.0

13.7

36% 10.2 Confidence in the market 56% 10 60% ensures increase in volume 52% Despite the fact that both 5 64% 40% covid-19 and political interven48% tions led to uncertainty in the 0 Q1 Q2 Q3 Q4 real estate market, the volume in 2020 reached DKK 73.2bn. This represents a growth of 19% compared The largest real estate transaction in Danish to 2019, where the total volume reached history was completed in December 2020, DKK 61.6bn, which provides evidence of great when Heimstaden bought a residential confidence in the Danish real estate market. and commercial portfolio from Niam for DKK 12.1bn, which also had a positive impact A turbulent year on the strong year-end. This is not to say that covid-19 did not have an impact on the real estate market. 2020 began Residential and logistics wins strongly with a high investment activity in the With a volume of DKK 41.5bn the residenfirst quarter, but the lockdown in March led tial segment was again the real estate segto uncertainty among the investors, causing ment with the largest transaction volume in them to be hesitant ( figure 1). This resulted 2020. However, with a growth on 118%, to in an extremely limited activity in the second DKK 9.0bn in 2020, the logistics segment and third quarters of the year. In the beginning delivered the strongest year-on-year growth. of the autumn there were fewer restrictions Three transactions in excess of a billion kroner and large amounts of capital accumulated. As ensured that transaction volume in the retail a result, volume in the fourth quarter reached segment increased by 76% to DKK 7.2bn. This DKK 34.2bn, which is the highest level ever is despite a declining interest in high street recorded in a single quarter in Denmark and properties, which historically have driven the corresponds to 47% of total volume in 2020. retail market.

2 // RED – Danish Investment Atlas 2021

Et begrænset udbud af de sikreste og mest efterspurgte aktiver, prime kontorejendomme i København, medførte, at transaktionsvolumen i kontorsegmentet faldt med 40% til 11,0 mia� kr� Hotelsegmentet var dog hårdest ramt, og rejserestriktioner førte til, at belægningsprocenten i København hele året lå betydeligt lavere end normalt� Som konsekvens var investorerne tilbageholdende, og volumen faldt med 96% til 160 mio� kr�

Foreign The uncertainty made the investors demand the safest assets, prime office propSource: erties in central CopenhaC&W | RED gen, but due to limited supply of these properties the transaction volume in the office segment fell by 40% to DKK 11.0bn. However, the hotelsegment was the segment that experienced the largest decrease in volume, where travel restrictions led to low occupancy rates in Copenhagen throughout the year. Consequently, investors were reluctant to buy and therefore the volume fell by 96% to DKK 160m.

Investors demand safe assets Transactions in 2020 once again show that when there is uncertainty in the market, the investors look to the safest asset classes for their investments. However, 2020 showed us how a limited supply of certain properties affected the market. Despite a record high activity a limited supply of attractive logistics properties led to an unsaturated demand among investors, and a shortage of attractive office and residential properties in Copenhagen led investors to invest larger sums in Greater Copenhagen.

BN DKK

Foreign 60%

4.7

30%

Rest of Denmark

15.0

43%

Total

41.5 GREATER

56%

29%

Da ni

Danish 40% 249% 9.7

RESIDENTIAL VOLUME IN TOTAL

41.5

61 %

Greater Copenhagen 12.1 Aarhus

25%

COPENHAGEN

ig n

12.1

Copenhagen

Investment highlights 2020

Largest deal Heimstaden’s aquisition Danish 39% of Niam’s residential Foreign 61% portfolio

BN DKK

Largest investor Heimstaden

COPENHAGEN

9.7

BN DKK

11.3

Outlook 2021 Prime rent Prime yield

BN DKK

12.4

Transaction volume

Danish 21%

BN DKK

Foreign 79%

23%

OFFICE

BN DKK

Foreign 48%

0.3

70%

11.0

-72%

BN DKK

FUNEN

Rest of Denmark 1.7

Foreign 65%

11.0 GREATER

-40%

COPENHAGEN

0.5

Largest deal Ärzteversorgung WestDanish 63% falen-Lippe’s aquisition Foreign 37% of Danske Bank’s HQ Largest investor Ärzteversorgung Westfalen-Lippe

2.5 -1% Danish 35%

BN DKK

2.1

Outlook 2021 Prime rent Prime yield

BN DKK

2.1

Transaction volume

Danish 63%

BN DKK

Foreign 37%

OFFICE

Total

Danish 52% -75% 0.5

OFFICE VOLUME IN TOTAL

37 %

Greater Copenhagen 7.8 Aarhus

-39%

ig n

7.8

COPENHAGEN

Foreign 68%

15%

BN DKK

Copenhagen

Investment highlights 2020

OTHER ZEALAND

Volume Change Danish 32%

6.3

Da ni

Area

AARHUS

4.7 LOGISTICS

Danish 77%

BN DKK

Foreign 23%

OTHER ZEALAND

Danish Foreign

Rest of Denmark 0.2

249%

BN DKK BN DKK

43% 15%

Danish Foreign

0.3 3%

Volume Change Danish 42% Foreign 58%

Danish 21% 99% 0.5

BN DKK

Aarhus

BN DKK

Foreign

1.2 0.5

7.2

-87%

3.7 Danish 100% 90% Foreign 0%

Largest deal Aviva’s aquisition of Danish 48% Galleri Foreign 52% K

BN DKK

FUNEN

7.2

Danish

RETAIL VOLUME IN TOTAL

Foreign 79%

0.1

42%

Rest of Denmark 0.2 Total

132%

COPENHAGEN

52 %

Greater Copenhagen 3.0

1.8

Investment highlights 2020

ig n

3.0

Foreign

Prime yield

BN DKK

Transaction volume

Foreign 0%

14%

Danish

1.8

Prime rent

Danish 100%

OTHER ZEALAND

BN DKK

Copenhagen

BN DKK

Outlook 2021

AARHUS

RETAIL 1.2

118%

GREATER COPENHAGEN OTHER JUTLAND Danish 17% Danish 43% Foreign 83% Foreign 57%

BN DKK

Area

Largest investor Blackstone

Foreign 16%

9.0

Largest deal Blackstone’s Danish 27% aquisition of ﬁve Foreign 73% logistic properties

BN DKK

4.0 Danish 84% 38%

BN DKK

3.9 6.4

9.0

Total

1.0

FUNEN

1% 1%

317%

Da ni

BN DKK BN DKK

3.9

LOGISTICS VOLUME IN TOTAL

70 %

Aarhus

N/A

Investment highlights 2020

Fo ig n

Greater Copenhagen 0.1 0.5

0.1

COPENHAGEN AALBORG Danish 88% Danish 100% Foreign 12% Foreign 0%

Dan

Foreign 0%

Copenhagen

ish

Volume Change Danish 100%

BN DKK

Largest investor Aviva

76%

GREATER OTHER JUTLAND COPENHAGEN

BN DKK

1.6

Outlook 2021 Prime rent Prime yield

BN DKK

1.6

Transaction volume

RETAIL

1.0

LOGISTICS

11%

Area

RESIDENTIAL

Volume Change 3

Area

ANNUAL REVIEW

RESIDENTIAL

Danish 90% 74%

BN DKK

Foreign 10% 26%

11% 7%

HOTEL 8%

Danish 28% Foreign 72%

Greater Copenhagen 2.9 BN DKK

Aarhus

Danish

32%

BN DKK

0.7

Danish

Foreign

0.1 BN DKK

-100%

Danish 26%

Foreign 74%

-100%

FUNEN

0.2 Danish 43% -79% Foreign 57%

0.2

BN DKK

Foreign

Rest of Denmark 0.3 Total

Foreign 58%

OTHER JUTLAND

-96%

TRIANGLE REGION

HOTEL VOLUME IN TOTAL

0.2

Largest deal A private investors Danish 100% aquisition of Kysthusene Foreign 0%

BN DKK

Largest investor A private investor

BN DKK

0.05

Outlook 2021 Prime rent Prime yield

BN DKK

0.05

Transaction volume

Danish 23% Foreign 77% AARHUS Danish 62% Foreign 38%

Executive summary // 3

HOTEL

Copenhagen

Investment highlights 2020

OTHER ZEALAND

Volume Change Danish 42% 1

BN DKK

0.6

Da nis

Area

ÅRET DER GIK THE YEAR IN REVIEW 2020 var et år, der på mange måder var præget af stor usikkerhed. Det er derfor relevant at opsummere nogle af de mest omtalte emner, der relaterer sig til ejendomsmarkedet, og som var definerende for 2020. Der er sagt og skrevet mangt og meget om disse emner, så vi opsummerer her i rapporten ganske kortfattet.

2020 was a year which in many ways was characterized by great uncertainty. It is therefore appropriate to sum up some of the most heavily discussed topics concerning the property market, which were defining for 2020. Much has been said and written about these topics, so we will only present a brief summary here.

COVID-19

LAGERBESKATNING

Covid-19 har været den enestående mest influerende faktor på ejendomsmarkedet� Nedlukninger verden over skabte stor usikkerhed på alle markeder og skabte en afventende stemning på ejendomsmarkedet – på transaktions- såvel som på lejemarkedet� Investorerne tog en tænkepause, og lejerne kom ikke til fremvisninger� Butiksmarkedet, der i forvejen var en anelse vingeskudt, led under tvangslukninger, og hotelmarkedet, der lever af turisme, blev allerhårdest ramt� Ejendomspriserne viste sig dog at være robuste, og den lave rente og ekspansive finanspolitik holdt hånden under markedet�

Lagerbeskatning var et emne, der fyldte meget, men som endnu ikke har materialiseret sig i en ny lovgivning� Forslaget til en ændret beskatning af fast ejendom for visse investorer blev lanceret som en del af en finansieringspakke for en ny pensionsreform� Det er hensigten, at investorer med besiddelser af udlejningsejendomme for mere end 100 mio� kr� fra og med 2023 skal beskattes løbende af ejendommenes værdistigninger, altså en lagerbeskatning�

COVID-19 Covid-19 has been the factor with the by far greatest impact on the property market. Lockdowns around the world led to great uncertainty in all markets and led to hesitancy in the property market, on both the investment and occupier market. Investors paused for breath, and the tenants did not show up for showings. The retail market, which was already somewhat challenged, suffered from forced closures, and the hotel market, which relies on tourism, was hit hardest of all. However, property prices proved to be robust and low interest rates and expansive financial policy kept the market afloat.

Markedets aktører sætter spørgsmålstegn ved vurderingsmetoden for ejendommene, den store likviditet der tages ud af selskaberne til skattebetalingerne og administrative udfordringer� De internationale investorer følger interesseret med i debatten og forsøger at finde ud af, hvordan beskatningen vil påvirke deres investeringer og investeringsstrategi i Danmark�

MARK-TO-MARKET TAXATION Mark-to-market taxation was a widely discussed topic, but which has not yet materialized in new legislation. The proposal for a change in the taxation of real estate for certain investors was launched as a part of a financing package for a new pension reform. The intention is for investors holding rental properties with a value of more than DKK 100m from 2023 to be taxed continuously on increases in the value of the properties, i.e. to be subject to mark-to-market taxation. The players in the market are questioning both the method for property valuation, the high level of companies’ liquidity going towards tax payments, and administrative challenges. International investors are following the debate with interest and trying to ascertain how the taxation will affect their investments and investment strategy in Denmark.

4 // RED – Danish Investment Atlas 2021

ANNUAL REVIEW The amendment to the Housing Regulation Act affected rental properties in the old housing stock. Legislative action aimed at minimising foreign capital in the residential market had been in the offing for many years. The period leading up to the legislative action itself brought great frustration for market players, and transactions with rent-controlled (OMK) properties was minimized. The amendment to section 5(2) of the Act concerning the rules for modernisation and re-letting of apartments became a reality on 1st of July. The amendment has worked as intended: only 2% of all investments in rent-controlled properties in 2020 were made by foreign investors. An in-depth article about this market can be found in the residential section of this report. 

The property valuation system for determination of the public property valuations has been in the pipeline for eight years. In 2020 the process was extended to 2021, and the Danish Government wishes to remove parts of the valuation system completely, specifically the valuation of commercial properties, so that the value of commercial properties is based on the value of owneroccupied housing. Politicians, the general public, and players in the property market are losing patience with the system, but the towel has not yet been thrown in. It remains to be seen whether 2021 will be the year when it happens. And if it does happen, what is the alternative?

RETAIL

RED MENER RED OPINION RED mener, at 2020 var året, hvor vi for alvor så, hvordan usikkerhed er markedernes værste fjende� De skelsættende måneder i februar og marts viste, hvor hurtigt en krise kan ramme og hvordan uvisheden kan være værre end en dårlig nyhed�

RED’s opinion is that 2020 was the year when it became crystal clear that uncertainty is the market’s worst enemy. The momentous months of February and March showed how quickly a crisis can strike and how uncertainty can be worse than bad news.

Det var desværre også året, hvor Danmarks ry, som et land med stor politisk stabilitet, fik ridser i lakken – i hvert fald på ejendomsmarkedet� De udenlandske investorer har fået øjnene op for, at de skal være opmærksomme på politiske vinde� De er ikke skræmt væk, men for fortsat at tiltrække udenlandsk kapital er det vigtigt, at der de kommende år er ro og transparens omkring lovgivningen på ejendomsmarkedet�

Unfortunately, it was also the year when Denmark’s reputation as a country with great political stability was blemished, at least in the property market. Foreign investors have become aware that they need to watch out for shifts in the policies. They have not been frightened off, but if foreign capital is to continue to be attracted it is important that there in the coming years is limited changes and transparency with regard to legislation on the property market. Executive summary // 5

HOTEL

THE HOUSING REGULATION ACT

THE PUBLIC VALUATION SYSTEM

RESIDENTIAL

Ejendomsvurderingssystemet til fastsættelse af de offentlige ejendomsvurderinger har været otte år undervejs� I 2020 blev rejsen forlænget til 2021 og dele af vurderingssystemet, nærmere bestemt vurderingen af erhvervsejendomme, ønsker regeringen helt at afskaffe, således at erhvervsejendommenes værdi fastsættes med udgangspunkt i værdien for ejerboliger� Både politikere, borgere og aktører på ejendomsmarkedet er ved at miste tålmodigheden med systemet, men håndklædet er endnu ikke kastet helt i ringen� Om 2021 bliver året, hvor det sker, har vi til gode at se� Og sker det, hvad er så alternativet?

OFFICE

EJENDOMSVURDERINGSSYSTEMET

Ændringen af boligreguleringsloven påvirkede boligudlejningsejendommene i den gamle boligmasse� Et lovindgreb med det formål at minimere udenlandsk kapital på boligmarkedet var længe under opsejling� Perioden frem til selve lovindgrebet skabte stor frustration blandt markedets aktører, og transaktionerne med de såkaldte OMK-ejendomme udeblev� Ændringen i lovens §5 stk� 2 om reglerne for modernisering og genudlejning af lejligheder blev til virkelighed d� 1� juli� Lovændringen har vist sig at virke efter hensigten; kun 2% af alle investeringer i OMK-ejendomme i 2020 blev foretaget af udenlandske investorer� En dybdegående artikel om dette marked findes under boligafsnittet i denne rapport� 

LOGISTICS

BOLIGREGULERINGSLOVEN

FORVENTNINGER TIL 2021 EXPECTATIONS FOR 2021

More new construction, high demand, and pressure on yields

I 2021 vil der vil fortsat blive opført mange nye boliger i København� I takt med at de etablerede udviklingsområder som Nordhavnen, Amager Strand og Ørestad bliver færdiggjorte, vil udviklingen rykke til nye områder, herunder Jernbanebyen, Kløvermarken og Grønttorvet samt omdannelse af lager- og industriområder i Nordvest� I Storkøbenhavn forventes det særligt at være udviklingsmulighederne langs Letbanen, Kystbanen og S-togslinjerne, der vil være i fokus� Flere byggerier langs hovedstadens letbane står allerede færdig i 2021, og i takt med at flere projekter færdiggøres, forventes der at komme et midlertidig pres på huslejen�

In 2021 many new homes will continue to be built in Copenhagen. As the established development areas such Nordhavnen, Amager Strand and Ørestad are completed, development will move on to new areas, including Jernbanebyen, Kløvermarken and Grønttorvet, as well as conversion of warehouse and industrial areas in the north-west part of Copenhagen. In Greater Copenhagen there are expected to be development opportunities in particular along the routes of Copenhagen Light Rail, the Coastal Line, and the S-train lines. Several construction projects along the route of Copenhagen Light Rail will be finished in 2021, and as more projects are completed, we expect a temporary pressure on rent levels.

Der forventes fortsat at være stor efterspørgsel efter lejeboliger i København og Storkøbenhavn i 2021, særligt efter mindre boliger� Som resultat heraf forventer vi fortsat at se flere projekter med mindre boliger� Søgningen mod lejeboliger fremfor ejerboliger forstærkes fortsat af de restriktive udlånsregler, som finanstilsynet indførte i 2016�

Med det nuværende rente- og efterspørgselsniveau forventes det, at afkastkravene vil være svagt faldende i 2021� Dette forventes særligt at gælde for ejendomme, som allerede er i drift samt for ejendomme beliggende centralt i København� Afkastkravene på sekundære beliggenheder forventes uændrede i 2021� Grundet usikkerheder på markedet samt en fortsat høj efterspørgsel forventer vi, at boligejendomme igen i 2021 vil blive den mest handlede aktivklasse�

With the current level of interest rates and demand, it is expected that yield requirements will be slightly decreasing in 2021. This is expected to apply in particular to properties already in use and to properties located outside central Copenhagen. Yield requirements for secondary locations are expected to be unchanged in 2021.

High occupier demand, increasing vacancy, and unchanged yields

Vi oplever fortsat en fornuftig efterspørgsel efter kontorlejemål i det centrale København� Tomgangen forventes dog at stige i 2021, og der bliver derfor øget konkurrence om lejerne i det kommende år� Uagtet at vi over de kommende 5-10 år forventer en større vækst i kontorlejen i København, er det vores forventning, at lejen i det centrale København i 2021 vil forblive uændret grundet den stigende tomgang�

Afkastniveauet for kontorer har over en årrække været nedadgående� Vi forventer dog, at afkastniveauet vil være uændret i 2021 eller kun marginalt lavere, primært grundet to forhold; den stigende tomgang i CBD og den forventede vedtagelse af lagerbeskatning� Den politiske udmelding omkring lagerbeskatning af investeringsejendomme kom primo oktober 2020, men den har ikke haft nogen effekt på de afkast der blev handlet til i 4� kvartal af 2020�

The yield levels for offices has been declining for some years. However, we expect that the yield levels will be unchanged in 2021 or only marginally lower, primarily due to two factors: a rising vacancy rate in CBD and the expected adoption of mark-to-market taxation. The political announcement on mark-to-market taxation of investment properties was made in October 2020, but has not yet had any impact on the yield levels.

6 // RED – Danish Investment Atlas 2021

KONTOR // OFFICE

Høj lejerefterspørgsel, stigende tomgang og uændrede afkast

BOLIG // RESIDENTIAL

Mere nybyggeri, høj efterspørgsel og pres på afkast

Stabilizing rent levels, higher activity, and larger yield spreads

Vi forventer, at covid-19 og dennes eftervirkninger fortsat vil skabe udfordringer indenfor retailsegmentet i primo 2021� Overordnet set forventer vi at se et fald i lejeniveauet i starten af 2021, som dog forventes stabiliseret i takt med genåbningen af Danmark, når forbrugerne kan vende tilbage til deres normale hverdag og shoppingadfærd�

We expect covid-19 and its after-effects to continue to pose challenges in the retail segment in early 2021. Overall we expect to see a decrease in the rent levels at the beginning of 2021, however, these levels are expected to stabilise as Denmark reopens, when consumers will be able to return to their normal everyday lives and shopping patterns.

Transaktionsvolumen i 2021 forventes uændret fra 2020� Vi forventer, at investorerne i primo 2020 vil være tøvende med investeringer i retailsegmentet, og vi derfor vil se begrænset aktivitet i 1� halvår� Forudsat at covid-19 situationen har lagt sig, forventer vi ultimo 2021 at se en ketchupeffekt med større aktivitet og efterspørgsel efter retailejendomme�

Afkastkravet på de bedst-beliggende retailejendomme forventes uændret, mens der forventes at være et mindre opadgående pres på afkastet på retailaktiver med svagere placering eller med større krav til asset management færdigheder�

The yield requirement for the best located retail properties is expected to be unchanged, while there is expected to be a slight upward pressure on the yields on retail assets, with a weaker location or with greater requirements for asset management skills.

Return of tourism in 2022, high construction activity, and temporary oversupply

Danmark, og særligt København, har historisk set været en populær turistdestination� I København var der indtil 2020 en vækst i det årlige antal besøgende� Covid-19 stoppede dog væksten, og i 2020 blev turismen mere end halveret� Det er fortsat uvist hvornår hotelsegmentet vender tilbage til normaliserede forhold� Vi forventer dog, at den europæiske rejseaktivitet genoptages i løbet af 2� halvår af 2022, i takt med at udrulningen af covid-19 vaccineringerne fuldendes, og at turismen er tilbage på et mere eller mindre normaliseret niveau i 2023�

Denmark, and Copenhagen in particular, has historically been regarded as a popular tourist destination. Until 2020 there was increases in the annual number of visitors in Copenhagen. However, covid-19 stopped this growth, and tourism fell by more than half in 2020. It remains uncertain when the hotel segment will return to normal. However, we expect that European travel activity will resume in the second half of 2021 as the rollout of vaccinations is completed and that the tourism will be back at more or less normal levels at the beginning of 2022.

Frem til 2028 er det planlagt, at der vil blive tilført næsten 9�000 værelser til hotelmarkedet i København, hvilket kan lede til et mindre overudbud i markedet såfremt turismen som forventet først normaliseres i 2022� Dette overudbud forventes at kunne resultere i konverteringer, til eksempelvis studieboliger, i de kommende år�

By 2028 almost 9,000 rooms are expected to be added to the hotel market in Copenhagen, which might lead to an excess supply in the market if tourism, as expected, is not normalized until 2022. This excess supply may result in conversions, for example to student accommodation, over the next few years. Executive summary // 7

HOTEL // HOTEL

Turismen retur i 2023, høj byggeaktivitet og midlertidigt overudbud

RETAIL // RETAIL

Lejen stabiliseres, større aktivitet og større forskelle i afkast

ANNUAL REVIEW RESIDENTIAL

The transaction volume in 2021 is expected to be in line with that of 2020. The supply of well located, modern logistics properties is currently limited, but due to a high construction activity, there will be more up-to-date assets available in the future. Many factors indicate that there is still scope for the yields to decrease for prime logistics properties. This is especially the case as logistics properties in many comparable markets are being traded at lower yields than in Denmark. We therefore expect the yields to decrease in 2021 and that we will see individual transactions at yields close to 4.00%.

LOGISTICS

Transaktionsvolumen i 2021 forventes uændret fra 2020� Udbuddet af velbeliggende moderne logistikejendomme er i øjeblikket begrænset, men grundet en høj byggeaktivitet vil der fremadrettet være flere tidssvarende logistikaktiver� Mange forhold indikerer, at der stadig er plads til faldende afkastkrav for prime logistikejendomme� Særligt da der på mange sammenlignelige markeder aktuelt bliver handlet logistikejendomme til lavere afkast end i Danmark� Vi forventer derfor, at afkastkravet falder i 2021, og at vi vil se enkelte handler til afkastkrav tæt på 4,00%�

RETAIL

We expect the positive trends, with strong investor interest in prime logistics properties, to continue in 2021. We expect a strong occupier demand and rent increases for both well-located logistics properties that can fulfil the requirements for fast delivery, as well as for modern and flexible properties that can be adapted more easily to meet the needs of businesses.

LOGISTICS // LOGISTICS

Vi forventer, at de positive trends, med stor investorinteresse for prime logistikejendomme, fortsætter i 2021� Vi forventer en stor lejeefterspørgsel og lejestigninger for velbeliggende logistikejendomme, der kan imødekomme kravet om hurtig levering, samt efter moderne og fleksible logistikejendomme, der nemmere kan tilpasses virksomhedernes behov�

OFFICE

More up-to-date assets, high demand, and pressure on yields

HOTEL

Flere tidssvarende aktiver, høj efterspørgsel og pres på afkast

RED assisted ATP with the letting of the last available office areas in Axel Towers.

ANNUAL REVIEW

INDHOLD CONTENT

ÅRSOVERBLIK // ANNUAL REVIEW Investeringsmarkedet 2020 // Investment Market 2020 �� 12

RESIDENTIAL

Volumen & investorer 2020 // Volume & Investors 2020 ��14 Highlight: Segmenternes udvikling // Highlight: Development in Segments ��16 Highlight: Byudvikling // Highlight: Housing Development ��18 Forventninger til 2021 // Expectations for 2021 �� 20

BOLIG // RESIDENTIAL Investeringsmarkedet 2020 // Investment Market 2020 �� 24 Volumen & investorer 2020 // Volume & Investors 2020 �� 26 Top 5 transaktioner 2020 // Top 5 Transactions 2020 �� 28 Highlight: OMK-Ejendomme // Highlight: Rent-Controlled Properties � 30 Highlight: Seniorboliger // Highlight: Senior Housing �� 32

OFFICE

Forventninger til 2021 // Expectations for 2021 �� 36 Transaktioner & nøgletal // Transactions & Key Figures �� 38

KONTOR // OFFICE Investeringsmarkedet 2020 // Investment Market 2020 �� 42 Volumen & investorer 2020 // Volume & Investors 2020 �� 44 Top 5 transaktioner 2020 // Top 5 Transactions 2020 �� 46 Highlight: Lejemarkedet // Highlight: Occupier Market �� 48 Highlight: Afkastspænd // Highlight: Yield Spread �� 50 Forventninger til 2021 // Expectations for 2021 �� 52

LOGISTICS

Transaktioner & nøgletal // Transactions & Key Figures �� 54

LOGISTIK // LOGISTICS Investeringsmarkedet 2020 // Investment Market 2020 . . . . . . . . . . . . . . 58 Volumen & Investorer 2020 // Volume & Investors 2020 . . . . . . . . . . . . . 60 Top 5 transaktioner 2020 // Top 5 Transactions 2020 . . . . . . . . . . . . . . . . 62 Highlight: Efterspørgsel // Highlight: Demand . . . . . . . . . . . . . . . . . . . . . . 64 Forventninger til 2021 // Expectations for 2021 . . . . . . . . . . . . . . . . . . . . . . 66 Transaktioner & pipeline // Transactions & Pipeline . . . . . . . . . . . . . . . . . . . 68

RETAIL // RETAIL Investeringsmarkedet 2020 // Investment Market 2020 . . . . . . . . . . . . . . 72

RETAIL

Volumen & investorer 2020 // Volume & Investors 2020 . . . . . . . . . . . . . . 74 Top 5 transaktioner 2020 // Top 5 Transactions 2020 . . . . . . . . . . . . . . . . 76 Highlight: Lejemarkedet // Highlight: Occupier Market . . . . . . . . . . . . . . . 78 Highlight: Strøgtælling // Highlight: High Street Footfall . . . . . . . . . . . . . 80 Highlight: Realafkastet // Highlight: Real Return . . . . . . . . . . . . . . . . . . . . . 82 Forventninger til 2021 // Expectations for 2021 . . . . . . . . . . . . . . . . . . . . . 84 Transaktioner & nøgletal // Transactions & Key Figures . . . . . . . . . . . . . . . 86

HOTEL // HOTEL Hotelsegmentet i 2020 // The Hotel Segment in 2020 . . . . . . . . . . . . . . . 90 Pipeline & transaktioner // Pipeline & transactions . . . . . . . . . . . . . . . . . . . 92

HOTEL

// 9

RED assists KG3 A/S with the letting of two exclusive offices at Købmagergade 3 in the city centre of Copenhagen.

ANNUAL REVIEW RESIDENTIAL

ÅRSOVERBLIK ANNUAL REVIEW Investeringsmarkedet 2020 // Investment Market 2020

Volumen & investorer 2020 // Volume & Investors 2020

OFFICE

Highlight: Segmenternes udvikling // Highlight: Development in Segments

Highlight: Byudvikling // Highlight: Housing Development

RETAIL

LOGISTICS

Forventninger til 2021 // Expectations for 2021

HOTEL

12 14 16 18 20

Annual Review // 11

ÅRSOVERBLIK – INVESTERINGSMARKEDET 2020 ANNUAL REVIEW – INVESTMENT MARKET 2020 Udenlandske investeringer førte til stigende aktivitet Den samlede transaktionsvolumen nåede 73,2 mia� kr� i 2020 og steg dermed med 19% i forhold til 2019, hvor der blev handlet investeringsejendomme for 61,6 mia� kr� ( figur 3)� De udenlandske investorer øgede deres investeringer til 40,2 mia� kr�, hvilket svarer til en andel på 55% af den samlede volumen og er en vækst på 57% i forhold til deres investeringer i 2019� Modsat reducerede de danske investorer deres investeringer til 33,1 mia� kr�, hvilket svarer til et fald på 8% i forhold til 2019� Den samlede vækst i 2020 var således alene drevet af en vækst i de udenlandske investorers aktivitet�

hverken manglende interesse eller kapital, men kombinationen af et manglende udbud af attraktive bolig- og kontorejendomme i København, en manglende investorinteresse for strøgejendomme samt en stigende handel med logistikejendomme beliggende udenfor København� Dette medførte, at en del af investorerne afventede, mens andre søgte alternativer� Særligt boligejendomme i Storkøbenhavn tiltrak investorernes kapital i 2020� Som konsekvens steg transaktionsvolumen i Storkøbenhavn derfor med hele 113% til 16,4 mia� kr� svarende til en andel på 22% mod 13% i 2019�

41,5 mia� kr� i 2020 ( figur 2)� Boligsegmentet udgjorde således hele 57% af den samlede volumen i 2020� Hertil skal det dog bemærkes, at danmarkshistoriens største transaktion udgjorde 27% af den samlede volumen indenfor boligsegmentet� Modsat førte usikkerhederne samt et manglende udbud af prime kontorejendomme beliggende i København til, at handlen med kontorejendomme faldt med hele 40% til 11,0 mia� kr�

Uagtet at usikkerhederne omkring fremtiden for den fysiske butik blev skærpet som følge af nedlukninger i 2020, steg handlen Bolig- og logistiksegmentet vinder med retailejendomme med 76% til 7,2 mia� kr�, Som følge af usikkerheder på markedet steg hvilket dog primært var drevet af tre handinvesteringerne i den mest sikre aktivklasse, ler, som tilsammen udgjorde 58% af volumen� Storkøbenhavn haler ind på København boligudlejningsejendomme, med hele 56% til Den markante vækst var dog ikke I 2020 faldt transaktionsvolutilstrækkelig til at fastholde pladsen men i København med 14% til 28,3 som det tredje største segment� En Figure 2: Segment breakdown 2020 mia� kr�, dermed faldt Københavns stigende tro på e-handel, og det at andel af den samlede volumen fra investorerne fortsat kan opnå relaVolume Share of Change 46% i 2019 til 33% i 2020 ( figur tivt høje afkast på danske logisti(BN DKK) total volume from 2019 4)� Investorerne opfatter dog fortkejendomme, medførte nemlig, at Residential 41.5 57% 56% sat det Københavnske ejendomstransaktionsvolumen i logistiksegmarked som attraktivt, og nedganmentet steg med hele 118% til 9,0 Oﬃce 11.0 15% -40% gen i investeringsaktiviteten skyldes mia� kr� Logistics 9.0 12% 118% Retail

7.2

10%

76%

Land Foreign investments led Hotel to increase in activity Total investment volume reached Other DKK 73.2bn in 2020, equivalent Total to an increase on 19% compared to 2019, where transactions with investment properties reached DKK 61.6bn ( figure 3). Investments made by foreign investors rose to DKK 40.2bn. This is equivalent to a share of 55% of the total volume and an increase of 57% compared to their investments in 2019. In contrast, investments by Danish investors decreased to DKK 33.1bn, which corresponds to a decrease of 8% from 2019. The overall growth in 2020 was therefore driven solely by a growth in the foreign investors’ activity.

4.2

0.2

-96%

Greater Copenhagen is catching up on Copenhagen In 2020 the transaction volume in Copenhagen fell by 14% to DKK 28.3bn, thereby Copenhagen’s share of the total volume decreased from 46% in 2019 to 33% in 2020 ( figure 4). However, investors continue to view the Copenhagen real estate market as attractive and the downturn in investment

12 // RED – Danish Investment Atlas 2021

41.5bn in 2020 ( figure 2). The residential segment accounted for no less than 57% of the total volume 0.1 0% -92% in 2020. However, it should be noted 73.2 100% 19% that the largest transaction in the Danish history accounted for 27% of total volume in the residential segactivity is not due to a lack of interest or ment. In contrast, uncertainty and a shortage capital, but to the combination of a shortof prime office properties located in Copenage of attractive residential and office prophagen led to a decrease in transactions with erties in Copenhagen, lack of investor interoffice properties of as much as 40% to DKK est in high street properties and an increasing 11.0bn. level of transactions with logistics properties located outside Copenhagen. This meant Despite the fact that lockdowns in 2020 that some investors adopted a wait-and-see resulted in heightened uncertainty regarding strategy, while others looked for alternatives. the future of the physical store, retail propIn particular, residential properties in Greater erty transactions increased with 76% to DKK Copenhagen attracted the investors’ capital 7.2bn, which, however, primarily was driven by in 2020. As a result, the transaction volume in three transactions that made up 58% of the Greater Copenhagen increased by as much as volume. However, this significant increase was 113% to DKK 16.4bn, equivalent to a share of not to maintain the segment’s position as the 22%, compared to 13% in 2019. third largest. Increasing confidence in e-commerce, and the fact that investors continue Residential and logistics segments win to be able to achieve relatively high yields on Uncertainty in the market led to an increase Danish logistics properties, led to an increase in investments in the safest asset class, resiin the transaction volume in the logistics segdential properties, of as much as 56%, to DKK ment of 118% to DKK 9.0bn.

ANNUAL REVIEW

Figure 3: Total Danish transaction volume 2012-2020 100 91.8

73.2 68.9

47% 61.6

BN DKK

55.3

45%

58% 58% 58%

40 33.3 22.3

62%

35.4

53%

69%

42%

81% 0

64%

38%

31%

2013

2014

19% 2012

36%

2015

2016

Source: C&W | RED

2017

Danish

2018

55% 42%

2019

2020

OFFICE

RESIDENTIAL

77.3

Foreign

LOGISTICS

Figure 4: Total Danish transaction market – Historic geographic breakdown 2018-2020 35

40%

51%

33% 10

76%

60%

82% 64% 60%

59% 67%

5 41% 0 2018

RETAIL

2019

2020

COPENHAGEN Source: C&W | RED

2018

67%

49% 76%

28%

33% 2019

72%

2020

GREATER COPENHAGEN Danish

2018

69% 24%

24%

31%

2019

2020

AARHUS

2018

18% 2019

2020

REST OF DENMARK

Foreign

HOTEL

BN DKK

36%

Annual Review // 13

ÅRSOVERBLIK – VOLUMEN & INVESTORER 2020 ANNUAL REVIEW – VOLUME & INVESTORS 2020 Én investor dominerede markedet Da Heimstaden i 2020 overtog HD Ejendomme, som forvalter 152 boligudlejningsejendomme og 35 erhvervsejendomme, fra Niam til en pris på 12,1 mia� kr� gennemførte de danmarkshistoriens største ejendomshandel� Denne investering kombineret med en række mindre investeringer bragte Heimstaden op som årets største investor med en samlet investeringsvolumen på 13,3 mia� kr�

Flere store handler Der blev i 2020 gennemført 2�065 handler med erhvervsejendomme i Danmark, hvilket er et fald på knap 4% i forhold til 2019 ( figur 5)� Bemærkelsesværdigt for 2020 er det, at der har været en tilbagegang i både de mindre (0-50 mio� kr�), de mellemstore (50-200 mio� kr�) og de store (200-400 mio� kr�) handler, mens der har været en markant fremgang i de helt store transaktioner på over 400 mio� kr�

Årets anden mest aktive investor var sidste års største investor, Koncenton, som i 2020 investerede 3,0 mia� kr� i boligudlejningsejendomme� I 2020 handlede Figure 5: Breakdown in price de 10 største investorer sammenlagt ejendomme for 32,3 mia� kr�, hvilket er svarende til 44% af den samlede Price range No. of (M DKK) transactions transaktionsvolumen�

0-5

I 2020 blev der blevet gennemført 33 handler til en pris på over 400 mio� kr� med en samlet transaktionsvolumen på 38,7 mia� kr� Til sammenligning var der i 2019 kun 22 handler til en pris på over 400 mio� kr� med en samlet investeringsvolumen på 17,3 mia� kr� Dette vidner om, at der uagtet store udfordringer på markedet fortsat er store mængder kapital allokeret til køb af danske investeringsejendomme� Uden covid-19 er det derfor højst sandsynligt, at aktiviteten i 2020 havde været endnu højere�

range 2019-2020 Volume (M DKK)

2019

2020

2019

2020

1,279

1,316

2,043

2,177

5 - 10

225

238

1,616

1,648

10 - 20

185

158

2,649

2,197

20 - 50

209

142

6,765

4,583

50 - 100

7,180

5,554

100 - 200

11,749

8,303

200 - 300

7,142

6,310

300 - 400

5,150

3,724

400 - 500

3,728

5,807

500 - 1,000

5,052

6,986

> 1,000 Total

One investor dominated the market When Heimstaden in 2020 took over HD Ejendomme, which manages 152 residential rental properties and 35 commercial properties, from Niam at a price of DKK 12.1bn, they completed the largest property transaction in the Danish history. This investment, combined with a number of smaller investments, made Heimstaden the largest investor of the year, with a total investment volume of DKK 13.3bn. The second-most active investor of the year was last year’s largest investor, Koncentron, which in 2020 invested DKK 3.0bn in

14 // RED – Danish Investment Atlas 2021

8,511

25,944

2,140

2,065

61,584

73,233

residential rental properties. In 2020 the 10 largest investors invested DKK 32.3bn in properties, equivalent to 44% of the total transaction volume.

More large transactions In 2020 a total of 2,065 commercial property transactions were made, which is a decrease of just below 4% from 2019 ( figure 5). It is notable that there was a decrease in both small (DKK 0-50m), medium-sized (DKK 50-200m), and large (DKK 200-400m) transactions in 2020, while there was a significant increase in very large transactions in excess of DKK 400m.

In 2020 there were 33 transactions with properties priced at above DKK 400m, with an aggregate transaction volume of DKK 38.bn. By comparison, in 2019 there were 22 transactions with a price above DKK 400m, with an aggregate investment volume of DKK 17.3bn. This testifies that large amounts of capital are still being allocated to the purchase of Danish investment properties, despite great challenges in the market. It is therefore extremely likely that without covid-19 the level of activity would have been even higher in 2020.

ANNUAL REVIEW

Figure 6: Transactions (BN DKK)

Copenhagen

2019

2020

Change

28.3

24.3

-14%

Greater Copenhagen

7.7

16.4

113%

Other Zealand

5.8

9.1

59%

Funen

3.4

2.7

-21%

Aarhus

6.5

6.9

Aalborg

1.0

2.3

117%

Other Jutland

8.9

11.6

30%

61.6

73.2

19%

Total

RESIDENTIAL

Area

Origin Volume (M DKK)

No. of transactions

Heimstaden

13,285

Koncenton

3,008

Savills Investment Management

2,638

Niam

2,354

Ärzteversorgung Westfalen-Lippe

2,100

Blackstone

2,000

NREP

1,953

Reitan

1,800

Aviva

1,600

Capman

1,549

LOGISTICS

Investor

OFFICE

Figure 7: Denmark – Top 10 investors 2020

Source: C&W | RED

Figure 8: Denmark – Top 10 investors 2012-2020 Origin Volume (M DKK)

No. of transactions

Heimstaden

37,555

Niam

20,088

Patrizia

12,989

ATP

12,616

PFA Ejendomme

12,061

Koncenton

11,943

NREP

11,389

Pension Danmark

10,300

Blackstone

9,907

Core Bolig

9,163

HOTEL

RETAIL

Investor

Source: C&W | RED

Annual Review // 15

ÅRSOVERBLIK – HIGHLIGHT: SEGMENTERNES UDVIKLING Kapitalen søger i stigende grad udenfor københavn Det danske ejendomsmarked har historisk set været drevet af bolig-, kontor- og retailsegmentet� De seneste år har investorer dog som følge af attraktive afkast og troen på e-handel i højere grad fundet logistikejendomme som attraktive investeringsobjekter� Segmentet har derfor oplevet en vækst i transaktionsvolumen, og i 2020 oversteg volumen for første gang volumen i retailsegmentet�

i investeringsaktiviteten i København skyldes dog manglende udbud af de aktiver, som investorerne anså som de sikreste under pandemien; attraktive boligudlejnings- og kontorejendomme�

Volumen stiger – Københavns andel falder Det danske ejendomsmarked har flere gange oplevet en markant stigning i transaktionsvolumen; op til finanskrisen og i perioden 2015-2017 ( figur 9)� Væksten skete som følge af let adgang til fremmedkapital og gode økonomiske konjunkturer� I disse perioder søgte investoraktiviteten derfor også udenfor København�

Boligsegmentet har drevet væksten Frem til starten af 2018 var væksten i transaktionsvolumen drevet af boligsegmentet, men særligt den politiske uro omkring boligreguleringslovens § 5, stk� 2� gjorde, at investeringsaktiviteten har været dalende de seneste år ( figur 10)� I 2020 satte boligsegmentet dog ny rekord med en investeringsvolumen 41,5 mia� kr� særligt drevet af danmarkshistoriens største transaktion mellem Niam og Heimstaden i 4� kvartal� Grundet manglende udbud af attraktive boligejendomme i København, søgte kapitalen mod Storkøbenhavn, hvor investeringsvolumen for boligsegmentet steg med hele 249% i 2020�

På trods af covid-19 er transaktionsvolumen i 2020 på det danske ejendomsmarked overraskende vækstet med 19%, mens Københavns andel faldt til 33% – et område som ellers normalt ville være i høj kurs blandt investorerne i et usikkert marked� Nedgangen

Centralt beliggende kontorejendomme i høj kurs Omvendt faldt aktiviteten i segmentet for kontorejendomme væsentligt i 2020 med en nedgang på 40%� Aktiviteten var på sit normale niveau, før covid-19 ramte Danmark,

men efter første nedlukning dalede investeringsvolumen væsentligt� Grundet usikkerhed på markedet, søgte kapitalen i 2020 mod de sikre aktiver; centralt beliggende kontorejendomme i København, mens investorerne vurderede kontorejendomme udenfor København mindre attraktive� Volumennedgangen skyldes derfor især manglende udbud af københavnske kontorejendomme og lav efterspørgsel efter kontorejendomme udenfor storbyen� Dagligvarebutikkerne var modstandsdygtige Selvom pandemien har haft væsentlige konsekvenser for detailhandelen, steg investeringsvolumen i retailejendomme med 76% fra 2019� Væksten i segmentet var primært drevet af en rekordhøj aktivitet i dagligvaresegmentet, med en volumen på over 2,2 mia� kr�, og salg af Galleri K og Aalborg Storcenter, som tilsammen udgjorde ca� 3 mia� kr� Kapitalen søgte derfor også her mod de mere sikre aktiver, da dagligvarebutikkerne ikke var udsat for nedlukning og derfor leverede en høj og stabil omsætning� Omvendt var investeringerne i strøgejendomme minimal, hvor der i 2020 blot blev handlet to københavnske strøgejendomme�

Source: C&W | RED 16 // RED – Danish Investment Atlas 2021

Total transaction volume

Copenhagen's share of the total volume

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

Copenhagen’s share

0% 2003

0 2002

20%

2001

2000

40%

1999

1998

60%

1997

1996

80%

1995

1994

100%

1993

100

1992

BN DKK

Figure 9: Total transaction volume 1992-2020

Volume rising – Copenhagen’s share falling The Danish property market has experienced a significant increase in the transaction volume several times; prior to the financial crisis and in the period 2015-2017 ( figure 9). This growth happened as a result of easy access to external capital and good economic conditions. Consequently, investor activity also looked outside Copenhagen during these periods.

The residential segment has driven the growth Until the start of 2018, growth in the transaction volume was driven by the residential segment, but in particular the political turmoil over section 5(2) of the Housing Regulation Act meant that investment activity has been in decline in recent years ( figure 10). Nevertheless, with an investment volume of DKK 41.5bn the residential segment set a new record in 2020, which in particular was driven by the largest transaction in the Danish history, between Niam and Heimstaden, in the fourth quarter. Due to a shortage of attractive residential properties in Copenhagen, the capital looked towards Greater Copenhagen, where the investment volume for the residential segment increased by as much as 249% in 2020.

Despite covid-19 the transaction volume in the Danish real estate market surprisingly increased by 19% in 2020, while Copenhagen saw its share fall to 33% – an area that would normally be popular among investors

Centrally located office properties in high demand Conversely, the activity in the segment for office properties fell significantly in 2020, with a drop of 40%. Activity was at its normal

ANNUAL REVIEW level before covid-19 hit Denmark, but after the first lockdown there was a considerable decline in the investment activity. Uncertainty in the market caused the capital to look towards the safe assets, centrally located office properties in Copenhagen, while investors assessed office properties outside Copenhagen as less attractive. Consequently, the decline in volume was in particular due to a shortage of supply of Copenhagen office properties and a low demand for office properties outside the city.

Grocery stores were robust Although the pandemic has had a massive consequences on the retail market, the investment volume in retail properties grew by 76% from 2019. Growth in the segment was mainly driven by record levels of activity in the grocery segment, with a volume of more than DKK 2.2bn, as well as the sale of Galleri K and Aalborg Storcenter, which together accounted for approx. DKK 3bn. Thus, the capital also looked towards safer assets here, as grocery stores were not forced to close and therefore provided high and stable turnover. Conversely, investments in high street properties were minimal, with only two Copenhagen high-transactions in 2020.

Figure 10: Transaction volume for prime segments 2013-2020 (illustrated as a 12-month rolling average)

RESIDENTIAL

The Danish property market has historically been dominated by the residential, office and retail segments. However, in recent years investors have increasingly found logistics properties appealing due to attractive yields and confidence in e-commerce. The segment has consequently experienced a growth in the transaction volume, and in 2020 its volume surpassed the volume in the retail segment for the first time.

in an uncertain market. The downturn in the investment activity in Copenhagen was, however, due to a shortage of the assets that the investors regarded as the safest during the pandemic: attractive residential and office properties.

OFFICE

Capital is increasingly looking outside Copenhagen

LOGISTICS

ANNUAL REVIEW – HIGHLIGHT: DEVELOPMENT IN SEGMENTS

RETAIL

30 Residental 20 Retail

Office

10 Logistics 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 2017 2018 2019 2020 Source: C&W | RED

Office

Residental

Retail

Retail (excl. ATP/Danica deal)

Logistics Annual Review // 17

HOTEL

BN DKK

ÅRSOVERBLIK – HIGHLIGHT: BYUDVIKLING ANNUAL REVIEW – HIGHLIGHT: HOUSING DEVELOPMENT Boligudvikling på letbanestrækningen Nye udviklingsområder I takt med at udviklingsmulighederne i de centrale byområder løbende bliver færre, og en fortætningsstrategi ikke kan løse det demografiske pres på boligefterspørgslen, er det nødvendigt at se på de alternative muligheder i oplandet til de større byer� En sådan strategi understøttes blandt andet af investeringer i letbaner� Den kommende letbane i København langs Ring 3 forventes ikke blot at fremme og forbedre den kollektive trafik i hovedstadsområdet, men vil også understøtte byudviklingen på strækningen� Denne byudvikling vurderes i høj grad at blive et billigere alternativ til de centrale byområder, hvor blandt andet husstandene med lav- og mellemindkomst har haft vanskeligt ved at finde en bolig� Med det markante løft af infrastrukturen kan nogle husholdninger desuden reducere deres omkostninger relateret til pendling i bil�

Housing development along the Copenhagen light rail New development areas As development opportunities in central urban areas steadily shrink and a densification strategy is unable to cope with the demographic pressure of demand for housing, it is necessary to look at alternative options in the catchment areas of the major cities. One such strategy is among others supported by investments in the light rail systems. The future Copenhagen Light Rail along Ring 3 is expected not just to promote and improve the public transport in the capital area but also to support urban development along the route. This development is assessed as being a cheaper alternative to the central urban areas, where low- and middle-income households have found it difficult to find a home. Furthermore, this substantial boost in the infrastructure will enable some households to reduce their costs related to commuting by car.

More than 10,000 new homes by 2025 There is no official overview of the combined development opportunities in the areas

18 // RED – Danish Investment Atlas 2021

Over 10.000 nye boliger frem mod 2025 Der foreligger ikke et officielt overblik over de samlede udviklingsmuligheder i områderne langs Ring 3� Af et fælles udspil fra de kommuner letbanen kører igennem fremgår det dog, at der planlægges opført mere end 30�000 boliger frem mod 2035, som forventes at give plads til mere end 70�000 nye borgere� Ifølge Byggefakta er der aktuelt igangsat boligprojekter med ca� 1 mio� etagemeter, svarende til ca� 10�500 nye boliger, som forventes indflytningsklare over de næste fire år� Heraf forventes den største andel klar i løbet af 2023 og 2024� De fem største udviklere i områderne er CASA, AG Development, NREP, Wihlborgs og Gefion, som samlet står for ca� 38% af de projekterede boliger ( figur 11)� Næsten 70% af den forventede volumen udvikles i Brøndby, Glostrup, Herlev og Rødovre� De største udviklingsprojekter omfatter Kirkebjerg-området, Brøndbyøster Boulevard og Stationsparken i Brøndby, Granskoven, Glosemosevej og Banemarksvej i Glostrup, Herlev Bymidte, Hørkæret, Lyskæret i Herlev samt Irma-byen og Rødovre Port i Rødovre�

along the Ring 3. However, from a joint proposal from the municipalities through which the light rail passes it is apparent that more than 30,000 homes are planned to be built by 2035. These homes are expected to house more than 70,000 new residents. According to Byggefakta, housing projects with around 1 million m² of floor space are currently in progress. This is equivalent to around 10,500 new homes, which are expected to be ready for occupation in the next four years. Hereof most are expected to be ready in 2023 and 2024. The five largest developers in these areas are CASA, AG Development, NREP, Wihlborgs and Gefion, who together account for about 38% of the planned homes ( figure 11). Almost 70% of the expected volume is being developed in the cities; Brøndby, Glostrup, Herlev and Rødovre. The largest development projects cover the Kirkebjerg area, Brøndbyøster Boulevard and Stationsparken in Brøndby, Granskoven, Glosemosevej and Banemarksvej in Glostrup, Herlev Bymidte, Hørkæret, Lyskæret in Herlev, and Irma-byen and Rødovre Port in Rødovre.

For at sætte udviklingsaktiviteten i perspektiv, kan det bemærkes, at Danmarks Statistik kun forventer en befolkningsvækst på ca� 8�300 borgere frem mod 2025� Kommunerne har dog forskellige strategiske tilgange til boligudvikling, hvor nogle kommuner øger boligudbuddet for at tiltrække nye borgere, mens andre har en mere reaktiv tilgang til byudviklingen, hvorfor overudbuddet ikke nødvendigvis er et problem� Det betyder dog, at der er planlagt mere boligbyggeri end der er nødvendigt for at imødekomme de nuværende forventninger til befolkningstilvæksten� Udvikling i lejeniveauet Det øgede udbud af lejeboliger i kommunerne langs den kommende letbane vil forventeligt medføre et potentielt pres på markedslejen� De høje lejeboligpriser i den centrale del af København kan dog være med til at understøtte afsætningen af boligerne og dermed fastholde lejeniveauet på kort sigt� På langt sigt vurderes det fremtidige udbud dog at lægge et nedadgående pres på lejeniveauet�

To put the development activity into perspective, it can be mentioned that Statistics Denmark only expects population growth of around 8,300 residents by 2025. However, the municipalities have different strategic approaches to housing development, where some increases the housing supply to attract new residents while others have a more reactive approach to urban development, why the over-supply is not necessarily a problem. However, it does mean that more housing construction is planned than what is necessary to meet the current expectations for population growth.

Trend in rent levels The increased supply of rental housing in the municipalities along the route of the Copenhagen Light Rail will probably lead to a pressure on the market rents. However, the high prices for rental housing in the central part of Copenhagen may help to support the sale of homes and consequently maintain rent levels in the short term. Looking at the long term it is, however, expected that the future supply will put downward pressure on the rent level.

Gladsaxe 5%

Glostrup 15% Brøndby 26%

Ishøj 2%

Rødovre 14%

Figure 11: Top 52021 developers 2021-2024

Herlev 14%

Albertslund 10% NEW HOMES Vallensbæk 8% IN TOTAL

9 LIGHT-RAIL MUNICIPALITIES Glostrup 15%

Brøndby 26%

Ishøj 2%

Herlev 14%

Brøndby 26%

Lyngby-Taarbæk 6%

2021

2021-2024 2022

10,450

Lyngby-Taarbæk 6%

2023

Gladsaxe 5%

2024 Rødovre 14%

620

NEWGladsaxe Ishøj 2% 5% HOMES

540 2.3% Brøndby 26%

10.9% Vallensbæk 8% Ishøj 2%

540Brøndby 26%

Housing growth 2025

1,440 2.5% 620 Population

NEW HOMES NEW 2025 growth HOMES

14.1%

HOMES

0.2%

540

Population NEW 2025 growth HOMES

NEW RØDOVRE

17.6%

Housing growth 2025

VALLENSBÆK

2,740 5.7%

NEW GLOSTRUP Population HOMES ISHØJ

growth 2025

13.4%

Housing growth 2025

870 870 3.2%

VALLENSBÆK

NEW

NEW HOMES

NEW HERLEV

HOMES NEW HOMES

HOMES NEW HERLEV HOMES

Population HOMES growth 2025

2.1%

Housing growth 2025

NEW HOMES Vallensbæk 8% IN TOTAL

Glostrup 15% Brøndby 26%

Ishøj 2% Herlev 14% Glostrup 15%

GLADSAXE

1,050

Brøndby 26% NEW HOMES

620

LYNGBY-TAARBÆK

0.6%

NEW ALBERTSLUND Population HOMES

growth 2025

2021 2022

540 2.3%2023 NEW

Housing HOMES 2024 growth 2025

620

200 GLOSTRUP 1,050

ALBERTSLUND

HOMES HOMES

540

2.3%

Population growth 2025

1,460 1.7% NEW

GLADSAXE Housing HOMES growth 2025

1,440 HOMES

1,440 RØDOVRE

NEW HOMES

1,530 NEW HERLEV HOMES

ISHØJ

RØDOVRE

6.4%

Population growth 2025

1,530 7.6% GLOSTRUP

NEW

Housing HOMES growth 2025

1,530

1,050

HOMES

NEW RØDOVRE

2,740

200 NEW HOMES

2021-2024

NEW GLOSTRUP HOMES

2021-2024

NEW GLOSTRUP

2,740

10,450 10,450 ISHØJ

NEW HOMES

NEW HOMES 2,740 870 NEW HOMESIN TOTAL NEW HOMES

IN TOTAL

870

Lyngby-TaarbækNEW 6%

ALBERTSLUND Lyngby-Taarbæk 6%

HOMES

Gladsaxe 5% Gladsaxe 5% Rødovre 14% Rødovre 14%

BRØNDBY

ISHØJ

GLADSAXE

Municipality share of total new housing

VALLENSBÆK RØDOVRE

HOMES

NEW GLADSAXE

BRØNDBY

NEW HOMES

NEW ALBERTSLUND

NEW HOMES

RØDOVRE

1,440

NEW HOMES

ISHØJ

HOMES

HOMES NEW HOMES

NEW GLOSTRUP

200

NEW NEW LYNGBY-TAARBÆK

NEW LYNGBY-TAARBÆK VALLENSBÆK ALBERTSLUND

ISHØJ

870

540 200

NEW HOMES

NEW BRØNDBY HOMES

870

Albertslund 10% Albertslund 10% VALLENSBÆK Vallensbæk 8%

Vallensbæk 8% Ishøj 2%

Ishøj 2% 14% Herlev Glostrup Herlev 14% 15%

NEW HOMES

200

NEW Brøndby 26%VALLENSBÆK

Glostrup 15%

HOMES

Brøndby 26%

2021

2022 BRØNDBY

VALLENSBÆK

Herlev 14%

Albertslund 10%

2024

NEW VALLENSBÆK

HOMES

ISHØJ

Ishøj 2%

HERLEV Rødovre 14%

LYNGBY-TAARBÆK

620 870

2,740 1,460 ALBERTSLUND

NEW VALLENSBÆK

HOMES

Brøndby 26% Vallensbæk 8%

Gladsaxe 5%

NEW HOMES

200

NEW BRØNDBY

10,450

GLADSAXE

ALBERTSLUND

NEW NEW HOMES HOMES

Glostrup 15%10% Albertslund

NEW HOMES

1,050

GLOSTRUP

Herlev 14% Rødovre 14%

IN TOTAL Lyngby-Taarbæk 6%

HOMES NEW HOMES

ISHØJ

200 1,530

Ishøj 2%

LYNGBY-TAARBÆK

200 1,050

Population HOMES growth 2025

4.5% Gladsaxe 5%

HERLEV

870ALBERTSLUND 1,530 1.0% 8.3% HOMES

46,100

NEW 2021-2024 NEW HOMES HOMES Source: Byggefakta

ALBERTSLUND

NEW BRØNDBY

NEW RØDOVRE

Geﬁon

NEW GLOSTRUP

870 1,530

NEW BRØNDBY

8% 6% 6.1% Vallensbæk Lyngby-Taarbæk

Rødovre 14%

NEW GLADSAXE

2,740 1,440

ALBERTSLUND NEW HOMES NEW GLADSAXE HOMES

62,500

NEW GLOSTRUP

HOMES NEW HOMES 2024

HOMES

BRØNDBY

GLOSTRUP NEW HOMES GLADSAXE

Wihlborgs

1,050 1,460 HERLEV

HOMES

NEW LYNGBY-TAARBÆK

1,050

1,530 2022 5402023 1,050 1,460

NEW RØDOVRE

7.3% Albertslund 10%

NEW HOMES

2021

Housing growth 2025

75,000

2023

1,530

NEW HOMES 2024

1,530 540 HOMES

NEW HOMES IN TOTAL

2021

1,440 2023

GLOSTRUP

HERLEV

Gladsaxe 5%

NREP

2022

HOMES

10.9% Lyngby-Taarbæk 6% 8.9%

10,450

NEW GLADSAXE

110,940

10,450 1,460

NEW HOMES

Share of total area

90,903

2021

1,460

area (m2)

2021-2024

NEW GLADSAXE

HERLEV

Brøndby 26%

AG Development

2021-2024 HOMES

2022

Glostrup 15%

GLADSAXE

2023

1,460

Glostrup 15%

Herlev 14%

2022

540

Herlev 14%

HOMES

Glostrup 15%10% Albertslund

NEW HOMES

2024

CASA

2024

620

NEW LYNGBY-TAARBÆK

Herlev 14% Rødovre 14% HERLEV

HOMES

Gladsaxe 5% 2021 Rødovre 14% 2022 Albertslund 10% 2023 Vallensbæk 8% 2024 NEWIshøj 2%

HOMES

Albertslund 10% NEW HOMES Vallensbæk 8% 6% IN TOTAL Lyngby-Taarbæk

NEW LYNGBY-TAARBÆK

2023residential

2021

Glostrup 15%

Population 1,460 growth 2025

2022Expected

Company

ANNUAL REVIEW

Herlev 14%

NEW HOMES Vallensbæk 8% IN TOTAL

10,450 HOUSING GROWTH IN THE Lyngby-Taarbæk 6%

RESIDENTIAL

Ishøj 2%

Albertslund 10%

OFFICE

Vallensbæk 8%

Rødovre 14%

LOGISTICS

2021-2024

Gladsaxe 5%

RETAIL

10,450

HOTEL

k 6%

Lyngby-Taarbæk 6%

ISHØJ

VALLENSBÆK

ISHØJ

2023

202

2024

202

ÅRSOVERBLIK – FORVENTNINGER TIL 2021 ANNUAL REVIEW – EXPECTATIONS FOR 2021 RED INVESTOR SURVEY Stor investeringsappetit og tiltro til finansieringsvilkår RED har spurgt de største og mest aktive investorer på det danske marked om deres forventninger til 2021, og der er intet der tyder på, at de seneste års høje konkurrencen om de mest attraktive ejendomme aftager lige foreløbigt� I 2021 forventer 80% af de adspurgte investorer at opkøbe flere ejendomme til deres porteføljer, mens 20% af investorerne enten forventer en uændret eller reduceret porteføljestørrelse ( figur 12)� Samtidig ser vi både en fortsat stor tilgang af nye udenlandske investorer, og at de eksisterende udenlandske investorer har store summer kapital akkumuleret grundet rejserestriktionerne, der begrænsede deres investeringsmuligheder i 2020� Der er således en stor investeringsappetit blandt både nye og eksisterende investorer, hvilket forventes at skærpe konkurrencen om de bedste ejendomme yderligere�

Med henblik på at sikre likviditet til virksomhederne valgte den Europæiske Central Bank at fastholde de rekordlave renteniveauer gennem 2020, og der er intet, der indikerer, at renteniveauet vil ændres signifikant i løbet af 2021� Dette skaber stabile og gunstige finansieringsvilkår for ejendomsinvestorerne og afspejles i, at hele 96% af investorerne forventer uændrede eller forbedrede finansieringsvilkår i 2021 ( figur 14)� Positive forventninger til prime ejendomme Samtlige af de adspurgte investorer ser positivt på udviklingen i værdien af deres portefølje i 2021� Mens 2/3 af investorerne forventer, at værdien af deres porteføljer vil stige, forventer den sidste tredjedel ikke nogen ændringer i værdien af deres porteføljer ( figur 13)� Adspurgt til hvilket segment, som investorerne forventer vil klare sig bedst i 2021, svarer flest logistikejendomme (46%) og boligejendomme (36%), som også er de aktivklasser, der klarede sig bedst igennem 2020, mens 12% tror mest på kontorejendomme�

De positive forventninger kommer efter en rekordhøj aktivitet i sidste kvartal af 2020 og er baseret på en forventning om, at covid19 og usikkerhederne forbundet hermed forsvinder i løbet 2021� De seneste års store efterspørgsel efter prime ejendomme, som har afledt historiske lave afkastniveauer, forventes at fortsætte ind i 2021� Kombineret med en forventning om en fortsat stor investeringsappetit og attraktive finansieringsvilkår medfører den høje efterspørgsel, at vi forventer, at afkastkravet for de mest attraktive kontor- og boligejendomme vil blive reduceret yderligere i løbet af 2021� Netop afkastet er også det markedsforhold, som de fleste investorer (70%) forventer vil påvirke markedsværdien af deres portefølje i 2021� Derudover forventer en stor andel af investorerne ligeledes, at værdien af deres porteføljer vil blive påvirket af en stigning i lejeniveauet (44%) og af en reduktion i tomgangen (33%)�

Figure 12: Investor Confidence Index – Portfolio size

Figure 13: Investor Confidence Index – Portfolio value

What is your objective with regard to the size of your portfolio in terms of acquisition/disposal during 2021?

How do you see the value of your portfolio developing during the next six months?

100%

Increase: more acquisition the disposal

Increasing Unchanged

Stable: as much disposal as acquisition 73%

80%

23%

7% 13%

4% Q1 2020

Q1 2021

20 // RED – Danish Investment Atlas 2021

Decrease: more disposal than acquisition

Declining 64%

67%

33%

3% Q1 2020

Q1 2021

ANNUAL REVIEW Positive expectations for prime properties All respondents have positive expectations for the value of their portfolios in 2021. While two-thirds of the investors expect the value of their portfolios to increase, the other third do not expect any changes in their portfolio value ( figure 13). Asked which segment they expect to perform best in 2021, most investors answer logistics properties (46%) and residential properties (36%), which are also the asset classes that performed best through 2020, while 12% have most trust in office properties.

The positive expectations come after a record high activity in the last quarter of 2020 and are based on an expectation that covid19 and the associated uncertainties will disappear during 2021. The strong demand in recent years for prime properties, which has led to historically low yield levels, is expected to continue in 2021. Combined with an expectation of continued strong investment appetite and attractive financing conditions, the high level of demand leads us to expect that the yield requirement for the most attractive office and residential properties will be further reduced during 2021. The yield level is also the market factor that most investors (70%) expect to affect the market value of their portfolios in 2021. In addition, a large proportion of investors expect the value of their portfolios to be affected by a rise in the rent levels (44%) and a reduction in the vacancy rates (33%).

LOGISTICS

80% of the respondents expect to acquire more properties for their portfolios in 2021, while 20% of the investors either expect an unchanged or reduced size of their portfolios ( figure 12). At the same time, we see both a continued large influx of new foreign investors and that the existing foreign investors have large sums of capital accumulated due to the travel restrictions that limited their investment options in 2020. Thus, there is a strong investment appetite among both new and existing investors, which is expected to further accentuate the competition for the best properties.

To ensure liquidity for businesses, the European Central Bank chose to maintain the record low interest rate levels through 2020, and there is nothing to suggest that the interest rate levels will change significantly in 2021. This leads to stable and favourable financing conditions for the property investors and is reflected in the fact that 96% of investors expect unchanged or improved financing conditions in 2021 ( figure 14).

OFFICE

Strong investment appetite and confidence in financing conditions RED has asked the largest and most active investors in the Danish market about their expectations for 2021, and there is nothing to suggest that the high competition for the most attractive properties seen in recent years will wane in the nearest future.

RESIDENTIAL

RED INVESTOR SURVEY

100%

100% Improved conditions

18%

25%

Unchanged conditions Worsened conditions

64% 71%

18% 4% Q1 2020

Q1 2021

The Cushman & Wakefield | RED Investor Confidence Index The index for Denmark includes responses from 33 of the most active investors in Denmark in the years 2020 and 2021. The index monitors the expectations from highly active investors in the Danish CRE market for the next six months.

RETAIL

What is the future outlook for your financing compared with your current financing? (In terms of the financing of new acquisitions or the refinancing of your existing properties.)

The broad coverage reflects the interest for non-biased objective analysis and increased transparency. Furthermore, the coverage ensures that the findings are representative reflections of the current investor confidence in the Danish CRE market. We conduct the survey on a biannual basis, allowing us to track changes and interpret what they mean for the market and how to best respond when making investment decisions. Annual Review // 21

HOTEL

Figure 14: Investor Confidence Index – Financing conditions

RED facilitated the sale of a portfolio of rentcontrolled residential properties in Copenhagen.

22 // RED – Danish Investment Atlas 2021

ANNUAL REVIEW RESIDENTIAL

BOLIG RESIDENTIAL Investeringsmarkedet 2020 // Investment Market 2020

Volumen & investorer 2020 // Volume & Investors 2020

OFFICE

Top 5 transaktioner 2020 // Top 5 Transactions 2020

Highlight: OMK-Ejendomme // Highlight: Rent-Controlled Properties

Highlight: Seniorboliger // Highlight: Senior Housing

Forventninger til 2021 // Expectations for 2021

RETAIL

LOGISTICS

Transaktioner & nøgletal // Transactions & Key Figures

HOTEL

24 26 28 30 32 36 38

Residential // 23

BOLIG – INVESTERINGSMARKEDET 2020 RESIDENTIAL – INVESTMENT MARKET 2020 Vækst i volumen drevet af stærkt 4. kvartal Et stabilt ejendomsmarked, fortsatte lave renter, meget kapital og et stort placeringsbehov førte til store forventninger til 2020� Frem til 11� marts 2020, hvor Danmark blev ramt af første nedlukning, var der stor efterspørgsel på stort set alle aktivklasser, men med nedlukningen blev særligt turnkey projekter sat på pause, hvilket skyldtes, at investorerne ville afvente og se konsekvenserne af covid-19 an� Dette bremsede aktiviten i årets 2� og 3� kvartal, men med en stærk afslutning i årets 4� kvartal nåede den samlede transaktionsvolumen i boligsegmentet op på 41,5 mia� kr�, hvilket er svarende til en vækst på 56% i forhold til 2019 og en andel på 57% af den samlede volumen i 2020 ( figur 16)� Aktiviteten var særlig høj i årets 4� kvartal, hvor der blev investeret 23,4 mia� kr� i boligejendomme svarende til 56% af den samlede volumen� Denne høje aktivitet var i høj grad drevet af danmarkshistoriens største transaktion, da Heimstaden købte en bolig- og erhvervsportefølje af Niam til 12,1 mia� kr� (11,3 mia� kr� for boligdelen)�

Heimstadens køb bidrog ligeledes til, at de udenlandske investorer øgede deres investeringer til 25,1 mia� kr�, hvilket svarer til en andel på 61% af den samlede volumen og en vækst på 163% i forhold til deres samlede investeringer i 2019� Modsat var de danske investorers aktivitetsniveau mere eller mindre uændret med investeringer for 16,4 mia� kr� Den samlede vækst i boligsegmentet i 2020 var således alene drevet af en vækst blandt de udenlandske investorer� Investorerne øger deres investeringer i Storkøbenhavn Mens der var vækst i transaktionsvolumen indenfor alle geografiske områder, var væksten særlig stor i Storkøbenhavn, som dermed halede ind på København som det

Activity was particularly high in the fourth quarter, where DKK 23.4bn was invested in residential properties, equivalent to 56% of the total volume. This high level of activity was driven by the largest transaction in the Danish history, what Heimstaden’s purchased a residential and commercial portfolio from Niam for DKK 12.1bn (DKK 11.3bn for the residential part).

24 // RED – Danish Investment Atlas 2021

Ejendomsselskaberne øger aktiviteten Ejendomsfondene, der historisk set har domineret boligmarkedet, investerede 15,7 mia� kr� i boligejendomme i 2020� Dermed blev deres andel af den samlede volumen reduceret fra 52% i 2019 til 38% i 2020 ( figur 15)� Samtidig steg ejendomsselskabernes investeringer til 15,8 mia� kr�, hvilket ligeledes svarer til en andel på 38% af den samlede volumen�

Figure 15: Residential – Investor type breakdown 2020

RESIDENTIAL VOLUME IN TOTAL

Growth in volume driven by a strong 4th quarter A stable property market, continued low interest rates, large amounts of capital, and a great need for placement led to high expectations for 2020. Until 11th of March 2020, when Denmark was hit by the first lockdown, there was a strong demand for almost all asset classes, but with the lockdown, turnkey projects in particular came to a halt, as investors wanted to wait and see what impact covid-19 would have. This caused a decline in the activity in the second and third quarters of the year, but with a strong fourth quarter the total transaction volume in the residential segment reached DKK 41.5bn, which is equivalent to an increase of 56% from 2019 and represents a share of 57% of the total volume in 2020 ( figure 16).

geografiske område med den højeste aktivitet ( figur 17)� Særligt de udenlandske investorer øgede deres investeringer i Storkøbenhavn, og investerede 7,7 mia� kr� svarende til en vækst på hele 711%� Den stigende aktivitet udenfor København skyldes i høj grad et begrænset udbud af attraktive københavnske boligejendomme�

41.5 BN DKK

Heimstaden’s investment also contributed to investments made by foreign investors increasing to DKK 25.1bn, equivalent to a share of 61% of the total volume and an increase of 163% compared to the total investments in 2019. In contrast, the Danish investors’ level of activity was more or less unchanged with investments totalling DKK 16.4bn. The overall growth in the residential segment in 2020 was therefore driven solely by a growth in investments made by foreign investors.

Increasing investments in Greater Copenhagen While there was growth in transaction volume in all geographical areas, the growth in Greater Copenhagen was particularly strong,

Real estate company 38% Property fund 38% Institutional investor 13% Private investor 9% Other 2%

which thereby almost caught up on Copenhagen as the geographical area with the highest level of activity ( figure 17). Particularly the foreign investors increased their investments in Greater Copenhagen, and invested DKK 7.7bn, equivalent to a growth of no less than 711%. The increasing levels of activity outside Copenhagen were to a large extent due to a limited supply of attractive residential properties in Copenhagen.

Real estate companies increase their activity Property funds, which historically have dominated the residential market, invested DKK 15.7bn in residential properties in 2020. Thereby, their share of the total volume fell from 52% in 2019 to 38% in 2020 ( figure 15). At the same time investments by real estate companies increased to DKK 15.8bn, which is also equivalent to a 38% share of the total volume.

ANNUAL REVIEW

Figure 16: Residential – Transaction volume 2012-2020 50

41.5

35.4

BN DKK

39%

28.9

48%

26.6

20.9 20

RESIDENTIAL

38.6

59% 64% 62% 8.6 78%

22% 2012

10.1

10.4

63%

55%

37%

45%

2013

2014

61%

61% 52% 41%

38% 2015

36%

2016

Source: C&W | RED

2017

Danish

2018

2019

2020

OFFICE

Foreign

LOGISTICS

Figure 17: Residential – Historic geographic breakdown 2018-2020 20

27%

40% 75%

73%

89%

5 79%

60% 64%

0 2018

RETAIL

21%

36%

2019

2020

COPENHAGEN Source: C&W | RED

71%

66%

29%

34%

2018

2019

60% 46% 65% 54%

2020

GREATER COPENHAGEN Danish

2018

77% 25%

35%

23%

2019

2020

AARHUS

11% 2018

2019

2020

REST OF DENMARK

Foreign

HOTEL

BN DKK

40%

Residential // 25

41.5

29%

9.7 BN DKK

23%

BN DKK

GREATER COPENHAGEN Danish 21% Foreign 79% GREATER AARHUS COPENHAGEN Danish 77% Danish 21% Foreign 23% Foreign 79%

BOLIG – 4.7 VOLUMEN & INVESTORER 2020 9.7 BN DKK BN DKK

11% 23%– VOLUME & INVESTORS 2020 RESIDENTIAL

6.3 BN DKK

15%

OTHER ZEALAND Danish 32% Foreign 68% AALBORG OTHER ZEALAND Danish 100% Danish 32% Foreign 0% Foreign 68%

0.5 6.3 BN DKK BN DKK

1% 15%

1.7 BN DKK

12.1 BN DKK

29%

Foreign 65% OTHER JUTLAND FUNEN Danish 43% Danish 35%BN DKK Foreign 57% Foreign 65%29% GREATER COPENHAGEN

12.1

15% 4%

11%

Foreign 60%

Danish 35%

BN DKK BN DKK

BN DKK

9.7 BN DKK

23%

Foreign 79%

12.1

OTHER ZEALAND

6.3

Danish 32%

AALBORG

BN DKK

AARHUS

29%

Foreign 68%

Danish 100%

15%

COPENHAGEN

12.1 12.1

Danish 40% BN DKK

BN DKK 60% Foreign

29% 29%

COPENHAGEN COPENHAGEN Danish 40% Danish 40% Foreign 60% Foreign 60%

AALBORG

6.3

Danish 100% BN DKK Foreign 0% 15%

Danish 32% Foreign 68%

9.7

FUNEN

1.7

OTHER JUTLAND BN DKK

Danish 35%

BN DKK

23%

Foreign 65%

Danish 43%

GREATER COPENHAGEN

OTHER ZEALAND

GREATER COPENHAGEN

9.7 9.7

Danish 21% BN DKK

BN DKK 79% Foreign

23% 23%

Foreign 57%

6.4

1.7

OTHER JUTLAND

BN DKK

15%

4.7 BN DKK

11%

Danish 43%BN DKK Foreign 57% 4%

Danish 77% Foreign 23%

BN DKK

11%

BN DKK

1% 2021 26 // RED – Danish Investment Atlas

GREATER GREATER COPENHAGEN COPENHAGEN Danish 21% Danish 21% Foreign 79% Foreign 79% COPENHAGEN

ZEALAND

Danish 35% Foreign 65%

AARHUS

4.7 0.5

FUNEN

6.3 BN DKK

15%

ZEALAND OTHER ZEALAND OTHER OTHER ZEALAND Danish 32% Danish 32% Danish 32% BN DKK Foreign 68% BN DKK 68% Foreign Foreign 68%

6.3 6.3 15% 15%

AARHUS Danish 77% Foreign 23%

1.7

AALBORG Danish 100%

BN DKK

Foreign 0% AALBORG

FUNEN

1.7 1.7

Danish 35% BN DKK

BN DKK 65% Foreign

4% 4%

RESIDE VOLUME

BN D

Foreign 0%

15%

Danish 21%

Foreign 23%23%

JUTLAND

Foreign

GREATER COPENHAGEN

Danish 77%BN DKK

BN DKK

41.5

Danish

BN DKK

9.7

AARHUS

0.5

6.4

Foreign 60%

Foreign 23%

11%

Danish 40%

Foreign 61% RESIDENTIAL VOLUME IN TOTAL

Foreign 79%

Danish 77%

BN DKK

AALBORG COPENHAGEN

Danish 39%

Danish 21%

AARHUS

4.7 0.5

41.5

Danish 40%

FUNEN

6.4 1.7 4.7

RESIDENTIAL VOLUME IN TOTAL

COPENHAGEN

FUNEN FUNEN Danish 35% Source: C&W |35% RED Danish Foreign 65% Foreign 65%

De tre største investorer er alle kendetegnet ved at investere i ejendomme på tværs af Danmark, hvilket i 2020 bidrog til en fremgang i transaktionsvolumen indenfor alle geografiske områder på nær Aalborg og Fyn.

ANNUAL REVIEW

Figure 18: Residential transactions (BN DKK) Area

2019

2020

Copenhagen

9.7

12.1

25%

Greater Copenhagen

2.8

9.7

249%

Other Zealand

2.6

6.3

146%

Funen

1.9

1.7

-10%

Aarhus

3.6

4.7

30%

Aalborg

0.7

0.5

-18%

Other Jutland

5.3

6.4

21%

26.6

41.5

56%

Total

Change

RESIDENTIAL

Tre investorer dominerer markedet Sidste års mest aktive investor, Koncenton, blev i år overhalet af Heimstaden, som den mest aktive investor. Med boliginvesteringer for 12,4 mia. kr. tegnede Heimstaden sig alene for 30% af den samlede volumen, hvilket i høj grad var drevet af deres køb af Niams danske boligportefølje til 11,3 mia. kr. Årets anden og tredje mest aktive investorer var Koncenton og Niam. Samlet set investerede årets tre største investorer 17,8 mia. kr. i boligejendomme. Dette svarer til 43% af den samlede transaktionsvolumen, hvilket er en væsentligt højere andel end i 2019, hvor de tre største investorer stod for en andel på 27% af den samlede volumen.

OFFICE

Three investors dominate the market The most active investor of 2019, Koncenton, was in 2020 surpassed by Heimstaden as the most active investor. With residential investments totalling DKK 12.4bn, Heimstaden alone accounted for 30% of the total volume, primarily driven by their purchase of Niam’s Danish residential portfolio for DKK 11.3bn. The second and third most active investors of the year were Koncenton and Niam. The three largest investors altogether invested DKK 17.8bn in residential properties. This is equivalent to 43% of the total transaction volume, a substantially higher share than in 2019, where the three largest investors accounted for 27% of the total volume.

LOGISTICS

The three largest investors are all characterized by investing across Denmark, which in 2020 contributed to an upturn in the transaction volume in all geographical areas except Aalborg and Funen.

Figure 19: Residential – Top 5 investors 2020 Investor

Origin

Volume (M DKK)

No. of transactions

Heimstaden

12,435

Koncenton

3,008

Niam

2,316

NREP

1,820

Goldman Sachs

1,500

RETAIL

Source: C&W | RED

Figure 20: Residential – Top 5 investors 2012-2020 Investor

Origin

Volume (M DKK)

No. of transactions

Heimstaden

36,705

Koncenton

11,780

Niam

9,890

Patrizia

9,518

Core Bolig

8,854

HOTEL

Source: C&W | RED

Annual Residential Review // // 2727

BOLIG – TOP 5 TRANSAKTIONER 2020 RESIDENTIAL – TOP 5 TRANSACTIONS 2020 Photo: Photo Marinas

1. NIAM PORTFOLIO The all-time largest transaction on the Danish real estate market was announced in December 2020 when Heimstaden acquired Niam’s Danish residential portfolio at a price of DKK 12.1 bn (DKK 11.3 bn for the residential part). The residential part consists of 152 residential properties with 6.237 residential units and a total area of 594,000 m². Of this 34,000 m² are under construction and are expected to be completed within a year. The portfolio primarily consists of town houses located near cities such as Odense, Vejle, Horsens, and Randers.

Price (DKK):

Investor:

11,300,000,000

Heimstaden

Size (m2):

Vendor:

594,000

Niam

Photo: Himmelbyen

2. PROJEKT VORTEX In November 2020, NREP sold a portfolio with three newly erected residential properties: Himmelbyen in Ørestad, Strandhaverne in the southern part of Copenhagen, and Risskov Husene in Risskov near Aaarhus. The portfolio consists of a total of 521 residential units and a smaller number of commercial leases and has a total area of 50,928 m². The portfolio was acquired by the Danish pension companies Velliv and Industriens Pension at an estimated price of DKK 1.815 bn.

Est. price (DKK):

28 // RED – Danish Investment Atlas 2021

Investor:

1,815,000,000

Velliv & Industriens Pension

Size (m2):

Vendor:

50,928

NREP

ANNUAL REVIEW Investor:

1,500,000,000

Goldman Sachs

Size (m2):

Vendor:

70,000

Birch Ejendomme

Photo: Arkitema Architects

4. KIRKEBJERG

Est. price (DKK):

1,077,000,000

LOGISTICS

The developer Casa sold a residential project with 463 residential units and a total area of 37,440 m² located in the development area Kirkebjerg in Brøndby west of Copenhagen to Capman Real Estate on behalf of the German pension fund Bayerische Versorgungskammers. The properties are currently under construction and are expected to be completed in beginning of 2023. The project was acquired at an estimated price of DKK 1,077 m. Investor:

Capman Real Estate (Bayerische Versorgungskammers)

Size (m2):

Vendor:

37,440

Casa

Photo: RED

5. SF MANAGEMENT PORTFOLIO

Price (DKK):

Investor:

+1,000,000,000

AXA Investment Managers

Size (m2):

Vendor:

Conﬁdential

SF Management

HOTEL

The final top transaction in the residential segment in 2020 is AXA Investment Managers acquisition of a portfolio with residential properties primarily located Greater Copenhagen and in Aarhus. The portfolio was acquired from SF Management, who has confirmed that there has been a transaction, but neither the seller nor the buyer wishes to comment further on the transaction.

RETAIL

Est. price (DKK):

RESIDENTIAL

On the 30th of December 2020 it was announced that Goldman Sachs had acquired a portfolio from Birch Ejendomme at an estimated price of DKK 1.5 bn. The portfolio consists of seven residential projects with more than 900 residential units and has a total area of more than 70,000 m². The seven projects are located across five different regional growth cities in Jutland: Silkeborg, Horsens, Kolding, Viborg, and Randers. All of the properties are expected to be completed in 2022.

OFFICE

Photo: Årstiderne Arkitekter

3. BIRCH EJENDOMME PORTFOLIO

Residential // 29

BOLIG – HIGHLIGHT: OMK-EJENDOMME RESIDENTIAL – HIGHLIGHT: RENT-CONTROLLED PROPERTIES

Boligudlejningsejendomme med en leje fastsat efter reglerne om omkostningsbestemt husleje har længe været en efterspurgt ejendomstype som følge af en lav tomgangsrisiko og muligheder for optimering gennem modernisering og huslejestigninger� Den politiske uro omkring boligreguleringslovens (BRL) § 5, stk� 2 begrænsede dog investorefterspørgslen på udlejningsejendomme i den gamle boligmasse i 2019� Efter indgrebets ikrafttrædelse i sommeren 2020 ser vi nu dets indvirkning� Formålet med det politiske indgreb i §5, stk� 2 var at begrænse udenlandske kapitalfondes opkøb af boligudlejningsejendomme i den gamle boligmasse og indskrænke mulighederne for at modernisere og derefter opkræve højere husleje� Indgrebet blev vedtaget 1� juli 2020� Udvikling i investeringsaktiviteten i OMK-ejendomme Debatten om ændring af BRL §5, stk� 2 skabte i 2019 stor usikkerhed, hvilket forårsagede tilbageholdne investorer og en markant nedgang i transaktionsvolumen� Transaktionsvolumen i OMK-segmentet blev således næsten halveret fra 2018 til 2019 ( figur 21)� Efter loven trådte i kraft er de første handler efter de nye regler gennemført� Transaktionsvolumen er stort set tilsvarende volumen i 2019, og niveauet synes derfor at have fundet en bund� Den store forskel i forhold til tidligere år er, at investortypen har skiftet karakter� De udenlandske fonde og de danske pensionskasser har været yderst tilbageholdende, mens de private investorer er tilbage på markedet� Hvor investeringsaktiviteten tidligere kom fra danske såvel som udenlandske investorer, kom aktiviteten i 2020 primært fra danske investorer� Konsekvensen af ændringen i Boligreguleringslovens § 5, stk� 2 har derfor vist sig ved en begrænset tiltrækning af udenlandsk kapital, som forventet� Begrænsede prisreguleringer ’Buy it, fix it, sell it’� Før indgrebet var flere aktørers investeringsstrategi at modernisere ledige boligenheder i den gamle bygningsmasse med en højere leje som følge� Der var derfor flere kilder til at opnå et højt afkast, hvorfor investorer var villige til at acceptere afkast helt ned i niveauet 1-2%�

30 // RED – Danish Investment Atlas 2021

Efter ændringen i §5 stk� 2 skal investorernes investeringsstrategier tilpasses en 5-årig karensperiode, hvor investorer ikke må istandsætte tomme lejemål og realisere gevinsten som følge heraf ved at udleje til det lejedes værdi� Før der var politisk klarhed, forventede vi, at en forøgelse af beløbsgrænsen for renoveringer af lejligheder vil kunne give prisfald på op til 15-20%� Vi kan dog nu konstatere et begrænset prisfald i niveauet 8-12% på de første OMK-ejendomme, der har været handlet efter det politiske indgreb� Dette kan skyldes, at vi ikke længere oplever ejendomsfonde som værende de højstbydende investorer� Investorbilledet er skiftet I dag er udsigterne til højere afkast længere, og en 5-7 års exitstrategi synes dermed ikke rentabel for flere investorer� Kapitalfonden Blackstone var i 2018 den største investor i segmentet for OMK-ejendomme med investeringer for hele 3,8 mia� kr� svarende til 33% af den samlede volumen� I 2019 stod Blackstone for blot 12%, og i 2020 har kapitalfonden ikke investeret i den gamle boligmasse, som er omfattet af OMK-reglerne�

afkastkrav, og ikke forventer ’hurtigt afkast’ men i stedet fastholder ejendommene i deres portefølje over en længere tidsperiode� Ejendomsklassen er derfor fortsat en attraktiv investeringsmulighed for private investorer, på trods af karensperiode og en bremsning i de forventede huslejestigninger� OMK-lejeboliger har en lav genudlejningsrisiko, men samtidigt genererer et højere afkast end alternative aktivklasser, såsom obligationer – der i de seneste år har vist sig sværere at tjene penge på� Aktiviteten i 2021 Vi forventer større investeringsaktivitet i OMK-ejendomme i 2021 som følge af, at den politiske uro har lagt sig� Endvidere vil bankernes negative renter og forringede indtjeningsmuligheder på alternative aktivklasser få flere private investorer til at søge mod investeringsejendomme� De private investorers mere langsigtede investeringshorisont er fordrende for OMK-segmentet, hvor ejendommene handles til lave kvm-priser og afkastet er sikkert� De strammere udlånsvilkår til denne type ejendom, hvor den løbende forrentning er lav, vil virke dæmpende på prisudviklingen, men vi forventer et meget aktivt marked i 2021�

Hvor kapitalfonde tidligere udgjorde den største investortype, er det nu særligt private investorer og ejendomsselskaber, der efterspørger OMK-ejendomme ( figur 22)� Vi ser i dag ind i et marked, der er ved at finde sig selv igen, hvor private investorer er villige til at købe OMK-ejendomme til lave

Figure 21: Rent-controlled properties – Transaction volume 2018-2020 12 10 50% 8 BN DKK

Private investorer har overtaget efterspørgslen

Foreign Danish

6 28% 4 50% 2 0

72%

98%

Source: C&W | RED 2018

2019

2020

Trend in investment activity for rent-controlled properties The debate about amending section 5(2) of the Housing Regulation Act led to great uncertainty in 2019, resulting in investor reluctance and a significant decline in the transaction volume. In the rent-controlled segment, the transaction volume fell by almost half from 2018 to 2019 ( figure 21). After the Act entered into force, the first transactions under the new rules have now been completed. The transaction volume is almost at the same level as in 2019 and therefore seems to have bottomed out. The major difference compared with previous years is that the type of investor has changed. The foreign property funds and the Danish pension funds have been hesitating, while private investors have found their way back into the market. Where the investment activity

Following the amendment of section 5(2), investors have to adjust their investment strategies to allow for a 5-year waiting period in which investors are not allowed to renovate vacant properties and realise the rent potential by letting the property at market value. Before political clarity was achieved, we believed that an increase in the threshold for renovation of flats could result in a decline in prices of up to 15-20%. However, it is now clear that the decline in prices has been limited to 8-12% for the first rent-controlled properties that have been sold after the political Act took effect. One of the reasons for this could be that the investor landscape has changed and property funds are no longer the highest bidders.

Change in the landscape Today, the prospects of generating a higher return are more distant, and a 5- or 7-year exit strategy no longer seems profitable to some investors. In 2018, Blackstone was the largest investor in the rent-controlled property segment with investments worth as much as DKK

Today, we are facing a market which is in the process of finding its feet again, where private investors are willing to buy rent-controlled properties at low yield levels and are not expecting a ’quick return’, but instead intend to keep the properties in their portfolio for a longer period of time than previously. The property class is therefore still an attractive investment opportunity for private investors, regardless of the waiting period and the brake that has been put on expected rent increases. Rent-controlled properties have a low re-letting risk, while at the same time generating a higher return than alternative asset classes such as bonds – which have been difficult to make a profit from in recent years.

The activity in 2021 We expect to see greater investment activity in rent-controlled properties in 2021 as a result of political turmoil having eased. Furthermore, the banks’ negative interest rates and the reduced revenue potential in alternative asset classes will push a greater number of private investors towards investment properties. The private investors’ more longterm investment horizon is a good fit with the rent-controlled segment, where the properties are bought and sold at low prices per m² and the return is assured. The stricter borrowing terms for this type of property where the running yield is low will slow down price increases, but we expect to see a very active market in 2021.

ANNUAL REVIEW RESIDENTIAL

The purpose with the political interference in section 5(2) was to reduce the foreign property funds investments in residential rental properties in the old housing stock and to restrict the options for modernising such properties and then increasing the rent. The Act was adopted on 1st of July 2020.

Limited price adjustments ’Buy it, fix it, sell it’. Before the Act was introduced, several market players pursued an investment strategy involving modernisation of vacant units in the old housing stock, followed by increases in the rent levels. Thus, there were a number of avenues for a high return on investment, and investors were therefore willing to accept running yields as low as 1-2%.

3.8bn, equivalent to 33% of the total volume. In 2019, Blackstone accounted for only 12%, and in 2020 they did not invest in rent-controlled properties at all. While property funds used to represent the largest type of investor, it is now private investors and real estate companies which are looking to invest in rent-controlled properties ( figure 22).

OFFICE

The segment for rent-controlled residential properties have long been in demand because of low vacancy rates and the potential to optimise through modernisation and rent increases. However, the political turmoil regarding section 5(2) of the Danish Housing Regulation Act (boligreguleringsloven) reduced the investor demand for rental properties in the old housing stock in 2019. After the Act entered into force in the summer of 2020, we are now seeing the effects.

previously came from both Danish and foreign investors, the activity in 2020 came primarily from Danish investors. As expected, the effects of the amended section 5(2) of the Housing Regulation Act have therefore manifested in a limited attraction of foreign capital.

LOGISTICS

Private investors have taken over the demand

100

10% 18%

12% 10%

14%

27%

60 58%

Institutional investors

42% 15%

Others

Real estate companies Property funds

20 20% 0

31%

34%

2019

2020

Private investors

HOTEL

BN DKK

RETAIL

Figure 22: Rent-controlled properties – Investor type breakdown 2018-2020

Source: C&W | RED 2018

Residential // 31

BOLIG – HIGHLIGHT: SENIORBOLIGER RESIDENTIAL – HIGHLIGHT: SENIOR HOUSING Et fokus på den stigende efterspørgsel på seniorbofællesskaber Efterspørgslen på fællesskabsbaserede boformer har været stigende de senere år og drives af trends og ikke mindst den demografiske udvikling� Der er en stor variation i de fællesskabsbaserede boformers værdigrundlag og organisering; lige fra økosamfund med selvbyggere til de konceptuelle seniorbofællesskaber, der udvikles af professionelle aktører� Segmentet med demografien i ryggen Seniorbofællesskaber er den kategori, som har fået mest opmærksomhed, og aktiviteten drives i høj grad af den demografiske udvikling, hvor antallet af seniorer er kraftigt stigende� Stigningen skyldes ganske naturligt, at de meget store efterkrigsgenerationer bliver ældre� Definitionen af seniorer ligger ikke fast, men i mange tilfælde opdeles gruppen i 52 til 61-årige, 62 til 71-årige, 72 til 81-årige samt +82-årige� Det er værd at bemærke, at udviklingen netop er knyttet til efterkrigsgenerationerne, og at væksten i grupperne ændres over tid, hvor der i de kommende 10-15 år på landsplan bliver færre i gruppen af 52 til 61-årige og betydeligt flere i de ældre aldersgrupper ( figur 23)� Der er naturligvis variationer på tværs af kommuner og regioner, men tendensen er tydelig og bør indgå i investorernes overvejelser omkring den langsigtede efterspørgsel, og ikke mindst hvor investeringerne foretages geografisk� Det handler derfor om at finde områder, hvor den langsigtede genudlejningsrisiko er lav, og om at arbejde med en bygningsmasse, som ikke er målrettet en meget snæver aldersgruppe�

Efterspørgslen på seniorbofællesskaber hænger også sammen med en større flytteaktivitet blandt seniorerne� Flytteaktiviteten er størst for de 50 til 75-årige og aftager i takt med, at alderen stiger ( figur 24)� Som følge af et stigende antal borgere i aldersgrupperne er der naturligt en større flytteaktivitet� Dette gælder dog også, når der korrigeres for ændringen i antallet af personer i aldersgrupperne� Flytteaktiviteten er i mange tilfælde steget med 25-35% siden 1999 for personer i alderen omkring de 55 år� Den øgede flytteaktivitet hænger formentlig sammen med, at seniorer er mere aktive end tidligere og at deres økonomiske formåen er bedre som følge af solide friværdier og arbejdsmarkedspensioner� Nytænkende koncepter og mange aktører Som nævnt indledningsvist er der forskellige tilgange til etableringen af fællesskabsbaserede boliger� Den oprindelige model er en ”bottom up”, hvor et antal personer går sammen og skaber deres eget projekt med hjælp fra eksterne rådgivere� Den modsatte model er en ”top down”, hvor en udvikler eller investor skaber et kommercielt ejer- eller lejeboligkoncept, som målrettes en bestemt gruppe af potentielle beboere� Inden for den sidstnævnte model er der flere aktører eksempelvis Bovieran, Plushusene & Agorahaverne�

SENIORERNES FLYTTEAKTIVITET VIVE – Det Nationale Forsknings- og Analysecenter for Velfærd har undersøgt seniorernes flytteaktivitet� Undersøgelsen viser blandt andet at: • 25% af de 52-62-årige overvejer at flytte inden for de næste fem år, mens andelen blandt de 82-97årige udgør 13%� • 50% af dem, der overvejer at flytte, ønsker at flytte til en mindre bolig� • 30% kunne forestille sig at flytte i et seniorbofællesskab, og interessen er størst blandt de 52-62-årige�

Hertil kommer en række aktører, hvor konceptet i større eller mindre grad er målrettet seniorer, eksempelvis Eco-village og AlmenR, men også enkeltprojekter drevet af pensionskasser, de almene boligorganisationer og lokale udviklere i hele landet�

Fortsættes på næste side To be continued on next page

32 // RED – Danish Investment Atlas 2021

ANNUAL REVIEW

Figure 23: Change in popultation in 2025, 2030, & 2035 by age-group 200,000

RESIDENTIAL

Change in population

150,000

100,000

50,000 52-61-year-olds 0 62-71-year-olds

72-81-year-olds

82+ year-olds

OFFICE

-50,000

-100,000 Source: Statistics Denmark

2025

2035

2030

LOGISTICS

Figure 24: Change in number of moves from 1999 to 2019 40%

20%

RETAIL

10%

-10%

-20% 40 42 years

80 years

Source: Statistics Denmark

HOTEL

Percentage change

30%

Residential // 33

BOLIG – HIGHLIGHT: SENIORBOLIGER RESIDENTIAL – HIGHLIGHT: SENIOR HOUSING A focus on the increasing demand for senior co-housing Demand for community-based forms of housing has risen in recent years and is especially driven by demographic trends. There is great variations in the values and organisation of the community-based forms of housing, from ecovillages with self-builders to the conceptual senior co-housing communities developed by professional operators.

The segment backed by demographic factors senior co-housing communities are the category that has received most attention, and the activity is largely driven by the demographic trend, where the number of senior citizens is increasing significantly. The increase is quite naturally due to the very large post-war generations becoming older. The definition of senior citizens is not fixed, but the group is often divided into 52 to 61-year-olds, 62 to 71-year-olds, 72 to 81-year-olds and those over 82. It is worth noting that the trend is linked to the post-war generations, and that growth in these groups changes over time, with fewer in the group aged 52 to 61 at national level over the next 10-15 years and significantly more in the older age groups ( figure 23, page 33). Naturally, there are variations across municipalities and regions, but the trend is clear and should feature in investors’ analysis of the long-term demand, and in particular where investments are made geographically. It is therefore a matter of finding areas where the long-term re-letting risk is low, and not to work with a building stock that is targeted at a very narrow age group.

Fortsat fra forrige side Continued from previous page

34 // RED – Danish Investment Atlas 2021

Demand for senior co-housing communities is also associated with greater moving activity among senior citizens. The moving activity is greatest for 50 to 75-year-olds and decreases with rising age ( figure 24, page 33). There is naturally greater moving activity as a result of the rising number of citizens in the age groups. However, this also applies when correction is made for the change in the number of people in the age groups. The moving activity has in many cases increased by 25-35% since 1989 for people aged around 55. Increased moving activity is probably linked to senior citizens being more active than in the past and their financial situation being better as a result of them having sound equity and receiving labour-market pensions.

Innovative concepts and many operators as mentioned in the beginning, there are various approaches to establishing community-based housing. The original model is bottom-up, where a number of people join together to create their own project with assistance from external advisers. The opposite model is top-down, where a developer or investor creates a commercial owned or rented housing concept targeted at a particular group of potential residents. There are several operators in the latter model, such as Bovieran, Plushusene and Agorahaverne. In addition to these there are a number of operators whose concept to a greater or lesser degree is targeted at senior citizens, for example Eco-village and AlmenR, but also individual projects run by pension funds, the public housing organisations and local developers throughout the country.

SENIOR MOVING ACTIVITY The Danish Centre for Social Science Research (VIVE) has studied the moving activity of senior citizens. The study shows, for example, that: • 25% of 52 to 62-year-olds are considering moving in the next five years, while the proportion of the 82-97-year-olds is 13%. • 50% of those considering moving want to down-size. • 30% could imagine moving to a senior co-housing community, and interest is greatest among the 52 to 62-year-olds.

Agorahaverne is a co-housing community-based rental concept developed by Tetris. They are geographically located in the larger provincial cities, where there is a solid demographic base for letting. There is a focus on all three elements of sustainability: environmental, social and economic. Agorahaverne have been established in Slagelse and Næstved, and a project is on the way in Holbæk.

ANNUAL REVIEW

Agorahaverne er et fællesskabsbaseret lejeboligkoncept, der udvikles af Tetris� Geografisk er de placeret i de større provinsbyer, hvor der er et solidt demografisk grundlag for udlejningen� Der er fokus på bæredygtighed – både den miljømæssige, sociale og økonomiske del� Der er etableret boliger i Slagelse og Næstved, og der er et projekt på vej i Holbæk�

RESIDENTIAL

AGORAHAVERNE

PLUSHUSENE OFFICE

Plushusene er et co-living koncept skabt af NREP og CASA med et bredere aldersmæssigt fokus� Plushusene-konceptet er baseret på komponenter fra de traditionelle bofællesskaber i kombination med nutidens behov for at have sit eget private rum og med frihed til at leve, som man ønsker� Der forventes opført 10-12 projekter i Danmark med i alt ca� 2�000 boliger i de kommende år� Boligerne vil fortrinsvis bestå af rækkehuse og lejligheder med attraktive fællesfaciliteter og bliver placeret i naturskønne omgivelser i udkanten af de større byer�

LOGISTICS

Plushusene is a co-living concept created by NREP and CASA, with a broader age focus. The Plushusene concept is based on components from the traditional co-housing communities combined with the modern-day need to have one’s own private room and freedom to live as wanted. It is anticipated that 10-12 projects will be implemented in Denmark with a total of around 2,000 homes over the next few years. The concepts will principally consist of terraced houses and apartments with attractive shared facilities and will be located in scenic surroundings on the outskirts of the larger cities.

Bovieran er et nordisk seniorbofællesskabskoncept, hvor 2-3 værelsesboliger indrammer en fælles overdækket vinterhave med forskellige fællesfaciliteter� Der er etableret boliger i Frederiksværk, Frederikssund, Ishøj, Helsingør samt i Hedehusene og med kommende projekter i Solrød og Helsinge�

RETAIL

BOVIERAN

HOTEL

Bovieran is a Nordic senior co-housing community concept where two- to three-room homes surround a covered garden with various shared facilities. These co-housing communities has been established in Frederiksværk, Frederikssund, Ishøj, Helsingør and Hedehusene, and with future projects in Solrød and Helsinge.

Residential // 35

BOLIG – FORVENTNINGER TIL 2021 RESIDENTIAL – EXPECTATIONS FOR 2021 Nybyggeri – stagnerende lejeniveau & større diversitet Efterspørgslen efter lejeboliger i København og de omkringliggende kommuner overstiger fortsat udbuddet� Lejeniveauerne var derfor overordnet set svagt stigende i 2020� I 2021 forventer vi uændrede lejeniveauer� Med vedtagelsen af Københavns Kommuneplan i 2019 blev kravene til boligernes etageareal lempet, hvilket giver mulighed for større diversitet, idet det giver plads til både familier, singler og studerende� I områder hvor huslejen er høj, og efterspørgslen er stor forventer vi derfor at se flere projekter med mindre boliger i 2021� Vi forventer desuden at se en udvikling af blandede boligformer, der vil skabe social bæredygtighed gennem øget fokus på bofællesskaber� Stærkt ejerboligmarked Uagtet covid-19 er ejerlejlighedspriserne steget i København i 2020� Ved udgangen af 2020 var der et historisk lavt udbud af ejerlejligheder, som faldt yderligere ved indgangen til 2021� Vi forventer fortsat at se stigende ejerlejlighedspriser i 2021, forudsat det nuværende renteniveau samt at der ikke kommer yderligere regeringsindgreb eller stramninger i den finansielle sektor�

RED INVESTOR SURVEY Investorerne forventer uændrede afkast Investorerne forventer uændrede afkast Sammenligner man med 2020 understreger RED Investor Survey 2021, at flere investorer fortsat ser positivt på boligsegmentet, idet en større andel forventer uændrede afkast, færre forventer stigende afkast og omtrent samme andel forventer faldende afkast ( figur 25)� I de seneste år har vi set et øget fokus på bæredygtighed i byggeriet, hvilket vi forventer vil fortsætte i 2021� Dette forventes at ses i form af et større fokus på, at nybyggeri er DGNB-certificeret samt et større fokus på alternative byggematerialer, der reducerer CO2 udledningen� Denne forventning understøttes af, at hele 94% af investorerne svarer, at de overvejer bæredygtighedscertificering, når de investerer i ejendomme ( figur 26)�

FORVENTNINGER TIL 2021 I 2021 vil der vil fortsat blive opført mange nye boliger i København� I takt med at de etablerede udviklingsområder som Nordhavnen, Amager Strand og Ørestad bliver

færdiggjorte, vil udviklingen rykke til nye områder, herunder Jernbanebyen, Kløvermarken og Grønttorvet� I Storkøbenhavn forventes det særligt at være udviklingsmulighederne langs Letbanen, Kystbanen og S-togslinjerne, der vil være i fokus� Flere byggerier langs Letbanen står færdige i 2021, og i takt med at flere projekter færdiggøres, forventes der at komme et midlertidig pres på huslejen� Der forventes fortsat at være særlig stor efterspørgsel efter de mindre lejeboliger i København og Storkøbenhavn i 2021, hvorfor vi fortsat forventer at se flere projekter med mindre boliger� Søgningen mod lejeboliger fremfor ejerboliger forstærkes fortsat af de restriktive udlånsregler, der blev indført i 2016� Med det nuværende rente- og efterspørgselsniveau forventes det, at afkastkravene for ejendomme, som allerede er i drift samt for ejendomme beliggende centralt i København vil være svagt faldende i 2021� For ejendomme med sekundære beliggenheder forventes afkastkravene uændrede� Grundet usikkerheder på markedet samt en fortsat høj efterspørgsel forventer vi, at boligsegmentet igen i 2021 vil blive det største segment�

Figure 25: Investor Confidence Index – Residential yields

Figure 26: Investor Confidence Index – Sustainability Classification

With regard to the development of initial yields for residential properties during the coming six months, market yields will:

Do you consider sustainability classification when investing in real estate?

100%

100% 3%

13%

Increase Remain stable Decline

6% Yes, but not of importance 38%

Yes, but we do not have a formal approach to it

67% 55%

Yes, it is part of our formalized investor prerequisite

50% 32%

30%

Q1 2020

Q1 2021

36 // RED – Danish Investment Atlas 2021

Q1 2021

In recent years we have seen an increased focus on sustainability in construction, which we expect to continue in 2021. This is expected to be seen through a greater focus on new construction with Green Building Council Denmark (DGNB) certification and on alternative building materials that reduce CO2 emissions. This expectation is supported by as many as 94% of investors replying that they consider sustainability certification when investing in properties ( figure 26).

EXPECTATIONS FOR 2021 In 2021 many new homes will continue to be built in Copenhagen. As the established development areas such Nordhavnen, Amager Strand and Ørestad are completed, development will move on to new areas, including Jernbanebyen, Kløvermarken and Grønttorvet, as well as conversion of warehouse and industrial areas in the north-west

There is expected to be a continued strong demand for rental housing in Copenhagen and Greater Copenhagen in 2021, particularly for smaller homes. Consequently, we expect to see more projects with smaller homes. Interest in rental housing rather than owner-occupied housing is continuing to be reinforced by the restrictive rules on lending introduced by the Danish Financial Supervisory Authority in 2016. With the current level of interest rates and demand, it is expected that yield requirements will be slightly decreasing in 2021. This is expected to apply in particular to properties already in use and to properties located outside central Copenhagen. Yield requirements for secondary locations are expected to be unchanged in 2021.

ANNUAL REVIEW

Due to uncertainty in the market and continued high demand, we expect residential properties to again be the most traded asset class in 2021.

LOGISTICS

Strong owner-occupied housing market Despite covid-19, prices for owner- occupied apartments increased in Copenhagen in 2020. At the end of 2020 there was a historically low supply of owner-occupied apartments, which fell further at the start of 2021. We expect to continue to see rising prices for owner-occupied apartments in 2021, provided that the interest rates stay at their current level and that there are no further government interventions or tightening in the financial sector.

Investors expect unchanged yield RED conducts a survey of the largest and most active investors in Denmark twice a year. The 2021 survey highlights that the investors remain positive, as a greater proportion expects unchanged yields, fewer expects yields to increase and approx. the same proportion expects yields to decline ( figure 25).

part of Copenhagen. In Greater Copenhagen there are expected to be development opportunities in particular along the routes of Copenhagen Light Rail, the Coastal Line, and the S-train lines. Several construction projects along the route of Copenhagen Light Rail will be finished in 2021, and as more projects are completed we expect a temporary pressure on rent levels.

RESIDENTIAL

When the Copenhagen Municipal Plan was adopted in 2019, the requirements for total floor space for housing were eased. This opportunity results in a greater diversity as it opens up for families, singles, and students. We expect to see more projects with smaller homes in 2021, particularly in areas where the rent levels are high and the demand is strong. We also expect to see a trend towards mixed forms of housing, which will create social sustainability through an increased focus on co-housing.

RED INVESTOR SURVEY

OFFICE

New construction – stagnating rent levels and greater diversity Demand for rental housing in Copenhagen and surrounding municipalities continues to exceed supply. Therefore, rent levels overall increased slightly in 2020. We expect unchanged rent levels in 2021.

The Cushman & Wakefield | RED Investor Confidence Index

RETAIL

The index for Denmark includes responses from 33 of the most active investors in Denmark in the years 2020 and 2021. The index monitors the expectations from highly active investors in the Danish CRE market for the next six months. The broad coverage reflects the interest for non-biased objective analysis and increased transparency. Furthermore, the coverage ensures that the findings are representative reflections of the current investor confidence in the Danish CRE market.

HOTEL

We conduct the survey on a biannual basis, allowing us to track changes and interpret what they mean for the market and how to best respond when making investment decisions. Residential // 37

BOLIG – TRANSAKTIONER & NØGLETAL RESIDENTIAL – TRANSACTIONS & KEY FIGURES Residential – Top 30 transactions 2020 Asset name

Area

Date

Size (m²)

Price (DKK)

Niam Portfolio

Across Nation

Project Vortex

Birch Ejendomme Portfolio

December

594,000

11,300,000,000

Across Nation

November

50,928

1,815,000,000* Velliv & Industriens Pension NREP

Across Jutland

December

70,000

1,500,000,000* Goldman Sachs

Birch Ejendomme

Kirkebjerg

Brøndby

September

37,440

Capman Real Estate 1,077,000,000* (Bayerische Versorgungskammers)

Casa

SF Management Portfolio

Across Nation

July

1,000,000,000* Axa Investment Managers

SF Management

A-House

Copenhagen S

November

31,009

970,000,000* Highbrook Investors

A-House TopCo

Amager Strandvej Portfolio

Copenhagen S

May

13,511

500,000,000* Europa Capital

Geﬁon Group

Conﬁdential

Risskov

November

15,035

500,000,000

Conﬁdential

Egegårdsvej 76

Rødovre

April

14,268

485,112,000* Heimstaden

Rødovregrunden 2018

Tirsbæk bakker

Vejle E

March

23,000

480,000,000* Niam

Omnia Invest

Conﬁdential

Investor

Vendor

Heimstaden

Niam

Koncenton

Enghaven Risskov

Risskov

May

17,752

467,500,000* Heimstaden

Konstruct

Nordbjerget

Aarhus N

September

13,282

464,870,000* Private Investor

Eriksen Group

PH Park

Hørsholm

September

14,000

450,000,000* Sampension

Calum

Kirkebjerg

Brøndby

May

16,500

445,500,000* Tristan Capital Partners

Casa

Vogterhus

Odense C

December

24,865

440,000,000*

Trikotageparken

Copenhagen E

April

10,508

400,000,000* Hines

Bonava

Conﬁdential

Glostrup

November

14,000

395,000,000

Conﬁdential

Aberdeen Standard Investments

Koncenton

NREP & Reitan

Telegrafvej 7b

Ballerup

December

11,000

350,000,000* NREP

2e group

Borggade 4A

Aarhus C

July

12,966

347,200,000* Pensam

Ejendomsselskab

Nørrebrogade 155-159

Copenhagen N

November

11,729

340,000,000* Coop Danmark

NØRREBRO 2019

Kirkebjerg Have

Brøndby

July

12,250

340,000,000* Core Bolig

Svanen Gruppen

Fasanrækkerne

Copenhagen S

December

9,234

332,424,000* NREP

Bonava

Bygården & Store Torv

Brønshøj

May

21,501

301,019,600* NREP

Innovater

Egedal Stationsby

Stenløse

February

10,864

300,000,000

2E Group

Teglværkskvarteret

Hedehusene

April

11,099

295,000,000* NREP

Calum

Kanalhuset

Copenhagen S

December

286,000,000* Formuepleje Ejendomme

Private investor

Conﬁdential

Horsens

April

277,000,000

Conﬁdential

Finsensvej 78 & Dirch Passers Allé 2

Frederiksberg

January

6,440

275,000,000* Capman Real Estate

MT Højgaard

Nygårdsvej 32

Copenhagen E

December

9,234

271,375,000

Commercial Real Estate Denmark

Skejbyen

Risskov

May

9,713

267,107,500* Industriens Pension

*Estimated price 38 // RED – Danish Investment Atlas 2021

8,325 15,000

NREP

Koncenton

Pensam

P/S PKAE Ejendom

ANNUAL REVIEW LOGISTICS

OFFICE

RESIDENTIAL

Skyttegade 18 – a rent-controlled property sold by RED in 2020.

Subarea

Rent level (DKK)

Yield*

Copenhagen City

2,000 - 2,200

3.25%

Copenhagen E, W & N

1,800 - 2,000

3.50%

Copenhagen NW

1,500 - 1,700

4.00%

Copenhagen S

1,700 - 1,900

3.50%

Frederiksberg

2,000 - 2,200

3.50%

North Harbour

1,900 - 2,100

3.25%

South Harbour

1,600 - 1,800

3.75%

Valby

1,700 - 1,900

3.50%

Vanløse

1,500 - 1,700

3.75%

RETAIL

Residential – Prime market rent and yield levels Q1 2021

* In case of share transactions, thís will impact yields due to deferred taxes

HOTEL

Source: C&W | RED

Residential // 39

RED assists MT Højgaard A/S with the letting of the modern and sustainable office domicile at Knud Højgaards Vej 7 in Søborg.

ANNUAL REVIEW RESIDENTIAL

KONTOR OFFICE Investeringsmarkedet 2020 // Investment Market 2020

Volumen & investorer 2020 // Volume & Investors 2020

OFFICE

Top 5 transaktioner 2020 // Top 5 Transactions 2020

Highlight: Lejemarkedet // Highlight: Occupier Market

Highlight: Afkastspænd // Highlight: Yield Spread

Forventninger til 2021 // Expectations for 2021

RETAIL

LOGISTICS

Transaktioner & nøgletal // Transactions & Key Figures

HOTEL

42 44 46 48 50 52 54

Office // 41

KONTOR – INVESTERINGSMARKEDET 2020 OFFICE – INVESTMENT MARKET 2020 Markant fald i investeringsvolumen I modsætning til de seneste fire år, hvor der kun var marginale udsving i transaktionsvolumen, faldt investeringer i kontorejendomme i 2020 med hele 40% til 11,0 mia� kr� ( figur 28)� Til trods for at kontorsegmentets andel af den samlede volumen i 2020 blev halveret fra 30% i 2019 til 15% i 2020, udgjorde segmentet dog fortsat det andet største ejendomssegment� Med investeringer for 7,0 mia� kr� svarende til 63% af den samlede volumen tog de danske investorer i 2020 pladsen som de mest aktive investorer tilbage fra de udenlandske investorer, som dominerede kontormarkedet i 2019� Mangel på københavnske ejendomme Hverken faldet i transaktionsvolumen eller faldet i de udenlandske investorers andel skyldes dog en faldende efterspørgsel efter kontorejendomme, men derimod et yderst begrænset udbud af attraktive kontorejendomme beliggende i København� Usikkerheder på markedet fik investorerne til at søge mod de mest sikre aktiver, som er

prime kontorer i det centrale København, og derfor medførte et manglende udbud også en faldende aktivitet� Til trods for en faldende aktivitet fastholdt kontorinvesteringer i København en andel på hele 70% af den samlede kontorvolumen i 2020 ( figur 29)� Særligt de udenlandske investorer efterspurgte de københavnske ejendomme, som udgjorde hele 91% af deres investeringer i 2020� Kontormarkedet udenfor det centrale København var væsentligt mindre likvidt i 2020, og som konsekvens oplevede vi historisk store prisforskelle mellem kontorer beliggende centralt i København og kontorer beliggende i omegnskommunerne�

Figure 27: Office – Investor type breakdown 2020

OFFICE VOLUME IN TOTAL

11.0 BN DKK

Sharp drop in investment volume In contrast to the previous four years, in which there was only marginal variations in the transaction volume, investments in office properties fell by as much as 40% in 2020 to DKK 11.0bn ( figure 28). However, despite the office segment share of total volume in 2020 being halved from 30% in 2019 to 15% in 2020, it continued to be the second largest property segment. With investments totalling DKK 7.0bn, equivalent to 63% of the total volume, the Danish investors regained their position as the most active in 2020, while foreign investors dominated the office market in 2019.

Shortage of properties in Copenhagen However, neither the decrease in the transaction volume nor the decrease in the share of foreign investors was due to a drop in

42 // RED – Danish Investment Atlas 2021

Institutionelle investorer var de mest aktive Tendensen fra de seneste år, hvor de institutionelle investorer har taget andele fra ejendomsselskaberne, fortsatte i 2020� Dette betød, at de institutionelle investorer, med en andel på 34% af den samlede transaktionsvolumen, overtog pladsen som den mest aktive investortype i 2020 ( figur 27)� Denne stigning skal ses i lyset af den tyske pensionskasses Ärzteversorgung Westfalen-Lippe køb af Danske Banks hovedkontor til ca� 2,1 mia� kr�, som udgjorde mere end halvdelen af de institutionelle investorers samlede investeringer i 2020�

demand for office properties, but instead an extremely limited supply of attractive office properties located in Copenhagen. Uncertainties in the market caused the investors to seek the safest assets, prime offices in central Copenhagen, and there the lack of supply also led to a decline in the activity. Despite declining activity, office investments in Copenhagen maintained a share of 70% of the total office volume in 2020 ( figure 29). Particularly, the foreign investors demanded Copenhagen properties, which accounted for no less than 91% of their investments in 2020. The office market outside central Copenhagen was substantially less liquid in 2020, and we consequently experienced historically wide price differentials between offices located in central Copenhagen and offices located in surrounding municipalities.

Institutional investor 34% Real estate company 27% Property fund 18% Private investor 14% Other 7%

Institutional investors were the most active The trend seen in recent years where institutional investors have taken shares from the real estate companies continued in 2020. As a result, institutional investors took over as the most active investor type with a share of 34% of total transaction volume in 2020 ( figure 27). This increase must be viewed in the context of the German pension fund Ärzteversorgung Westfalen-Lippe’s acquisition of Danske Bank’s headquarters for around DKK 2.1bn, which accounted for more than half of the total investments made by institutional investors in 2020.

ANNUAL REVIEW

Figure 28: Office – Transaction volume 2012-2020 20

19.2

18.3

18.7

18.4

RESIDENTIAL

15.5 15

46% 58% 64%

67% 11.0

73% 7.6

63% 87%

5.3

54%

5 42%

93%

36%

93%

33%

27%

37%

OFFICE

BN DKK

11.4

13%

0 2012

2013

2014

2015

2016

Source: C&W | RED

2017

Danish

2018

2019

2020

Foreign

LOGISTICS

Figure 29: Office – Historic geographic breakdown 2018-2020 15

12 32%

59%

RETAIL

49% 68% 3

53% 77%

51%

41%

47% 0 2018

2019

2020

COPENHAGEN Source: C&W | RED

2018

100%

64% 36% 2019

76% 75%

2020

GREATER COPENHAGEN Danish

2018

2019 AARHUS

87%

95%

2019

2020

24% 2020

2018

REST OF DENMARK

Foreign

HOTEL

BN DKK

Office // 43

11.0

70%

0.5 BN DKK

BN DKK

GREATER COPENHAGEN Danish 63% Foreign 37% GREATER COPENHAGEN

KONTOR0.5 – VOLUMEN & INVESTORER 2020 Danish 63%

BN DKK

37% 5% OFFICE – VOLUME &Foreign INVESTORS 2020

1.0 BN DKK

OTHER ZEALAND Danish 100% Foreign 0% OTHER ZEALAND

1.0

Danish 100%

BN DKK

Foreign 0%

0.2 BN DKK

7.8 BN DKK

Foreign 48%

Danish 84%

70%

Foreign 16%

BN DKK

11.0

Foreign

GREATER COPENHAGEN

0.5

AARHUS

Danish 63%

Danish 100% BN DKK

Foreign 37%

Foreign 0% 5%

7.8

OTHER ZEALAND

1.0

Danish 100%

BN DKK

AARHUS

70%

Foreign 0%

JUTLAND

1.0 BN DKK

0.2 BN DKK

7.8 7.8

Danish 52% BN DKK

BN DKK 48% Foreign

70% 70%

0.5 BN DKK

GREATER COPENHAGEN

0.5 0.5

Danish 63% BN DKK

BN DKK 37% Foreign

5% 5%

Foreign 10%

0.2

Danish 90%BN DKK Foreign 10% 2%

BN DKK

11%

0.3 BN DKK

FUNEN

Foreign 0%

0.3 BN DKK

FUNEN

1.0 BN DKK

ZEALAND OTHER ZEALAND OTHER OTHER ZEALAND Danish 100% Danish 100% Danish 100% BN DKK Foreign 0% BN DKK 0% Foreign Foreign 0%

1.0 1.0 9% 9%

AARHUS Danish 100% Foreign 0%

0.2 BN DKK

2% 44 // RED – Danish Investment Atlas 2021

COPENHAGEN

Foreign 16%

AARHUS Danish 100%

GREATER GREATER COPENHAGEN COPENHAGEN Danish 63% Danish 63% Foreign 37% Foreign 37%

ZEALAND

Danish 84%

FUNEN

0.2 0.2

Danish 84% BN DKK

BN DKK 16% Foreign

2% 2%

OFF VOLUME

BN D

GREATER COPENHAGEN

Foreign 0%

Danish 84%

OTHER JUTLAND

COPENHAGEN COPENHAGEN Danish 52% Danish 52% Foreign 48% Foreign 48%

Danish 100%

Foreign 16%

Danish 90%

COPENHAGEN

OTHER ZEALAND

FUNEN

OTHER JUTLAND

1.2

Danish 6

BN DKK

Foreign 0%

11%

Foreign 37% OFFICE VOLUME IN TOTAL

Foreign 37%

Danish 100%

BN DKK

Foreign 48%

Danish 63%

AARHUS

0.3

1.2

Danish 52%

Foreign 16% 70% GREATER COPENHAGEN

0.5

BN DKK

AALBORG COPENHAGEN

Danish 84%BN DKK

7.8

FUNEN

BN DKK

11.0

Danish 52%

FUNEN

0.2 0.3

OFFICE VOLUME IN TOTAL

COPENHAGEN

FUNEN FUNEN Danish 84% Source: C&W |84% RED Danish Foreign 16% Foreign 16%

Årets eneste milliardhandel blev gennemført af den tyske pensionskasse Ärzteversorgung Westfalen-Lippe, der med deres køb Danske Banks hovedkontor til ca. 2,1 mia. kr. blev årets største investor.

ANNUAL REVIEW

Figure 30: Office transactions (BN DKK) Area

2019

Copenhagen

2020

Change

12.7

7.8

-39%

Greater Copenhagen

2.1

0.5

-75%

Other Zealand

1.1

1.0

-5%

Aarhus

1.1

0.3

-72%

Other Jutland & Funen

1.4

18.4

11.0

-40%

Total

RESIDENTIAL

Lavere aktivitet blandt de udenlandske investorer Det begrænsede udbud af attraktive kontorejendomme medførte både en lavere transaktionsvolumen og en lavere aktivitet blandt de største investorer i 2020. Sammenligner man de fem største investorers aktivitet i 2020 med 2019 faldt deres samlede investeringer fra 7,9 mia. kr. til 5,0 mia. kr. Dette er uagtet, at både deres andel af den samlede volumen (46% i 2020 mod 43% i 2019) og antallet af transaktioner (14 i 2020 mod 15 i 2019) mere eller mindre var uændret. Samtlige af de fem største investorers investeringer i 2020 var i københavnske kontorejendomme. Dette bidrog til, at København nåede en andel på 70% af den samlede volumen og dermed igen var det marked med den klart højeste aktivitet.

OFFICE

Lower activity amongst the largest investors The limited supply of attractive properties led to both a lower transaction volume and a lower activity among the largest investors in 2020. Comparing the actively level of the five largest investors in 2020 with 2019, their total investments decreased from DKK 7.9bn to DKK 5.0bn. This was despite the fact that both their share of total volume (46% in 2020 against 43% in 2019) and the number of transactions (14 in 2020 against 15 in 2019) being more or less unchanged. In 2020 all of the investments made by the five largest investors were in Copenhagen office properties. This contributed to Copenhagen’s share reaching 70% of the total volume and consequently it was again the market with the by far highest level of activity.

LOGISTICS

The sole billion kroner transaction of the year was made by the German pension fund Ärzteversorgung Westfalen-Lippe who, with their acquisition of Danske Bank’s headquarters for around DKK 2.1bn, became the largest investor of the year.

Figure 31: Office – Top 5 investors 2020 Investor

Origin Volume (M DKK)

No. of transactions

Ärzteversorgung Westfalen-Lippe

2,100

Jeudan

1,057

Hines

700

Pensam

592

Schroder Real Estate

580

RETAIL

Source: C&W | RED

Figure 32: Office – Top 5 investors 2012-2020 Investor

Origin Volume (M DKK)

No. of transactions

Niam

7,138

PensionDanmark

6,885

Jeudan

6,211

PFA Ejendomme

5,410

Klövern

4,386

HOTEL

Source: C&W | RED

Office // 45

KONTOR – TOP 5 TRANSAKTIONER 2020 OFFICE – TOP 5 TRANSACTIONS 2020 Photo: News Øresund

1. DANSKE BANK HQ The largest office transaction of the year was announced in April 2020 when the German pension fund Ärzteversorgung Westfalen-Lippe acquired Danske Bank’s headquarters in Copenhagen. The property comprises of 48,094 m² located across 15 buildings in the attractive Kongens Nytorv area in the city center of Copenhagen. In 2023 Danske Bank will vacate the property and afterwards it will be fully transformed by Thylander Gruppen. The property was acquired from Aberdeen Standard Investments at a price of approx. DKK 2.1 bn.

Est. price (DKK):

2,100,000,000 Size (m2):

48,094

Investor:

Ärzteversorgung Westfalen-Lippe Vendor:

Aberdeen Standard Investments

Photo: Design Group Architects

2. PORTLAND TOWERS Hines, the international real estate investor, acquired the iconic office building Portland Towers in the attractive North Harbour area in Copenhagen in October 2020. The property was acquired from three Danish pension funds; ATP, PFA and PensionDenmark at a price of DKK 700 m. Portland Towers consists of two former silos, which were converted into offices in 2014. The property if fully let and has a total area of 13,749 m² of which 1,730 m² are secondary areas.

Price (DKK):

Investor:

700,000,000

Hines

Size (m2):

13,749

46 // RED – Danish Investment Atlas 2021

Vendor:

ATP, PensionDanmark & PFA

ANNUAL REVIEW In July 2020, the two pension companies Velliv and Industriens Pension made an estimated investment of DKK 600 m in a new domicile for the law firm Accura at Trælastholmen in the North Harbour area in Copenhagen. When the property is completed in the second half of 2022, Accura will move in on a lease with 10 years of non-termination. The property will have a total area of 13,180 located across five floors with an associated parking basement.

Size (m2):

13,180

Velliv & Industriens Pension Vendor:

Project North Holding Partnerselskab

Photo: Byens Ejendom

4. GL. KØGE LANDEVEJ 39 & 45

Est. price (DKK):

Investor:

580,000,000

Schroder Real Estate

Size (m2):

Vendor:

32,213

P+

LOGISTICS

Schroders made their second acquisition in Denmark in September 2020 when they bought a portfolio of two office properties located in Valby with a total area of 32,213 m² and 302 associated parking spaces. The two buildings were erected in 1988-1990 and fully refurbished in 2019. The properties are fully let on long lease contracts to the municipality of Copenhagen and the parking company Apcoa. The portfolio was acquired at an estimated price of DKK 580 m.

Photo: Byens Ejendom

5. PROJECT SAXO

Investor:

460,000,000

Jeudan

Size (m2):

Vendor:

14,917

LB Forsikring

HOTEL

In August 2020, the insurance company LB Forsikring sold a portfolio of six domicile office properties as they gathered all of their 800 employees in their new headquarter at Amerika Plads instead of having them located at different addresses in CBD, as was the case before the move. The portfolio was acquired by the largest listed real estate company in Denmark, Jeudan, at a price of DKK 460 m. The six properties are all located in the city center of Copenhagen and has a total area of 14,917 m².

Price (DKK):

OFFICE

600,000,000

Investor:

RETAIL

Est. price (DKK):

RESIDENTIAL

Photo: Danielsen Architecture

3. ACCURA HQ

Office // 47

KONTOR – HIGHLIGHT: LEJEMARKEDET OFFICE – HIGHLIGHT: OCCUPIER MARKET Flere forhold vil udfordre kontorudlejerne i de kommende år 2020 – et anderledes år Med mange kontorudlejninger og en stor efterspørgsel i det centrale København levede årets første måneder op til forventningerne� Covid-19 restriktionerne i marts sendte aktiekurserne i et spontant, men kortvarigt dyk, det samme gjorde antallet af kontorudlejninger� Det tidlige forår bragte os hurtigt tilbage på sporet, og aktivitetsniveauet blev højt resten af året� Danske virksomheder mest beslutningsdygtige Gennem 2020 så vi en tydelig trend, hvor de mest beslutningsdygtige virksomheder var dem med dansk ejerskab� De større virksomheder med udenlandske ejere var længere om at træffe beslutninger, og flere udsatte flytteplanerne, indtil pandemiens langsigtede påvirkninger er afklaret� Mange oplevede store forandringer i måden at arbejde på i 2020, hvilket også førte til ændringer i behovet for kontorarealer� Flere arbejder fra hjemmekontorer, afstandskravene i storrumskontorer øges og møder afholdes virtuelt, men firmakulturen, loyaliteten og fællesskabet skal fortsat dyrkes� Vi ser derfor mange spændende og relevante

Several conditions will challenge the landlords in the coming years 2020 – a different year With many office lettings and strong demand in central Copenhagen, the first months of the year lived up to the expectations. The covid19 restrictions in March sent share prices into a spontaneous but brief plunge, and with it went the number of office lettings. The early spring quickly put us back on track, and the activity was high for the rest of the year. Danish businesses the most decisive Throughout 2020 we experienced a clear trend where the most decisive businesses

48 // RED – Danish Investment Atlas 2021

drøftelser med kontorlejere angående indretningen� Dette kommer til at have en stor betydning både nu og fremadrettet�

væsentlige ombygninger og dermed vente mere end 6-8 måneder på at flytte�

Mange store kontorlejere flytter I København er en del nybyggerier til kontorer i eksempelvis Nordhavn, Postgrunden, Kalvebod Brygge og Carlsberg Byen ved at være tæt på færdigbygget� Indenfor de kommende år vil en lang række store arbejdspladser derfor flytte til nye kontorer i disse områder, heriblandt fire store advokatfirmaer, Østre Landsret, Danske Bank, DFDS, Nykredit, SAS Institute, KAB, Ferring, Genmab, Visma og AP Pension�

Uagtet at udbuddet af kontorer og dermed tomgangen i det centrale København vil være stigende, er det ikke vores forventning at se et nedadgående pres på lejeniveauet i 2021� For at tiltrække og fastholde veluddannede medarbejdere, som bor i Københavnsområdet, finder lejerne det fortsat nødvendigt med en bynær placering tæt på offentlig transport� Dette betyder, at den høje efterspørgsel efter centralt beliggende kontorer vil fortsætte i 2021, hvilket vil holde hånden under lejeniveauet�

Udbuddet stiger i 2021 2021 vil derfor byde på et betydeligt udbud af større lidt ældre domicilejendomme på meget centrale beliggenheder med kapitalstærke og erfarne udlejere� Blandt de kontorejendomme som bliver ledige, er der ikke mange oplagte konverteringsmuligheder til boliger, og med den nuværende kriseramte servicebranche vil vi næppe se konverteringer til hotelanvendelse de kommende par år� Udlejerne skal derfor konkurrere om de nye lejere ved at ombygge de ældre domiciler til moderne og fleksible flerbrugerejendomme� Vinderne i denne tid med et stigende udbud bliver derfor dem, som har mod på at igangsætte ombygninger – også uden nye lejere� Dette skyldes, at det er de færreste lejere, der har tålmodighed til at vente på

Større krav til fleksibilitet I forhold til tidligere er den store forskel, at de mindre og mellemstore lejere ikke længere accepterer ”domicilkontrakter” med lange bindingsperioder, som mange udlejere ellers har været begunstiget af før� I dag ser vi, at lejerne stiller større krav til fleksibilitet i form af relativt korte bindingsperioder, break options før bindingsperiodens ophør, fremlejeret og afståelsesret� Det større krav til fleksibilitet skyldes typisk lejernes vækstplaner, hvilket medfører en risiko for, at de vokser ud af deres lejemål før bindingsperiodens ophør� Fremadrettet må udlejerne derfor se ind i et kontorlejemarked med kortere bindinger i de store flerbrugerejendomme, men til gengæld også en større risikospredning i forhold til at satse på én stor lejer�

were the ones with Danish ownership. The larger businesses with foreign ownership was slower in making decisions, and several postponed their plans to move until the long-term impact of the pandemic has become clear.

Many large office tenants are moving In Copenhagen, a number of new office developments are close to completion, for example in Nordhavn, Postgrunden, Kalvebod Brygge and Carlsberg Byen. Consequently, a number of large companies will be moving to new offices in these areas over the next few years, among them being four large law firms, Østre Landsret, Danske Bank, DFDS, Nykredit, SAS Institute, KAB, Ferring, Genmab, Visma, and AP Pension.

Many experienced great changes in the way they work in 2020, which also led to changes in the need for office space. More people are working from home, requirements for social distancing in open-plan offices are becoming stricter and meetings are being held virtually, but corporate culture, loyalty and community still need to be cultivated. Therefore, we are seeing exciting and focused discussions with office tenants about the interior. This will be of great significance both now and in the future.

Increasing supply in 2021 As a result, 2021 will offer a significant supply of larger, slightly older domicile properties in very central locations with financially strong and experienced landlords. Among the office properties becoming vacant

ANNUAL REVIEW Despite the fact that the both the supply of offices and the vacancy rates in central Copenhagen will increase, we do not expect to see a downward pressure on the rent levels in 2021. To attract and retain highly educated staff who live in the Copenhagen area, tenants continue to need a location near the city and close to public transport. This means that the demand for centrally located offices will remain high in 2021, which will support the rent levels.

The winners in this time of increasing supply are thus the ones who have the courage to start conversions – even without new tenants. This is due to the fact that very few tenants are patient enough to wait for major conversions and thereby to wait more than six to eight months to move.

OFFICE

Greater demand for flexibility The great difference now is that small and medium-sized tenants no longer accept ‘domicile-contracts’ with long non-termination

periods, which have previously benefited many of the landlords. Today the tenants demand greater flexibility in the form of relatively short non-termination periods, break options before the end of the non-termination period, right to sub-let and right to assign. The greater demand for flexibility is typically due to the tenants’ plans for growth, which pose a risk of them outgrowing their premises before the non-termination period comes to an end. In the future, landlords will therefore have to anticipate an office occupier market with shorter non-termination periods in the large multi-user properties, but also a greater spread of risk in terms of not committing to one large tenant.

RESIDENTIAL

there are few obvious opportunities for conversion to residential use, and with the service sector now in crisis we are unlikely to see conversions for hotel use over the next few years. The landlords therefore have to compete for new tenants by converting the older domiciles to modern and flexible multiuser properties.

3 8

5 7

1 6

CBD – City center & Christianshavn

1,950

Kalvebod Brygge

1,700

North Harbour & Amerika Plads

1,950

Frederiksberg

1,450

Copenhagen E

1,500

Copenhagen W & Carlsberg Byen

1,600

Copenhagen N

1,300

Copenhagen NW

1,200

Islands Brygge

1,450

Ørestad

1,500

South Harbour

1,300

Valby

1,350

Amager East & Copenhagen Airport

1,425

Tuborg Harbour

1,700

Kongens Lyngby

1,450

Ring 3

1,100

* Excl. service charges

LOGISTICS

Source: C&W | RED

HOTEL

Base rent (DKK)*

RETAIL

Subarea

Office // 49

KONTOR – HIGHLIGHT: AFKASTSPÆND OFFICE – HIGHLIGHT: YIELD SPREAD Stigende afstand mellem afkastet på kontorejendomme i København og omegnskommunerne 90% af kapitalen jagter 10% af ejendommene I 2020 var investorernes appetit på kontorejendomme igen stor, og vi var derfor igen vidne til rekordlave afkastniveauer� Bagsiden af medaljen er, at 90% af kapitalen jagter de samme ejendomme i København og til dels i de 2-3 næststørste byer, hvorimod interessen for kontorejendomme udenfor de største byer er yderst begrænset� Vi var derfor vidne til et historisk stort spænd mellem salgspriserne for kontorer i det centrale København og de mere sekundært beliggende ejendomme i 2020� Hvor der i det centrale København blev handlet kontorejendomme til kvadratmeterpriser på over 50�000 kr� pr� m², så var en kontorejendom beliggende blot 15 km fra det centrale København svær omsættelig og blev udbudt helt ned til 5�000-10�000 kr� pr� m²� Prisniveauet var således 5-10 gange så højt i det centrale København�

Historisk lave afkast I takt med en stigende interesse fra udenlandske investorer, har vi oplevet et markant fald i afkastniveauet for prime kontorejendomme i København fra ca� 4,5% i 2015 til 3,5% i 2020 ( figur 33)� I samme periode er afkastet på prime boligejendomme også reduceret, dog ikke i samme grad, hvorfor prime kontorejendomme i København nu handles til lavere afkast end boliger� Man kan dog sætte spørgsmålstegn ved rationalet bag denne udvikling, når udgifterne til tomgang, genudlejning og ombygning til nye lejere i kontorer er væsentlig højere end for boliger� Forventning om stigende lejeniveauer De lave 1� års afkast på kontorejendomme i København CBD, og det store spændt mellem salgspriserne i København og omegnskommunerne, skal ses i lyset af den udvikling, som København har været gennem i de seneste årtier� København CBD er efterhånden fuldt udbygget, og en udvidelse af kontorudbuddet sker nu i en 5-6 kilometers radius omkring det centrale København eksempelvis i Ørestad, Nordhavnen, Godsbanearealet og Sydhavnen�

Som konsekvens heraf er der en forventning om, at lejeniveauet i CBD i de kommende 5-10 år vil stige procentuelt mere end de kontorer, som er beliggende i omegnskommunerne og i de områder, hvor der fortsat kan tilføres nybyggeri� Dette betyder, at selvom investorer i dag køber prime kontorejendomme til skarpe afkast, så er forventningen, at deres investeringer generer fornuftige totalafkast over investeringsperioden henset til forventningen om stigende lejeniveauer i CBD� Begrænset spekulativt byggeri På trods af et år præget af covid-19 har vi været vidne til et kontormarked, der har vist sig modstandsdygtig og med en begrænset stigning i tomgangen� Ofte bliver der i slutningen af et økonomisk opsving – hvor tomgangen er lav og lejen høj – igangsat meget spekulativt byggeri, hvilket påvirker markedet negativt� I København er der aktuelt ni helt eller delvist spekulative byggerier igangsat med et samlet areal på ca� 260�000 m², hvoraf ca� 56% er forhåndsudlejet ( figur 34)� Markedet bliver således ikke oversvømmet med nye kontorejendomme i 2021� Det er derfor vores vurdering, at kontorlejemål i København vil klare sig godt i 2021, trods en forventning om en stigende tomgang�

Figure 33: Development in office and residential yield 2015-2020 5.25% 5.00% 4.75% 4.50% 4.25% 4.00% 3.75% 3,50% 3.25% 3.00% 2.75% 2015

2016

2017

2018 Office

50 // RED – Danish Investment Atlas 2021

Residential

2019

2020

Historically low yields Followed by an increasing interest from foreign investors, we have experienced

As a consequence it is expected that rent levels in CBD over the next 5-10 years will increase more (in percentage terms) than the

This means that although investors today are buying prime office properties at low yields, it is anticipated that their investments will generate reasonable total yields over the investment period given the expectation of increasing rent levels in CBD.

Limited speculative construction Despite a year dominated by covid-19, the office market has been particularly resilient, with a limited increase in the vacancy rates. The end of an economic upturn, where vacancy rates are low and rent levels are high, has often led to much speculative construction, which consequently has a negative impact on the market. In Copenhagen, nine wholly or partially speculative construction projects have so far been launched with combined floor space of 260,000 m² of which approx. 56% has been pre-let ( figure 34). The office market will thus not be flooded with office properties in 2021, and we anticipate that office leases in Copenhagen will do well in 2021 despite an expectation of rising vacancy rates.

RESIDENTIAL

ANNUAL REVIEW Consequently, we experienced a historically wide gap between prices for offices in central Copenhagen and those with a less prime location in 2020. While office properties in central Copenhagen were traded at prices in excess of DKK 50,000 per m², an office property located just 15 km from central Copenhagen was more difficult to sell and was offered at DKK 5-10,000 per m². Thus, the price level in central Copenhagen was 5-10 times as high.

Expectation of increasing rent levels The low initial yields on office properties in Copenhagen CBD and the wide gap between selling prices in Copenhagen and in surrounding municipalities should be viewed in the context of the trend seen in Copenhagen in recent decades. Copenhagen CBD has gradually become fully developed, and the expansion in the supply of office space is now happening in a 5-6-kilometre radius around central Copenhagen, for example in Ørestad, Nordhavnen, Godsbanearealet, and Sydhavnen.

offices located in the surrounding municipalities and in those areas where large volumes of new construction can still be added.

OFFICE

90% of the capital is chasing 10% of properties In 2020 investors showed a strong appetite for office properties and therefore we again experienced record-low yield levels. The downside is that 90% of the capital is chasing the same properties in Copenhagen and to some extent in the two or three next-largest cities, while interest in office properties outside the biggest cities is limited.

a significant decrease in the yield levels for prime office properties in Copenhagen from approx. 4.50% in 2015 to 3.5% in 2020 ( figure 33). In the same period the yield on prime residential properties has also decreased, although to a lesser degree, why prime office properties in Copenhagen now are acquired at lower initial yields than residential properties. However, the rationale behind this development can be questioned as the costs of vacancy, re-letting and conversion to new tenants in offices are significantly higher than for residential properties.

LOGISTICS

Increasing spread between the yield on office properties in Copenhagen and in the surrounding municipalities

Project

Subarea

Delivery

Area (m²)

Woods Augusthus

Copenhagen S (Ørestad)

2021 Q1

24,000

Østerport II

Copenhagen E

2021 Q1

Cph Highline

Copenhagen W

KLP Ejendom

Prelet area (m²)

Main tenant

Developer

14,000

Zoku hotel

NREP

17,000

8,300

DLA Piper

Fokus Asset Management

2021 Q1

16,800

14,400

SAS Ins. + Global

Skanska

Copenhagen S (Ørestad)

2021 Q1

50,000

E.C. Hansen Hus

Copenhagen W

2021 Q1

16,500

Glasværket/Scanport

Kastrup

2021 Q2

4,500

Nest 45

Copenhagen S (Ørestad)

2022 Q1

14,750

6,500

Postgrunden

Copenhagen W

2023 Q1

93,000

Redmolen

Copenhagen E (North Harbour)

2023 Q4

KLP 16,500

Visma Domicile

Arpe & Kjeldsholm Skanska

Hotel

Skanska

73,000

Danske Bank

Danica Pension

25,000

12,500

Bech Bruun

PFA

261,550

145,200

HOTEL

Total

RETAIL

Figure 34: Planned office projects in Copenhagen

Office // 51

KONTOR – FORVENTNINGER TIL 2021 OFFICE – EXPECTATIONS FOR 2021 Kontorejendomme er fortsat et stærkt aktiv Lejeniveauet på kontormarkedet i København har de seneste 10 år ikke oplevet de store udsving� Det stabile – og i et internationalt perspektiv – lave lejeniveau i København CBD skyldes, at København har været begunstiget af et stort udbud af byggemuligheder, hvilket har holdt lejen nede� Disse byggemuligheder i København CBD er nu ved at være udnyttet, hvorfor vi forventer en større stigning i lejeniveauet i CBD i løbet af de næste 5-10 år� Vi har derfor været vidne til historisk lave afkastniveauer på prime kontorejendomme i København� Salget af Danske Banks hovedkontor og Portland Towers til historisk høje priser pr� m² vidner om, at kontorejendomme fortsat anses som stærke investeringsaktiver� Vi forventer i 2021 at se afkast i niveauet 3,25% - 3,50% for de mest attraktive prime kontorejendomme� Usikkert kontormarked i omegnskommunerne Omfanget af spekulativt kontorbyggeri i Københavns omegnskommuner er meget begrænset på trods af store bebyggelsesmuligheder� Dette skyldes dels en begrænset

efterspørgsel og dels, at de aktuelle entrepriseomkostninger gør det svært at opnå en fornuftig økonomisk case ved en markedsleje i niveauet 1�100 – 1�200 kr� pr� m²� Vi forventer ikke, at dette vil ændre sig i løbet af 2021�

RED INVESTOR SURVEY Investorerne ser positivt på kontormarkedet RED Investor Survey viser, at 79% af de adspurgte forventer, at kontorlejemarkedet vil opleve uændret eller forbedret efterspørgsel fra lejerne i 2021 ( figur 35)� Set i relation til 2020 er dette en nedgang, som hovedsageligt forklares ud fra en usikkerhed i markedet grundet covid-19� De adspurgte investorer viser en udpræget optimisme til afkastniveauerne for 2021, hvor 17% af investorerne tror på faldende afkastniveauer ( figur 36)� Ligesom sidste år forventer majoriteten af investorerne (68%) forventer et uændret afkastkrav� Dette indikerer, at investorerne fortsat har positive forventninger til kontormarkedet i 2021�

FORVENTNINGER TIL 2021 Vi oplever fortsat en fornuftig efterspørgsel efter kontorlejemål i det centrale København� Tomgangen forventes dog at stige i 2021, og der bliver derfor øget konkurrence om lejerne i det kommende år� Uagtet at vi over de kommende 5-10 år forventer en større vækst i kontorlejen i København, er det vores forventning, at lejen i det centrale København i 2021 vil forblive uændret grundet den stigende tomgang� Afkastniveauet for kontorer har over en årrække været nedadgående� Vi forventer dog, at afkastniveauet vil være uændret i 2021 eller kun marginalt lavere, primært grundet til to forhold; den stigende tomgang i CBD og den forventede vedtagelse af lagerbeskatning� Den politiske udmelding omkring lagerbeskatning af investeringsejendomme kom primo oktober 2020, men den har ikke haft nogen effekt på de afkast der blev handlet til i 4� kvartal af 2020�

Figure 35: Investor Confidence Index – Office occupier demand

Figure 36: Investor Confidence Index – Office yields

With regard to the occupier market for office space during 2021, the demand on the occupier market will:

With regard to the development of initial yields for office properties during 2021, market yields will:

100%

100% 11%

45%

Improve

100%

Show little or no change

Remain stable

Worsen

Decline 78%

80%

68%

53% 21%

21%

17%

2% Q1 2020

Q1 2021

52 // RED – Danish Investment Atlas 2021

Increase

Q1 2020

Q1 2021

ANNUAL REVIEW Uncertain office market in surrounding municipalities Despite large development opportunities, there is a very limited amount of speculative

RED INVESTOR SURVEY Investors have a positive view on the office market RED Investor Survey shows that 79% of those questioned expect the office occupier market to experience unchanged or increased demand from tenants in 2021 ( figure 35). This is a lower percentage than in 2020, which primarily can be explained by uncertainty in the market due to covid-19. The investors surveyed are also highly optimistic about the yield levels for 2021, with 17% anticipating decreasing yield levels ( figure 36). Similar to 2020 most investors (68%) expect the yield requirements to be unchanged in 2021. This indicates that investors continue to have positive expectations for the office market.

We are continuing to experience a reasonable demand for office leases in central Copenhagen. However, vacancy rates are expected to increase in 2021, and thus there will be increased competition for the tenants. Despite the fact that we expect significant increases in the office rent levels in Copenhagen over the next 5-10 years, our expectation is that the rent level in central Copenhagen will remain unchanged in 2021 due to the rising vacancy rate. The yield levels for offices has been declining for a number of years. However, we anticipate that the yield levels will be unchanged in 2021 or only marginally lower, primarily due to two factors: a rising vacancy rate in CBD and the expected adoption of mark-to-market taxation. The political announcement on mark-tomarket taxation of investment properties was made in October 2020, but it has not yet had any impact on yield levels.

RESIDENTIAL

EXPECTATIONS FOR 2021

OFFICE

The sale of Danske Bank’s headquarters and of Portland Towers at historically high prices per m² demonstrates that office properties continue to be considered as strong investment assets. We expect to see yield levels of 3.25% to 3.50% for the most attractive office properties in 2021.

office construction in the municipalities surrounding Copenhagen. This is partly due to limited demand and partly to the current construction costs, which make it difficult to make a reasonable economic case at a market rent of around DKK 1,000 to 1,200 per m². We do not expect this to change during 2021.

LOGISTICS

Office properties continue to be a strong asset The rent levels in the Copenhagen office market have not fluctuated significantly over the past 10 years. The stable and, in international terms, low rent level in Copenhagen CBD is due to Copenhagen having benefitted from a large supply of development opportunities, which has kept the rent level down. These development opportunities in Copenhagen CBD are now about to be utilized, and we therefore anticipate a significant increase in the rent levels in CBD over the coming 5-10 years. Consequently, we have witnessed historically low yield levels on prime office properties in Copenhagen.

The Cushman & Wakefield | RED Investor Confidence Index

RETAIL

HOTEL

We conduct the survey on a biannual basis, allowing us to track changes and interpret what they mean for the market and how to best respond when making investment decisions. Office // 53

KONTOR – TRANSAKTIONER & NØGLETAL OFFICE – TRANSACTIONS & KEY FIGURES Office – Top 30 transactions 2020 Asset name

Area

Date

Size (m2)

Price (DKK)

Investor

Ärzteversorgung 2,100,000,000* Westfalen-Lippe

Vendor Aberdeen Standard Investments

Danske Bank HQ

Copenhagen K

March

48,094

Portland Towers

Nordhavn

October

13,749

700,000,000

Hines

ATP, PensionDanmark & PFA

Accura HQ

Nordhavn

July

13,180

600,000,000*

Velliv & Industriens Pension

Project North Holding Partnerselskab

Gammel Køge Landevej 39 & 45

Valby

September

32,213

580,000,000*

Schroder Real Estate

P+

Project Saxo

Copenhagen K

August

14,917

460,000,000

Jeudan

LB Forsikring

Grundtvigs Hus

Copenhagen W

May

10,000

300,000,000* Johan Gedda

CapMan

Godsbanevej 2

Ringsted

December

250,000,000* PensionDanmark

KPC

Hareskovvej 17R

Kalundborg

January

26,385

237,465,000* Rent Holding

Casa Danica

Vester Farimagsgade 17

Copenhagen W

June

12,478

233,000,000

Pensam

Proark

Langebrogade 5

Copenhagen K

May

4,990

180,992,000

Danmarks Skibskredit

Park Street Nordicom

Ved Amagerbanen 39

Copenhagen S

February

10,141

165,994,000

Quadoro Doric Real Estate

Geﬁon Group

Algade 14-18

Roskilde

December

11,244

150,000,000

MM Properties

Niam

Blegdamsvej 124

Copenhagen E

January

5,766

142,000,000

Oskar Jensen Gruppen

Børne og Ungdomspædagogernes Landsforbund

Farvergade 10

Copenhagen K

June

5,167

141,000,000

Pensam

Københavns Kommune

Linnésgade 25

Copenhagen K

December

3,558

127,800,000

Pensam

Private investor

Jeudan

9,378

Ragnagade 7

Copenhagen E

June

4,247

125,000,000

Nordre Fasanvej 108

Frederiksberg

August

5,316

120,000,000* Patrizia

Private investor

Otto Mønsteds Gade 3

Copenhagen W

September

4,394

119,700,000

Pplus

Bikubenfonden

Boulevarden 19A-19K-19Y

Vejle

October

17,288

116,500,000

Private investor

Danica

Nørre Voldgade 106

Copenhagen K

September

3,382

102,000,000

Jeudan

Dansk industri

Banemarksvej 50

Brøndby

January

19,738

100,000,000

Wihlborgs

Private investor

Østerbrogade 125 & 135

Copenhagen E

April

5,184

96,360,000

Jeudan

Pears

Olof Palmes Allé 25

Aarhus N

December

6,042

94,500,000

Actus

Commercial Real Estate Denmark

H.C. Andersens Boulevard 38

Copenhagen W

July

3,273

90,500,000

Pensam

Politiforbundet

Lindevangs Allé 8, 10 & 12

Frederiksberg

September

5,203

87,000,000

CapMan & Casa

VUC

Strandgade 108

Copenhagen K

February

1,858

85,000,000* Thylander Gruppen

Private investor

Albanigade 30

Odense C

February

4,750

69,000,000

Bygningsstyrelsen

Private investor

6. julivej 67

Fredericia

January

6,335

68,750,000

SBB

Private investor

Toldbodgade 18

Copenhagen K

September

1,915

67,000,000

Jeudan

Den Finske Stat

Øster Allé 1

Copenhagen E

October

5,172

66,767,000

Jeudan

Postnord

*Estimated price 54 // RED – Danish Investment Atlas 2021

Sølvsmedjen ApS

ANNUAL REVIEW RESIDENTIAL

RED assists Realdania By & Byg with the letting of the newly built office on Frederiksgade 2.

Yield level**

CBD – City center & Christianshavn

1,950

3.25% - 3.50%

Kalvebod Brygge

1,700

3.50% - 3.75%

North Harbour & Amerika Plads

1,950

3.50% - 3.75%

Frederiksberg

1,450

4.00% - 4.25%

Copenhagen E

1,500

3.75% - 4.25%

Copenhagen W & Carlsberg Byen

1,600

3.75% - 4.25%

Copenhagen N

1,300

4.75% - 5.25%

Copenhagen NW

1,200

4.75% - 5.25%

Islands Brygge

1,450

3.50% - 3.75%

Ørestad

1,500

4.25% - 4.75%

South Harbour

1,300

4.50% - 5.00%

Valby

1,350

4.75% - 5.25%

Amager East & Copenhagen Airport

1,425

5.00% - 5.50%

Tuborg Harbour

1,700

4.50% - 5.00%

Kongens Lyngby

1,450

4.50% - 5.00%

Ring 3

1,100

5.50% - 6.00%

LOGISTICS

Base rent (DKK)*

RETAIL

Subarea

OFFICE

Office – Prime rent and yield levels Q1 2021

* Excl. service charges ** In case of share transactions, this will impact yields, due to deferred taxes.

HOTEL

Source: C&W | RED

Office // 55

RED has an ongoing valuation mandate on carrying out the valuation of the logistics hub named Greve Distributions Center.

56 // RED – Danish Investment Atlas 2021

ANNUAL REVIEW RESIDENTIAL

LOGISTIK LOGISTICS Investeringsmarkedet 2020 // Investment Market 2020

Volumen & investorer 2020 // Volume & Investors 2020

OFFICE

Top 5 transaktioner 2020 // Top 5 Transactions 2020

Highlight: Efterspørgsel // Highlight: Demand

Forventninger til 2021 // Expectations for 2021

RETAIL

LOGISTICS

Transaktioner & nøgletal // Transactions & Key Figures

HOTEL

58 60 62 64 66 68

Logistics // 57

LOGISTIK – INVESTERINGSMARKEDET 2020 LOGISTICS – INVESTMENT MARKET 2020 Volumen mere end fordoblet Covid-19 førte i 2020 til en acceleration af den igangværende proces med en øget e-handel, hvilket både fik ejer- og lejerefterspørgslen efter logistikejendomme til at stige betydeligt� Samtidig kan investorerne fortsat opnå relativt høje afkast på danske logistikejendomme sammenlignet med tilsvarende ejendomme i vores nabolande� Disse faktorer medførte, at investeringerne i logistikejendomme steg til 9,0 mia� kr� i 2020, hvilket er svarende til en stigning på hele 118% i forhold til 2019, hvor transaktionsvolumen nåede 4,1 mia� kr� ( figur 38)� Den høje aktivitet betød, at segmentets andel af den samlede volumen steg til 12%, og dermed overtog pladsen som det tredje største ejendomssegment fra retailsegmentet, der historisk set har været det tredje største segment�

Udenlandske ejendomsfonde står for investeringerne De udenlandske investorer stod for næsten 3/4 af de samlede investeringer i logistikejendomme i 2020 og dominerede således logistikmarkedet� Særligt de udenlandske ejendomsfonde investerede store summer i logistikejendomme, og med en andel på 48% af investeringerne i segmentet var de den mest aktive investortype i 2020 ( figur 37)� Dette var i høj grad drevet af amerikanske Blackstone, der købte en logistikportefølje til ca� 1,8 mia� kr�, og koreanske Vestas Investment Management, der købte DSVs domicil til ca� 1,4 mia� kr�

Figure 37: Logistics – Investor type breakdown 2020

LOGISTICS VOLUME IN TOTAL

9.0 BN DKK

Volume more than doubled In 2020 covid-19 led to an acceleration of the ongoing process of increased e-commerce, which caused both the investor and tenant demand for logistics properties to increase significantly. At the same time, the investors continue to receive relatively high yields on Danish logistics properties compared with equivalent properties in our neighbouring countries. These factors led to an increase in the transaction volume in the logistic segment to DKK 9.0bn in 2020, equivalent to an increase of as much as 118% from 2019, when the transaction volume totalled DKK 4.1bn ( figure 38). As a result, the segment became the third largest with a share of 12% of the total volume, and thereby it surpassed the retail segment, which historically has been the third-largest segment.

58 // RED – Danish Investment Atlas 2021

Begrænset udbud af moderne logistikejendomme Til trods for den markante vækst i transaktionsvolumen vurderer vi dog, at investorernes efterspørgsel er langt fra at være mættet, men investeringerne bliver begrænset af, at alle investorerne efterspørger de samme ejendomme – moderne logistikejendomme beliggende i de mest attraktive logistikområder – som der kun er et begrænset udbud af� I 2020 steg handlen med logistikejendomme i samtlige af de største logistikområder ( figur 39)� Væksten var særlig høj i Storkøbenhavn, hvor der blev handlet logistikejendomme for 3,9 mia� kr�, hvilket blandt andet var drevet af salget af DSVs domicil i Hedehusene ca� 30 kilometer vest for København�

Foreign property funds account for the investments Foreign investors accounted for nearly 3/4 of the total investments in logistics properties in 2020, and thereby they dominated the logistics market. In particular, foreign property funds invested large sums in logistics properties and with a share of 48% of the total investments they were the most active investor type in 2020 ( figure 37). This was primarily driven by Blackstone, who acquired a logistics portfolio for approx. DKK 1.8bn, and Vestas Investment Management, who acquired DSV’s global headquarters for approx. DKK 1.4bn.

Property fund 48% Real estate company 21% Other 19% Private investor 10% Institutional investor 2%

Limited supply of modern logistics properties Despite the significant increase in the transaction volume our assessment is that the investor demand is far from fully satisfied. However, investments are limited by the fact that all of the investors are demanding the same properties, modern logistics properties located in the most attractive logistics areas, which are in limited supply. The logistics property transaction volume increased in all of the prime logistics areas in 2020 ( figure 39). The increase was particularly high in Greater Copenhagen, where logistics properties were traded for DKK 3.9bn, which was dominated by the sale of DSV’s global headquarters in Hedehusene, approx. 30 kilometres west of Copenhagen.

ANNUAL REVIEW

Figure 38: Logistics – Transaction volume 2012-2020 10 9.0 8.4 8

27%

RESIDENTIAL

20% 6.4 BN DKK

51% 4.0

1.7 0.7

62%

86%

38%

2012

2013

1.3

82%

80%

56%

49%

67%

44%

89% 18% 2014

2015

2016

Source: C&W | RED

2017

Danish

2018

2019

2020

OFFICE

73%

33%

2.8

4.1

Foreign

LOGISTICS

Figure 39: Logistics – Historic geographic breakdown 2018-2020 4.0 17%

3.5 3.0

42%

2.0

1.0

26%

83%

1.5

33%

19%

63% 49%

23%

47%

0.5 37%

51%

2018

2019

53%

75%

77%

2018

2019

2020

45%

81%

83% 74%

58% 67% 17%

0.0 2020

GREATER COPENHAGEN Source: C&W | RED

RETAIL

55%

TRIANGLE REGION Danish

2018

2019

2020

OTHER JUTLAND

2018

2019

2020

REST OF DENMARK

Foreign

HOTEL

BN DKK

2.5

Logistics // 59

43%

3.9

Foreign

COPENHAGEN Danish 17%

BN DKK

Danish

43%

Foreign

Foreign 83%

LOGISTIK 1.2 – VOLUMEN & INVESTORER 2020 OTHER ZEALAND Danish 42%

BN DKK

Foreign 58% LOGISTICS14% –OTHER VOLUME & INVESTORS 2020 ZEALAND Danish

1.2

Foreign

Danish 42%

BN DKK

Foreign 58%

14%

Danish

Foreign

FUNEN

0.2

Danish 100%

BN DKK

Foreign 0%

Danish

0.2

0.1

Foreign

BN DKK

Danish

Foreign

Foreign 0%

Danish

Foreign 12%

Foreign

0.1 3.9 43%

Foreign

Foreign 74%

3.9

Danish 17%

BN DKK

Danish

43%

Foreign

Danish 42%

BN DKK

Foreign 83%

14%

Danish

COPENHAGEN

BN DKK

Danish

0.1 0.1 BN DKK

Danish

BN DKK 12% Foreign Danish

Foreign

1% 1%

Foreign Foreign

0.1

AARHUS

Foreign 58%

Foreign 74%

Danish 88%

Foreign

0.7 BN DKK

0.7

Danish Foreign

1.2

TRIANGLE REGION

Danish

Danish 23%

Foreign

Foreign 77%

TRIANGLE REGION FUNEN

0.2

Danish 23% BN DKK

Foreign 77%

BN DKK

14%

Danish

OTHER ZEALAND

Foreign 58%

3.9

Danish 100% Foreign 0%

GREATER COPENHAGEN

BN DKK

Danish

43%

Foreign

3.9 3.9

Danish 17%Danish BN DKK

Danish BN DKK 83% Foreign Foreign

43% 43%

0.2 BN DKK

FUNEN

Foreign

FUNEN

1.2 BN DKK

14%

Danish

Foreign

BN DKK

32% 2021 60 // RED – Danish Investment Atlas

COPENHAGEN

Foreign 0%

Danish

2.9

GREATER GREATER COPENHAGEN COPENHAGEN Danish 17% Danish 17% Foreign 83% Foreign 83%

ZEALAND

Danish 100%

0.2

OTHER JUTLAND Danish 26%

BN DKK

3% Danish

Foreign 74%

Foreign

OTHER JUTLAND

ZEALAND OTHER ZEALAND OTHER OTHER ZEALAND Danish 42% Danish 42% Danish 42% BN DKK Foreign 58% BN DKK 58% Foreign Danish Foreign 58%

1.2 1.2 14% 14%

Danish

Foreign Foreign

FUNEN

0.2 0.2

Danish 100% BN DKK

BN DKK 0% Foreign

3% 3%

Danish Danish

Foreign Foreign

LOGIS VOLUME

BN D

Danish 42%

Foreign

COPENHAGEN COPENHAGEN Danish 88% Danish 88% Foreign 12% Foreign 12%

GREATER COPENHAGEN

Danish

Foreign

GREATER COPENHAGEN

OTHER ZEALAND

1.2

JUTLAND

Danish 2

BN DKK

Danish 26%

Foreign

OTHER JUTLAND

Danish

BN DKK

Foreign 12%

Foreign 83%

Danish 26%

32%

9.0

Danish 88% Danish

OTHER JUTLAND

Danish

BN DKK

Foreign 73% LOGISTICS VOLUME IN TOTAL

Danish 17% Danish

BN DKK

Foreign

Danish 27%

BN DKK

AALBORG COPENHAGEN

BN DKK

GREATER COPENHAGEN

BN DKK

2.9 2.9

9.0

Danish 88%

Danish 100%

BN DKK

LOGISTICS VOLUME IN TOTAL

COPENHAGEN

FUNEN

FUNEN FUNEN Danish 100% Source: C&W |100% RED Danish Foreign 0% Foreign 0%

De største udenlandske investorer fokuserer primært på moderne logistikejendomme beliggende i attraktive logistikområder, hvilket medførte en snæver geografisk fordeling af kapitalen, og at markedet i høj grad var drevet af få store handler� Der hersker således ingen tvivl om, at de udenlandske investorer har sat et stort aftryk på det danske marked for logistikejendomme�

ANNUAL REVIEW

Figure 40: Logistic transactions (BN DKK) Area

2019

2020

Change

Copenhagen & Greater Copenhagen

0.9

4.0

324%

Other Zealand

0.3

1.2

294%

Funen

0.8

0.2

-70%

Triangle Region

0.4

0.7

54%

Other Jutland

1.6

2.9

75%

Total

4.1

9.0

118%

RESIDENTIAL

Udenlandske investorer sidder på logistikmarkedet I 2020 såvel som samlet set i perioden 2012-2020 har samtlige af de fem største investorer i logistikejendomme været udenlandske� De tre mest aktive investorer i 2020 var Blackstone (USA), Vestas Investment Management (Korea) og Reitan (Norge)� Med fire investeringer med en samlet volumen på 4,4 mia� kr� tegnede de tre investorer sig for næsten halvdelen af den samlede transaktionsvolumen i 2020�

OFFICE

Foreign investors dominate the logistics market Both in 2020 and over the period 2012-2020 as a whole the five largest investors in logistic properties have been foreign. The three most active investors in 2020 were Blackstone (United States), Vestas Investment Management (Korea) and Reitan (Norway). With four investments totalling DKK 4.4bn, these three investors accounted for almost half of the total transaction volume in 2020.

LOGISTICS

The largest foreign investors primarily focus on modern logistic properties located in attractive logistic areas, which lead to a narrow geographical distribution of the capital and to the market being dominated by a few large transactions. It is therefore beyond doubt that the foreign investors have left a strong mark on the Danish market for logistic properties.

Figure 41: Logistics – Top 5 investors 2020 Investor

Origin Volume (M DKK)

No. of transactions

Blackstone

2,000

Vestas Investment Management

1,438

Reitan

1,000

Heimstaden

850

CBRE Global Investors

440

RETAIL

Source: C&W | RED

Figure 42: Logistics – Top 5 investors 2012-2020 Investor

Origin Volume (M DKK)

No. of transactions

NREP

3,780

Blackstone

2,585

Niam

1,898

Pareto Securities

1,487

W.P. Carey

1,457

HOTEL

Source: C&W | RED

Logistics // 61

LOGISTIK – TOP 5 TRANSAKTIONER 2020 LOGISTICS – TOP 5 TRANSACTIONS 2020 Photo: CREO Arkitekter

1. NREP PORTFOLIO The largest logistic transaction of the year was when NREP sold a portfolio with five Danish logistic properties to the American investment fund Blackstone in March 2020. The five properties comprise of a total area of 190,001 m² and are located in industrial areas across Denmark. In addition to the five Danish logistic properties, the transaction also included six logistic properties located in other Nordic countries. The price for the Danish part of the portfolio is estimated at DKK 1.8 bn.

Est. price (DKK):

Investor:

1,800,000,000

Blackstone

Size (m2):

Vendor:

190,001

NREP

Photo: DSV

2. DSV HQ In March 2020 it was announced that the South Korean investor Vestas Investment Management (represented by Savills Investment Management) had acquired DSV Panalpina’s newly built global headquarters, a cross-dock logistics facility used by DSV’s Road division, and a new warehouse used by clients of DSV’s Solutions business. The buildings are all located in Hedehusene west of Copenhagen. The properties will be leased back to DSV on long-term contracts.

Price (DKK):

62 // RED – Danish Investment Atlas 2021

Investor:

1,438,430,000

Vestas Investment Management

Size (m2):

Vendor:

117,377

DSV

ANNUAL REVIEW Investor:

1,000,000,000

Reitan

Size (m2):

Vendor:

103,000

Rema 1000

Photo: Photo HD ejendomme

4. NIAM PORTFOLIO

Price (DKK):

Investor:

850,000,000

Heimstaden

Size (m2):

Vendor:

182,700

Niam

LOGISTICS

The all-time largest transaction on the Danish real estate market was announced in December 2020 when Heimstaden acquired Niam’s Danish residential portfolio at a price of DKK 12.1 bn (DKK 850 m for the commercial part). The commercial part consists of 35 properties with a total area of 182,700 m². The commercial properties are primarily warehouses and logistic properties located across Denmark. Heimstaden are planning to sell off the commercial properties over the coming years.

Photo: Air Cargo News

5. KYSTVEJEN 32, COPENHAGEN In April 2020 CBRE Global Investors acquired a logistic property at Kastrup Airport in Copenhagen on behalf of a foreign investor. The property has a total area of 15,367 m² and was acquired from Worldwide Flight Services in a sale and leaseback transaction at a price of DKK 334 m. CBRE Global Investors also acquired the adjacent property in 2015, which is now fully let to FedEx.

Price (DKK):

Investor:

334,375,000

CBRE Global Investors

15,367

Vendor:

Worldwide Flight Services Denmark (WFS)

HOTEL

Size (m2):

RETAIL

Est. price (DKK):

RESIDENTIAL

In December 2020 the grocery chain Rema 1000 sold 19 grocery stores and their logistics center located in Horsens in Jutland in a sale and lease back transaction to their Norwegian owners, Reitan, at a price of approx. DKK 1.8 bn (DKK 1.0 bn for the logistics part). The logistics center is currently being expanded. When completed the property will have a total area of 103,000 m².

OFFICE

Photo: Rema 1000

3. REMA 1000 LOGISTICS CENTER

Logistics // 63

LOGISTIK – HIGHLIGHT: EFTERSPØRGSEL LOGISTICS – HIGHLIGHT: DEMAND Plads til et nedadgående pres på afkastet på de efterspurgte logistikejendomme

Plads til nedadgående afkast I årene efter finanskrisen var markedet for industri- og logistikejendomme karakteriseret ved en lav aktivitet og stabile afkastniveauer� Dog har markedet i de sidste 3-5 år oplevet en signifikant højere aktivitet, og som følge heraf, har afkastniveauerne været faldende og lejeniveauerne stigende for prime logistikejendomme� Det aktuelle afkastniveau for prime logistikejendomme i København og omegn (inkl� Køge og Greve) ligger på ca� 4,50-4,75% med en årlig basisleje på ca� 625650 kr� pr� m² ( figur 43)�

tendenser, at flere pakker skal distribueres mere effektivt samt et stigende behov for lagerkapacitet�

Logistikejendomme vinder momentum i 2020 Med mere end en fordobling i transaktionsvolumen, set i forhold til 2019, var industri- og logistiksegmentet årets helt store vinder� Den store interesse for industri- og logistikejendomme, herunder særligt logistik- og datacentre, ser vi dog ikke kun i Danmark, men også globalt i de udviklede lande� Fremgangen skal hovedsageligt ses i sammenhæng med covid-19 og de delvise nedlukninger, som var katalysator for en markant stigende e-handel i 2020� Dette accelererede udviklingen, hvorfor behovet for logistikejendomme er steget� I den seneste årrække har vi set et skift i forbrugeradfærden og øget e-handel� I takt med at forbrugerne er blevet mere tilvendt e-handel, er forbrugerforventningerne steget og netbutikkernes konkurrenceparametrene til logistikservices blevet skærpet, herunder; services som forskellige leveringsmuligheder, gratis fragt, bæredygtighed og ekspreslevering� Herudover ser vi en udvikling i de teknologiske aspekter, såsom automatisering og robotter� Flere af de store virksomheder i Danmark har allerede implementeret en hel eller delvis automatisering af lageret� Alt andet lige, betyder ovenstående

Underudbud af moderne logistikejendomme Vi ser i øjeblikket en stor investorefterspørgsel efter moderne velbeliggende logistikejendomme, der kan matche kapacitetsbehovet og forbrugernes forventninger om hurtig levering� De moderne og fleksible ejendomme er særligt efterspurgte, da disse ejendomme nemmere kan tilpasses virksomhedernes behov og derfor anses som mere fremtidssikre aktiver� Udbuddet af denne type ejendom i dagens marked er dog begrænset�

Trods det nedadgående pres på afkastniveauet, er Danmark stadig blandt de lande i Norden med de højeste afkastniveauer ( figur 44)� I Sverige er der solgt logistikejendomme til afkast på 4,25%, hvor blandt andet Gøteborg og Malmø er blandt de bedste logistikplaceringer� På trods af at disse placeringer og det svenske logistikmarked i høj grad er sammenligneligt med det danske marked, er danske logistikejendomme dog længere tilbage på prisudviklingskurven� Desuden gør Danmarks mere effektive adgang til Kontinentaleuropa igennem Tyskland, der styrkes ved opførslen af Femern Bælt-forbindelsen, Danmark til et interessant strategisk logistikpunkt i Norden� Den positive udvikling på de sammenlignelige markeder danner derfor grobund for, at der stadig er plads til et nedadgående pres på afkastkravene til logistikejendomme i Danmark�

Tomgangen på lager- og produktionsejendomme er primo 2021 nede på 2,7% og har været stabil igennem det seneste år� Samtidig ses det, at byggeaktiviteten indenfor transportcentre (inkl� datacentre) er steget markant siden 2018� I de kommende år forventes niveauet ligeledes højt� Indenfor byggeriet af logstikejendomme er der registreret flere spekulative byggerier, hvilket vidner om en tro på markedet og en efterspørgsel, der overstiger udbuddet� Uagtet at den høje byggeaktivitet vil have en mættende effekt på den stigende efterspørgsel af moderne og velplacerede logistikejendomme, er det endnu for tidligt at forudse, hvorvidt udbuddet kan følge med efterspørgslen, og hvornår vi rammer et ligevægtspunkt�

650

600

550

500

450

400 Q1

Q2 Q3 2015

Source: C&W | RED

Q2 Q3 2016

Q2 Q3 2017

Base rent (DKK per m2)

64 // RED – Danish Investment Atlas 2021

Q2 Q3 2018

Prime yield

Q2 Q3 2019

Q2 Q3 2020

Prime yield

Base rent (DKK per m2)

Figure 43: Prime logistics yield and rent level 2015-2020

Scope for downward trend in yield In the years after the financial crisis, the market for industrial and logistics properties was characterized by a low activity and stable yield levels. However, in the past three to five years the market has experienced a significantly higher level of activity, and consequently the yield levels have decreased, and the rent levels have increased for prime logistics properties. The current yield level for prime logistics properties in Copenhagen and the surrounding areas (including Køge and Greve) is approx. 4.50-4.75% with an annual base rent of DKK 625-650 per m² ( figure 43).

5.4%

Undersupply of modern logistics properties We are currently seeing a strong investor demand for modern, well located logistics properties that can match both the need for capacity and consumer expectations for fast delivery. The modern and flexible properties are particularly in demand, as they are easier to adapt to companies’ needs and are therefore considered as more future-proof assets. However, these properties are in limited supply.

ANNUAL REVIEW RESIDENTIAL OFFICE

In recent years, there has been a shift in consumer behaviour and an increased e-commerce. As consumers have shifted towards e-commerce, consumer expectations have increased, and the online retailers have increasingly focused on competitiveness in logistics services, including various delivery options, free shipping, sustainability, and express delivery. Furthermore, advances are being made in technological aspects, such as automation and robot, and several of the large companies in Denmark have already implemented complete or partial automation of their warehousing. All other things being equal, the trends mentioned implies that more parcels need to be distributed more efficiently and that there is an increasing need for warehouse capacity.

Despite the downward pressure on the yields, Denmark remains one of the Nordic countries with the highest yield levels ( figure 44). In Sweden, logistics properties have been sold to yields at 4.25%, where Gothenburg and Malmö are amongst the best logistics locations. Despite the fact that these locations and the Swedish logistics market in general closely resembles the Danish market, Danish logistics properties are further back on the price trend curve. In addition, Denmark’s more efficient access to continental Europe through Germany, which will be strengthened by the construction of the Femern Belt link, makes Denmark an interesting logistics area in the Nordic region. The positive trend in comparable markets therefore implies that there is still scope for a downward pressure on the yield requirements for logistics properties in Denmark.

LOGISTICS

Logistics properties gain momentum in 2020 With more than a doubling in the transaction volume compared with 2019, the logistics segment was 2020’s biggest winner. This strong interest in logistic properties, particularly logistics and data centres, are not only seen in Denmark but also globally. This progress must mainly be seen in relation with covid-19 and the following partial lockdowns, which proved to be a catalyst for a significant increase in e-commerce in 2020. This accelerated the development, and consequently the need for logistics properties has increased.

At the beginning of 2021, the vacancy rate for warehousing and production properties was at 2.7% and has been stable in the past year. At the same time, construction activity in transport centres (including data centres) has increased significantly since 2018 and is expected to remain at a high level over the next few years. Within the construction of logistics properties several speculative projects have been observed, which demonstrates confidence in the market and a demand that exceeds the supply. Despite the fact that a high level of construction activity will satisfy a part of of the increasing demand for modern and well located logistics properties, it is still too early to predict whether the supply can match the demand, and when we will reach a state of equilibrium.

4.4% SE

4.3% RETAIL

Scope for a downward pressure on the yield level on the attractive logistic properties.

4.5% UK

4.0%

4.0% DE

3.7% HOTEL

Figure 44: Prime logistic yield level in selected countries Q1 2021 Logistics // 65

LOGISTIK – FORVENTNINGER TIL 2021 LOGISTICS – EXPECTATIONS FOR 2021 Datacentre skyder op i Danmark Udover klassiske logistikcentre og lagerejendomme har vi i de senere år set en stigende aktivitet og investorinteresse i et nyere og voksende logistiksegment; nemlig datacentre� Både Facebook, Apple og Google har investeret i datacentre på dansk jord og i 2020 lancerede Microsoft deres mest omfattende milliardinvestering i Danmark� Projektet omfatter en bæredygtig datacenterregion fordelt på tre sjællandske lokationer� Særligt det danske klima, den gode fibernetforbindelse og ikke mindst muligheden for udnyttelsen af vedvarende energi og overskudsvarme, gør Danmark til en særdeles attraktiv lokation for etablering af datacentre� Dette gælder særligt for de store virksomheder, der stræber efter en grønnere profil� Datacentre er således blevet en etableret del af det danske logistikmarked� I de kommende år forventer vi, at brugerne enten selv vil købe jord og opføre datacentre eller i samarbejde med investorer lokalisere de rigtige beliggenheder og indgå lejekontrakter�

RED INVESTOR SURVEY

FORVENTNINGER TIL 2021

Optimismen fortsætter ind i 2021 RED Investor Survey viser primo 2021, at hele 61% af investorerne forventer en forbedret lejeefterspørgsel på logistikmarkedet, mens blot 4% forventer en forringet efterspørgsel ( figur 45)� Med andre ord tror hele 96% af investorerne på enten fremgang eller minimale ændringer i lejeefterspørgslen� Optimismen til logistiklejemarkedet i 2021 er på niveau med forventningsundersøgelsen i 2020, hvilket vidner om, at investorerne uagtet covid-19 og økonomiske usikkerheder har stor tiltro til segmentet�

Vi forventer, at de positive trends, med stor investorinteresse for prime logistikejendomme, fortsætter i 2021� Udbuddet af velbeliggende moderne logistikejendomme er i øjeblikket begrænset, men idet byggeaktiviteten har været markant stigende de seneste år, vil der fremadrettet være flere tidssvarende logistikaktiver der kan handles� Vi forventer derfor en transaktionsvolumen i 2021, der vil være på samme høje niveau som i 2020�

Halvdelen af investorerne forventer faldende afkast for logistikejendomme og kun 4% tror på stigende afkast ( figur 46)� Denne forventning om prisstigninger i 2021 overgår de ellers optimistiske forventninger ved indgangen af 2020� Der er således fortsat bred konsensus blandt investorerne om, at logistikmarkedet endnu ikke har nået sit fulde potentiale, hverken set i forhold til leje- eller investorefterspørgselen, hvorfor den høje efterspørgsel også forventes at fortsætte på den anden side af covid-19�

Vi forventer en stor lejeefterspørgsel og lejestigninger for velbeliggende logistikejendomme, der kan imødekomme kravet om hurtig levering, samt moderne og fleksible logistikejendomme, der nemmere kan tilpasses virksomhedernes behov� Mange forhold indikerer, at der stadig er plads til faldende afkastkrav for prime logistikejendomme� Særligt da der på mange sammenlignelige markeder aktuelt bliver handlet logistikejendomme til lavere afkast end i Danmark� Vi forventer derfor, at afkastkravet falder i 2021, og at vi vil se enkelte handler til afkastkrav tæt på 4,00%�

Figure 45: Investor Confidence Index – Logistics occupier demand

Figure 46: Investor Confidence Index – Logistics yields

With regard to the occupier market for logistic space during 2021, the demand on the occupier market will:

With regard to the development of yields for logistic/industrial properties during 2021, market yields will:

100%

100% Improve

100%

Show little or no change 60%

61%

38%

35%

Remain stable 46%

Worsen

55%

50%

38%

4% Q1 2020

Q1 2021

66 // RED – Danish Investment Atlas 2021

Increase

Q1 2020

Q1 2021

Decline

Optimism is continuing into 2021 The RED Investor Survey shows that at the beginning of 2021 no less than 61% of investors expect an improved occupier demand in the logistics market, while only 4% expect a reduced demand ( figure 45). In other words, as many as 96% of investors expect either increases or minimal changes in the occupier demand. Optimism about the logistics leasing market in 2021 is on par with the 2020 survey, which demonstrates that the investors have great confidence in the segment regardless of covid-19 and economic uncertainties.

We expect the positive trends, with strong investor interest in prime logistics properties, to continue in 2021. The supply of well located, modern logistics properties is currently limited, but as there has been a significant increase in the construction activity in recent years, there will be more modern logistics assets available in the market in the future. We therefore expect the transaction volume in 2021 to be in line with that of 2020.

Half of the investors expect the yield on logistics properties to decrease, and only 4% expect an increase ( figure 46). This expectation of price increases in 2021 surpasses the otherwise optimistic expectations at the start of 2020. Thus, there continues to be a broad consensus among investors that the logistics market has not yet reached its full potential, neither in relation to occupier investor demand, why the high level of demand is also expected to continue beyond covid-19.

We expect a strong occupier demand and rent increases for both well-located logistics properties that can fulfil the requirement for fast delivery, as well as for modern and flexible logistics properties that can be adapted more easily to the needs of businesses. Many factors indicate that there is still scope for decreasing yield requirements for prime logistics properties. This is particularly the case due to the fact that logistics properties in many comparable markets are currently being traded at lower yields than in Denmark. We therefore expect the yield requirements to decrease in 2021 and that we will see individual transactions at yield requirements close to 4%.

RESIDENTIAL

ANNUAL REVIEW Data centres have consequently become an established part of the Danish logistics market. In the future we expect that the users will either buy land and erect data centres themselves or work with investors to find the right locations and enter into lease agreements.

EXPECTATIONS FOR 2021

OFFICE

The Danish climate, good fibre networks, and the possibility of using renewable energy and excess heat make Denmark a highly attractive location for establishing data centres. This is particularly the case for large companies aiming for a greener profile.

RED INVESTOR SURVEY

LOGISTICS

Data centres in Denmark In excess of conventional logistics centres and warehouse properties, we have in recent years seen an increasing activity and investor interest in data centres – a newer and growing logistics segment. Facebook, Apple and Google have all invested in data centres on Danish soil, and in 2020 Microsoft launched their largest billion-kroner investment in Denmark. The project consists of a sustainable data centre region across three different sites on Zealand.

The Cushman & Wakefield | RED Investor Confidence Index

RETAIL

HOTEL

We conduct the survey on a biannual basis, allowing us to track changes and interpret what they mean for the market and how to best respond when making investment decisions.

Logistics // 67

LOGISTIK – TRANSAKTIONER & NØGLETAL LOGISTICS – TRANSACTIONS & KEY FIGURES Logistics – Top 30 transactions 2020

Asset name

Area

Date

NREP Portfolio

Across nation

March

Size (m2) 190,001

Price (DKK)

Investor

1,800,000,000* Blackstone Vestas Investment Management

Vendor NREP

DSV HQ

Hedehusene

February

117,377

1,438,430,000

Rema 1000 Logistics center

Horsens

December

103,000

1,000,000,000* Reitan

Niam Portfolio

Across nation

December

182,700

Kystvejen 32

Kastrup

March

15,367

334,375,000

CBRE Global Investors

Worldwide Flight Services Denmark (WFS)

Birkedam 11

Kolding

December

25,855

275,000,000*

Boreas Logistics Holdings

Carnegie (KOLDING LOGISTIKK INVEST AS)

Juelsmindevej 5

Kalundborg

September

15,806

200,000,000

Chr. Hansen

BASF

Sleipnersvej 2

Køge

June

28,962

200,000,000* BX/Mileway

Ares management

Rosbjergvej 25

Brabrand

January

27,421

196,554,375

W.P. Carey

Stark Group

Barmstedt Alle 5

Middelfart

August

25,048

180,555,000

Barmstedt Alle 5

Fiberline

Jernholmen 49

Hvidovre

December

30,422

137,000,000

Bulk Jernholmen

U.P.S. DANMARK

Danske Bank

850,000,000* Heimstaden

Industrivej 10

Odense S

November

16,278

136,585,292

Kanalholmen 15

Hvidovre

June

21,718

130,000,000* Lineage Logistics

Arnfredsvej 6

Vejen

July

37,205

Rønnekrogen 19

Hillerød

September

Islevdalvej 180-184 & Krondalvej

Rødovre

March

Gjellerupvej 105

Brabrand

Vestre Ringvej 101

Fredericia

5,045

76,500,000

Hanssen Hebo

DSV Rema 1000 Niam

BUDWEG CALIPER Apteno Coop Danmark

70,000,000* Blackbrook Capital

CEC Family Invest Holding

10,821

67,500,000

3C Sjælland

November

20,998

66,563,000* Casa & Domis

Arla Foods

December

34,702

62,250,000

Fredericia Kommune

Messe C

57,400,000

Columbus Circus

JP Basse

Columbusvej 1 & 3

Søborg

November

5,986

Constantiavej 31

Frederikshavn

November

11,708

55,200,000* KMC Properties

Storm Real Estate

Tvilhovej 8

Glejbjerg

November

15,538

55,078,074

KMC Properties

Storm Real Estate

Silkeborgvej 4

Aarhus C

October

746

44,000,000

PFA Ejendomme

CIRCLE K DANMARK

Naverland 33

Glostrup

January

14,630

41,000,000

Kaj Asbjørn Jensen

I/S NAVERLAND 33 - 35 V/TORBEN BRINK

Meterbuen 23

Skovlunde

February

6,623

38,284,745

Meterbuen 23

Private Investor

Østerled 30

Holbæk

November

9,469

36,900,000* KMC Properties

6,990

35,000,000

Kiss Development Roskilde

34,937

34,500,287

DSB

COLUMBUSBYG

Storm Real Estate

Klosterengen 137

Roskilde

November

Logistikparken 13

Brabrand

February

Havrevænget 1

Hobro

November

4,914

29,700,000* KMC Properties

Storm Real Estate

Greve Main 32

Greve

March

4,741

29,000,000

Neye

Alpi Danmark

Hvidkærvej 52

Odense SW

November

7,293

27,500,000

Scandinavian Investment Group

TOMMY G. CHRISTENSEN

*Estimated price

68 // RED – Danish Investment Atlas 2021

J.F.P. INVEST Åf Transport

ANNUAL REVIEW LOGISTICS

OFFICE

RESIDENTIAL

RED has an ongoing valuation mandate on carrying out the valuation of the FedEx property located at Copenhagen Airport.

Subarea

Rent level (DKK)*

Yield**

Copenhagen (Avedøre Holme & Amager)

650

4.50%

Taastrup Area

650

4.50%

Køge & Greve

650

4.50%

The Triangle Area (Fredericia, Kolding & Vejle)

500

5.25%

Odense Area

400

6.25%

Aarhus Area

500

5.00%

RETAIL

Logistics – Rent and yield levels Q1 2021

HOTEL

* Excl. service charges ** In case of share transactions, thís will impact yields due to deferred taxes Source: C&W | RED

Logistics // 69

RED assisted Barfoed Group P/S with the contractuation of 121 m² on Købmagergade 38 to Pilgrim.

70 // RED – Danish Investment Atlas 2021

ANNUAL REVIEW RESIDENTIAL

RETAIL RETAIL Investeringsmarkedet 2020 // Investment Market 2020

Volumen & investorer 2020 // Volume & Investors 2020

OFFICE

Top 5 transaktioner 2020 // Top 5 Transactions 2020

Highlight: Lejemarkedet // Highlight: Occupier Market

Highlight: Strøgtælling // Highlight: High Street Footfall

Highlight: Realafkastet // Highlight: Real Return

LOGISTICS

Forventninger til 2021 // Expectations for 2021

RETAIL

Transaktioner & nøgletal // Transactions & Key Figures

HOTEL

72 74 76 78 80 82 84 86

Retail // 71

RETAIL – INVESTERINGSMARKEDET 2020 RETAIL – INVESTMENT MARKET 2020 Flere handler i milliardstørrelsen På trods af usikkerhed forbundet med covid19 nåede den samlede transaktionsvolumen i retailsegmentet op på 7,2 mia� kr� i 2020, hvilket er en stigning på 76% fra 2019 ( figur 48)� Til forskel fra 2019 hvor der ikke blevet gennemført en eneste millardhandel, blev der i 2020 gennemført tre handler med retailejendomme til over én mia� kr� Retailmarkedet i 2020 var derfor præget af flere større handler, som trak volumen op� De fem største handler udgjorde omtrent 74% af den samlede transaktionsvolumen i 2020� For første gang siden 2016, dominerede udenlandsk kapital transaktionsvolumen i 2020, da udenlandske investorer investerede for ca� 3,8 mia� kr� svarende til 52% af den samlede volumen� I de senere år har danske investorer ellers været de toneangivende, hvor særligt shoppingcentre er holdt på danske hænder� Høj volumen i dagligvaresegmentet Et usikkert marked præget af nedlukninger af strøgejendomme og shopping centre forårsagede tilbageholdne investorer� Hvor efterspørgslen efter strøgejendomme tidligere år har været høj, var aktiviteten i

More billion-kroner transactions Despite uncertainty associated with covid-19, the total transaction volume in the retail segment reached DKK 7.2bn in 2020, which is equivalent to an increase of 76% from 2019 ( figure 48). In contrast to 2019, where there was not made a single billion-kroner transaction, there were three transactions with retail properties in excess of one billion kroner in 2020. Therefore, the retail market in was characterized by more large transactions, which boosted the volume. The five largest transactions accounted for 74% of the total transaction volume in 2020. For the first time since 2016, foreign capital dominated the transaction volume in 2020, with foreign investors investing approx. DKK 3.8bn, equivalent to 52% of the total volume. In recent years Danish investors have been dominating, where in particular shopping centres have been kept at Danish hands.

High volume in the grocery segment Forced closures of high street properties and shopping centres led to uncertainty in the market and made the investors hesitant.

72 // RED – Danish Investment Atlas 2021

2020 minimal med handel af blot to strøgejendomme i København; Jorcks Passage og Frederiksberggade 24� I stedet har investorerne søgt mod alternative og mere modstandsdygtige retailejendomme� Dagligvarebutikkerne var blandt de få butikker, der holdt åbent igennem hele 2020, og som derfor leverede en høj og stabil omsætning� Retailmarkedet i 2020 var derfor præget af en rekordhøj aktivitet i dagligvaresegmentet med en volumen på over 2,2 mia� kr� Ejendomsselskaber udgjorde den største investortype Ejendomsfonde har de seneste år udgjort den største investortype i retailsegmentet� I 2020 var investeringsaktiviteten fra denne

investortype dog på et meget lavt niveau� Ejendomsfonde, der primært er udenlandske kapitalfonde, har generelt udvist en tilbageholdenhed i forhold til retailsegmentet – en trend der blev forstærket under pandemien� I stedet viste ejendomsselskaber sig som værende de mest synlige på retailmarkedet, hvor transaktionsvolumen i 2020 for denne investortype satte rekord med ca� 2,5 mia� kr� ( figur 47)� Her udgjorde Aviva og Jorcks Ejendomsselskab hele 81% med købet af henholdsvis Galleri K og Jorcks Passage� Herefter fulgte institutionelle investorer med en samlet volumen på ca� 1,6 mia� kr� hvoraf Danske Shoppingcentre bidrog med ca� 1,4 mia� kr� med købet af Aalborg Storcenter�

Figure 47: Retail – Investor type breakdown 2020

RETAIL VOLUME IN TOTAL

7.2 BN DKK

While the demand for high street properties has been high in previous years, activity in 2020 was minimal, with only two high street transactions in Copenhagen: Jorcks Passage and Frederiksberggade 24. Instead, investors have seeked towards alternative and more robust retail properties. Grocery stores were among the few types of stores which stayed open throughout the entire year, and who thereby achieved a high and stable turnover. Consequently, the retail market in 2020 was characterized by a recordhigh level of activity in the grocery segment, with a volume of more than DKK 2.2bn.

Property funds have been reluctant In recent years property funds have been the largest type of investor in the retail segment.

Real estate company 34% Institutional investor 22% Property fund 18% Other 15% Private investor 11%

However, in 2020 the investment activity was at a very low level for this investor type. Property funds, which are primarily foreign capital funds, have generally been reluctant to invest in the retail segment – a trend that was amplified during the pandemic. Instead, real estate companies were the most active investor type in the retail segment. The real estate companies set a new record in 2020 with a transaction volume reaching DKK 2.5bn ( figure 47). Aviva and Jorcks Ejendomsselskab accounted for no less than 81% of this volume with the purchase of Galleri K and Jorcks Passage respectively. Hereafter the institutional investors followed with a total volume of approx. DKK 1.6bn, of which Danske Shoppingcentre contributed with approx. DKK 1.4bn with the purchase of Aalborg Storcenter.

ANNUAL REVIEW

Figure 48: Retail – Transaction volume 2012-2020 20 17.1

RESIDENTIAL

8.7

8.5 7.3

42%

2.5

58%

8.7

17%

7.2

29% 61%

44%

52%

7.7

43%

71% 56%

48%

39%

65%

48% 4.1 77%

52%

OFFICE

BN DKK

40%

23%

2012

2013

2014

Source: C&W | RED

2015 Danish

2016 Foreign

2017

2018

2019

2020

ATP/Danica deal

LOGISTICS

Figure 49: Retail – Geographic breakdown of foreign investments 2012-2020 6

RETAIL

0 2012

2013

Source: C&W | RED

2014

2015

2016

Greater Copenhagen

2017

2018

2019

2020

Rest of Denmark

HOTEL

BN DKK

Retail // 73

7.2

42%

0.5 BN DKK

BN DKK

GREATER COPENHAGEN Danish 74% Foreign 26% GREATER AARHUS COPENHAGEN Danish 62% Danish 74% Foreign 38% Foreign 26%

RETAIL –0.5 VOLUMEN & INVESTORER 2020 0.1 BN DKK BN DKK

1% 7% RETAIL – VOLUME & INVESTORS 2020

0.6 BN DKK

Danish 28%

OTHER ZEALAND Danish 42% Foreign 58% AALBORG OTHER ZEALAND Danish 100% Danish 42% Foreign 0% Foreign 58%

1.6 0.6

Foreign 72%

BN DKK Danish 28% BN DKK

23% 8%

Danish 28% Foreign 72%

3.0

Foreign 72%

0.3 BN DKK

BN DKK

42%

Foreign 57%

Danish

16% 4%

Foreign 79%

Danish 43%

BN DKK BN DKK

BN DKK

Foreign

0.5

OTHER JUTLAND FUNEN Danish 37% Danish 43%BN DKK Foreign 63% Foreign 57% 42% GREATER COPENHAGEN

3.0

BN DKK

Danish 28% Foreign 72%

Danish 42%

BN DKK

Danish 74% Foreign 26%

3.0 BN DKK

AARHUS

42%

Foreign 58%

Danish 100% Danish 28%

COPENHAGEN

3.0 3.0

Danish 21% BN DKK

BN DKK 79% Foreign

42% 42%

Foreign 0% Foreign 72% AALBORG

Danish 28% Foreign 0% 8%

23%

0.3

OTHER JUTLAND BN DKK

Danish 37%

Foreign

Foreign 63%

16%

0.3

Danish

Danish 37%BN DKK

Foreign

Foreign 63% 4%

0.1 BN DKK

BN DKK

Danish 62% Foreign 38%

BN DKK

23% 2021 74 // RED – Danish Investment Atlas

GREATER COPENHAGEN

0.5 0.5

Danish 74% BN DKK

BN DKK 26% Foreign

7% 7%

GREATER GREATER COPENHAGEN COPENHAGEN Danish 74% Danish 74% Foreign 26% Foreign 26% COPENHAGEN

ZEALAND

Danish 43% Foreign 57%

FUNEN

0.6 BN DKK

Danish 28% Foreign 72%

BN DKK

1.6

FUNEN

AARHUS

0.1

Danish 28%

0.5

Danish 43%

OTHER JUTLAND

1.1

Foreign 58%

ZEALAND OTHER ZEALAND OTHER OTHER ZEALAND Danish 42% Danish 42% Danish 42% BN DKK Foreign 58% BN DKK 58% Foreign Danish 28% Foreign 58%

0.6 0.6 8% 8%

Danish 28%

Foreign 72% Foreign 72%

AARHUS Danish 62% Foreign 38%

0.3

AALBORG Danish 100%

BN DKK

Foreign 0%

Foreign 72%

AALBORG

FUNEN

0.3 0.3

Danish 43% BN DKK

BN DKK 57% Foreign

4% 4%

RET VOLUME

BN D

Danish 42%

Foreign 57%

COPENHAGEN COPENHAGEN Danish 21% Danish 21% Foreign 79% Foreign 79%

GREATER COPENHAGEN

OTHER ZEALAND

Foreign 72%

FUNEN

Foreign 72%

BN DKK

0.6

Danish 100% BN DKK

Danish

Foreign

GREATER COPENHAGEN

OTHER ZEALAND

0.6

AALBORG

JUTLAND

Danish 4

BN DKK

Foreign 38% 7%

Danish 28%

16%

Foreign 79%

Danish 62%BN DKK

BN DKK

7.2

Danish 21%

0.5

AARHUS

1.6

1.1

BN DKK

AALBORG COPENHAGEN

Foreign 38%

23%

Foreign 52% RETAIL VOLUME IN TOTAL

Foreign 26%

Danish 62%

BN DKK

Danish 48%

Danish 74%

AARHUS

0.1 1.6

7.2

Danish 21%

FUNEN

1.1 0.3 0.1

RETAIL VOLUME IN TOTAL

COPENHAGEN

FUNEN FUNEN Danish 43% Source: C&W |43% RED Danish Foreign 57% Foreign 57%

Årets anden og tredje største investorer blev henholdsvis Danske Shoppingcentre med deres køb af Aalborg Storcenter og Savills Investment Managers med deres køb af 43 Rema 1000 ejendomme. Disse transaktioner var de primære årsager til, at volumen på Fyn og Jylland (ekskl. Aarhus) steg med hele 124% til 3,1 mia. kr. og dermed blev det geografiske område med den højeste aktivitet i 2020.

ANNUAL REVIEW

Figure 50: Retail transactions (BN DKK) Area

2019

2020

Change

Copenhagen

1.3

3.0

132%

Greater Copenhagen

0.2

0.5

99%

Other Zealand

0.5

0.6

Aarhus

0.6

0.1

-87%

Other Jutland & Funen

1.4

3.1

124%

Total

4.1

7.2

76%

RESIDENTIAL

Retailmarkedet drevet af tre investorer Med en samlet transaktionsvolumen på 4,2 mia. kr. tegnede årets tre største investorer (Aviva, Danske Shoppingcentre & Savills Investment Managers) sig for 58% af den samlede volumen på retailmarkedet. Aviva blev med deres investering i Galleri K på ca. 1,6 mia. kr. den største investor i 2020. Investeringen i Galleri K var blandt årsagerne til, at investeringer i København nåede en volumen på 3,0 mia. kr., hvilket er svarende til 42% af den samlede volumen.

OFFICE

Retail market driven by three investors With a total transaction volume of DKK 4.2bn, the year’s three largest investors (Aviva, Danske Shoppingcentre & Savills Investment Managers) accounted for 58% of the total transaction volume in the retail segment. Aviva was the largest investor in 2020 with their investment of approx. DKK 2.1bn in Galleri K. The investment in Galleri K was one of the reasons why investments in Copenhagen reached a volume of DKK 3.0bn, equivalent to 42% of the total volume.

LOGISTICS

The second and third largest investors of the year were Danske Shoppingcentre, with their purchase of Aalborg Storcenter, and Savills Investment Managers, with their purchase of 43 Rema 1000 properties. These transactions were the main reasons to why the volume in Funen and Jutland (excl. Aarhus) increased by as much as 124%, to DKK 3.1bn, making it the geographical area with the highest activity in 2020.

Figure 51: Retail – Top 5 investors 2020 Investor

Origin Volume (M DKK)

No. of transactions

Aviva

1,600

Danske Shoppingcentre

1,420

Savills Investment Management

1,200

Reitan

800

Jorcks Ejendomsselskab

400

RETAIL

Source: C&W | RED

Figure 52: Retail – Top 5 investors 2012-2020 Investor

Origin Volume (M DKK)

No. of transactions

ATP

7,941

Patrizia

2,900

ECE

2,900

Danske Shoppingcentre

2,788

Central Group

2,700

HOTEL

Source: C&W | RED

Retail // 75

RETAIL – TOP 5 TRANSAKTIONER 2020 RETAIL – TOP 5 TRANSACTIONS 2020 Photo: RED

1. GALLERI K The largest retail transaction of the year was Aviva’s acquisition of the Galleri K Building located in the city center of Copenhagen. Galleri K is located towards Østergade, which is one of the most attractive parts of Copenhagen’s main high street – Strøget. The property is a mixeduse property with a total area of 26,066 m² of which approx. 10,000 m² are retail. Patrizia bought Galleri K in 2015 and through active asset management they repositioned the property before they sold it to Aviva at an estimated price of DKK 1.6 bn in January 2020.

Est. price (DKK):

Investor:

1,600,000,000

Aviva

Size (m2):

Vendor:

26,066

Patrizia

Photo: RED

2. AALBORG STORCENTER The largest pure retail transaction in 2020 was Danske Shoppingcentre’s acquisition of the shopping center Aalborg Storcenter from ATP Ejendomme at a price of DKK 1.42 bn in December 2020. Danske Shoppingcentre is owned by the pension companies ATP Ejendomme and Danica Pension, who now has 18 shopping centers in their portfolio. With 52,000 m² of stores, 80 retail units, and 6.4 m annual visitors Aalborg Storcenter is the largest shopping center in Northern Jutland.

76 // RED – Danish Investment Atlas 2021

Price (DKK):

Investor:

1,420,000,000

Danske Shoppingcentre

Size (m2):

Vendor:

64,386

ATP Ejendomme

ANNUAL REVIEW Investor:

1,200,000,000

Savills Investment Management

Size (m2):

Vendor:

50,000

Rema 1000

Photo: Estate Media

4. 19 REMA 1000 STORES

Est. price (DKK):

Investor:

800,000,000

Reitan

Size (m2):

Vendor:

Unknown

Rema 1000

LOGISTICS

In addition to the portfolio with 43 grocery stores, Rema 1000 also sold a portfolio with 19 grocery stores located across all of Denmark and their logistics center located in Horsens in Jutland in a sale and lease back transaction to their Norwegian Owners, Reitan, in December 2020. Reitan acquired the retail part of the portfolio at a price of approx. DKK 800 m (DKK 1.8 bn for the entire portfolio). The sale of the two portfolios is a part of Rema 1000’s process towards a more pure business.

Photo: Design Group Architects

5. JORCKS EJENDOMSSELSKAB In March 2020 Danske Bank sold their 28% share of the real estate company Jorcks Ejendomsselskab to the other owners of the property, Aktieselskabet Reinholdt W. Jorck. Jorcks Ejendomsselskabs portfolio comprises 21 retail properties with a total area of 59,649 m². In addition to the retail part, the properties are also used for offices and residential use. The price of the 28% share was approx. DKK 400 m.

Investor:

400,000,000

Aktieselskabet Reinholdt W. Jorck

Size (m2):

Vendor:

59,649

Danske Bank

HOTEL

Price (DKK):

RE RETAILTAIL RETAIL

Est. price (DKK):

RESIDENTIAL

In December 2020, the British investment manager Savills Investment Management (represented by Capital Investment) acquired 43 Rema 1000 grocery stores in a sale and lease back transaction at a price of approx. DKK 1.2 bn. The 43 stores are located across all of Denmark and has a total area of approx. 50,000 m².

OFFICE

Photo: De Samvirkende Købmænd

3. 43 REMA 1000 STORES

Retail // 77

RETAIL – HIGHLIGHT: LEJEMARKEDET RETAIL – HIGHLIGHT: OCCUPIER MARKET Konsekvenserne af covid-19 afspejles i både tomgangen og lejeniveauet på det i forvejen udfordrede retailmarked Flere butiksåbninger i et presset marked Til trods for at usikkerheder ansporet af covid-19 førte til en generel tilbageholdenhed i markedet, var der flere butiksåbninger i det centrale København i løbet af 2020� Det danske modehus, Rains, åbnede deres til dato største butik på Amagertorv 14, på den anden side af gaden udvidede Foot Locker deres eksisterende forretning med nabolejemålet, og den danske keramikproducent, Studio Arhøj, flyttede hovedkontor, produktionsfaciliteter og butik til København K� Studio Arhøj er et eksempel på en ny type butik, hvor der er fuldstændig transparens overfor kunderne� De besøgende kunder kan se alt fra formning af potter, brænding af glas og pakning af online-ordrer, imens der handles i butikken�

The consequences of covid-19 are reflected in both the vacancy and the rental level in the already challenged retail market Several store openings in a market under pressure Despite uncertainty prompted by covid-19 leading to a general hesitancy in the market, there were several store openings in central Copenhagen in 2020. The Danish fashion house Rains opened their largest store to date at Amagertorv 14, on the other side of the street Foot Locker expanded their existing store to incorporate the neighbouring lease, and the Danish ceramics manufacturer Studio Arhøj moved their headquarters, production facilities and store to Copenhagen K. Studio Arhøj is an example of a new type of store, where there is complete transparency towards customers. While shopping in the store visiting customers can see everything from the shaping of the pots to the firing of glass and packing of online orders.

78 // RED – Danish Investment Atlas 2021

Rekordhøj tomgang og faldende lejeniveauer Mens der omkring årsskiftet 2019-2020 var et fald i tomgangen, var andelen af ledige m² i stueetagen på byens strøggader rekordhøj ved indgangen til 2021� Den ellers attraktive strøggade, Købmagergade, der går fra Amagertorv til Kultorvet, er særligt plaget af en høj tomgang� Ved indgangen til 2021 var omtrent 28% af stueetagearealet ledigt og antallet af ledige butikker var næsten tilsvarende højt� Det var dog ikke kun Købmagergade, som var hårdt ramt på tomgangen� I starten af 2021 oversteg den gennemsnitlige tomgangsprocent for alle strøggaderne (hele Strøget, Købmagergade og Frederiksborggade fra Kultorvet til Nørreport) 15 %, hvilket er et rekordhøjt niveau� Mere synligt er antallet af ledige butikker� I starten af 2021 var 54 lejemål ledige, hvilket svarer til 19% af alle lejemålene på strøggaderne� Med undtagelse af Amagertorv og få andre attraktive områder var lejeniveauet generelt

Record high vacancy rate and decreasing rent levels While there was a drop in the vacancy rates in the beginning of 2020, the proportion of vacant m² on the ground floor of the city’s high streets was record high at the beginning of 2021. The otherwise attractive high street Købmagergade, which runs from Amagertorv to Kultorvet, is particularly suffering from a high vacancy rate. At the beginning of 2021 approx. 28% of the ground-floor areas was vacant, and the number of vacant stores was almost as high. It is, however, not only Købmagergade who is experiencing a high vacancy. The average vacancy rate for all of the high streets (Strøget, Købmagergade and Frederiksborggade from Kultorvet to Nørreport) exceeded 15%, which is a record high level. The number of vacant stores are more visible and at the start of 2021, 54 premises were vacant, which is equivalent to 19% of all retail premises on the high streets.

faldende for størstedelen af byens handelsgader i 2020� Særligt Københavns sekundære handelsgader i Grønnegadekvarteret oplevede væsentlige fald i lejen, men også flere strøggader som Nygade, Købmagergade og Frederiksborggade oplevede et fald i lejeniveauet� Det vil blive værre, før det bliver godt I den nærmeste fremtid forventer vi både, at retailmarkedet vil være præget af, at adgangen for udenlandske virksomheders etablering i København fortsat er udfordret af rejserestriktioner, men også af en generel tilbageholdenhed blandt aktørerne grundet usikkerheder om fremtidens marked� Det er således vores forventning, at tomgangen fortsætter med at stige i løbet af 2021, før kurven forventes at knække i slutningen af året, forudsat at effekten af covid-19 aftager væsentlig efter sommeren� Vi forventer dog, at lejeniveauet kan stabiliseres hurtigere, da lejere såvel som udlejere allerede nu kan se en ende på krisens varighed�

With the exception of Amagertorv and a few other attractive areas, the rent levels for most of the city’s high streets were generally decreasing in 2020. In particular, Copenhagen’s secondary high streets in the Grønnegade area experienced substantial decreases in the rent levels, but also several high streets such as Nygade, Købmagergade and Frederiksborggade saw a drop in the rent levels.

It will get worse before it gets better In the immediate future we both expect that the retail market will be characterized by the fact the foreign companies’ store openings in Copenhagen continues to be challenged by travel restrictions but also by a general hesitancy among the market players due to uncertainties about the future of the market. We therefore expect the vacancy rates to continue to increase in 2021 before the curve is expected to reverse at the end of the year, provided that the effect of covid-19 decrease substantially after the summer. However, we expect the rent levels to stabilise sooner, as both the tenants and the landlords can already now see an end to the crisis.

ANNUAL REVIEW

Rent level DKK Zone A

Vacancy Q1 2021

Change in vacancy 2020-2021 (%-points)

Amagertorv

33,000

3.09%

-5.57%

Østergade

28,000

5.91%

1.22%

Købmagergade

25,000

28.09%

12.93%

Vimmelskaftet

20,000

16.68%

-2.61%

Nygade

18,000

15.07%

4.14%

Frederiksborggade

14,000

25.25%

14.40%

Frederiksberggade

14,000

17.52%

-13.53%

Kronprinsensgade

11,500

N/A

Berlingske

8,000

N/A

Grønnegade

6,000

N/A

Østerbrogade

3,750

N/A

Gammel Kongevej

3,250

N/A

Nørrebrogade

2,500

N/A

Lyngby

8,000

N/A

RETAIL

Street name

LOGISTICS

OFFICE

RESIDENTIAL

RED assisted Ole Haslunds Hus A/S with the contractuation of 514 m² on Amagertorv 14 to Rains

Methodology Zone A – Prime rent is estimated on the basis of ITZA guidelines and in this case indicates the value of the most expensive area in the model. However, properties in Denmark are rarely comparable 1:1, hence the depth of zone A (the area subject to generate the prime rent) may vary, but the value is typically determined to be between 6 m (20 ft) and 9 m (30 ft).

HOTEL

The vacancy rate is given by an observed amount of vacant square metres in the ground ﬂoor of high street properties relative to the total amount of square metres in the ground ﬂoor of properties in the respective street. Hence, retail areas on any other levels are not included in this assessment.

Retail // 79

RETAIL – HIGHLIGHT: STRØGTÆLLING RETAIL – HIGHLIGHT: HIGH STREET FOOTFALL Aktiviteten på de københavnske strøggader afhænger af de udenlandske turister Øde strøggader grundet manglende turisme Som følge af de omfattende restriktioner, pålagt samfundet d� 11� marts, lå de københavnske strøggader øde hen i to måneder fra midten af marts til midten af maj� I takt med genåbningen af samfundet åbnede butikkerne op en efter en i starten af sommeren, hvor udenlandske turister normalvis strømmer til de københavnske strøggader� I månederne juni-august var der tilbage i årene 2017-2019 gennemsnitligt mellem 26% og 50% flere udenlandske overnatninger på hoteller og feriecentre i København, end der var i årets resterende måneder� Manglen på udenlandske turister var den primære årsag til, at der i løbet af sommermånederne blev registreret et historisk

lavt antal besøgende på strøggaderne� Eksempelvis kunne strøggaderne blot mønstre 39%-59% af den normale trafik for juni måned sammenholdt med den gennemsnitlige registrering for samme måned de foregående tre år – også selvom mange danskere fyldte godt i registreringerne grundet den manglende mulighed for udlandsrejse ( figur 53)�

I november og december steg smittetrykket igen, og fra henholdsvis d� 9� og 25� december blev restaurationsbranchen og detailhandlen igen pålagt omfattende nedlukningsrestriktioner, som vil påvirke strøgtællingerne ind i 2021� Før de udenlandske turister igen har uhindret adgang til landet, forventer vi ikke, at trafikken på strøggaderne vil ændres betydeligt�

Næsten stabiliseret efterår Andelen af udenlandske turister på strøggaderne var ligesom under normale forhold aftagende i løbet af sensommeren og efteråret i 2020� Trafikken blev derfor også mere eller mindre stabiliseret i løbet af efteråret, og i september 2020 var antallet af forbipasserende oppe på 71%-75% af normalen� Forskellen på trafikudviklingen gaderne imellem steg dog i løbet af oktober, og i november var det tydeligt, at de forbrugere, der havde adgang til strøggaderne, fravalgte Frederiksberggade til fordel for særligt Købmagergade�

Figure 53: High street footfall June-December 2020 100%

90%

% of yearly average

80%

70%

60%

50%

40%

30% Jun. Source: C&W | RED

Jul.

Aug.

Sep.

Oct.

Nov.

Frederiksborggade/Købmagergade

Købmagergade/Kronprinsensgade

Østergade/Ny Østergade

Frederiksberggade

80 // RED – Danish Investment Atlas 2021

Dec.

ANNUAL REVIEW

Figure 54: Average footfall counts per hour

Østergade/Pilestræde

5,325

Amagertorv/Købmagergade

5,625

Amagertorv

5,409

Amagertorv/Vimmelskaftet

5,269

Nygade/Vimmelskaftet

5,291

Frederiksberggade

4,029

Købmagergade/ Kronprinsensgade

5,433

Rundetårn

Frederiksborggade/ 10 Købmagergade

Kultorvet

12 Kø

11 e rg

8 1

5,324

2,740

12 Grønnegade/Ny Østergade

2,431

t Øs

4,824

11 Pilestræde/Kronprinsensgade

LOGISTICS

4,320

RETAIL

Østergade/Ny Østergade

2020

In November and December the reproduction rate of the virus increased again, and both the restaurants and the stores had closures imposed on them from 9th and 25th of December respectively, which will also impact the high street footfall in the beginning of 2021. We do not expect the footfall at the high streets to change significantly before the international tourists are again able to enter the country unhindered.

5 6 Gammeltorv

Vimmel

skaf tet

Amagertorv

Methodology RED carries out the footfall counts on Fridays at 4 pm with the purpose of registering the development and estimate a level of footfall at different locations on Strøget and Købmagergade. The footfall is counted manually from both directions. It must be noted that no footfall counts were made in the period from mid-March to early May. The average footfall counts would have been significantly lower if this period had been included.

Retail // 81

HOTEL

Street name

Almost stabilised autumn Similar to under normal condition, the proportion of international tourists on the Copenhagen high streets decreased during the late summer and autumn of 2020. Therefore, the footfall more or less stabilised during the autumn, and in September 2020 the number of bypassing customers was at 71%-75% of the normal level. However, the difference

in the footfall between the high streets grew wider in October, and in November it became clear that consumers who had access to the high streets were abandoning Frederiksberggade in favour of particularly Købmagergade.

RESIDENTIAL

Empty high streets due to absence of tourism As a consequence of the wide-ranging restrictions imposed on the Danish society on the 11th of March, high streets in Copenhagen were deserted for two months from midMarch to mid-May. With the reopening of the society, the stores reopened one by one at the start of the summer – a time where international tourists normally rush to the Copenhagen high streets. From 2017 to 2019, there were on average between 26% and 50% more foreign overnight stays in hotels and holiday centers in Copenhagen during the period from June to August than in the remaining months of the year.

The absence of foreign tourists is therefore assumed to be the primary reason to why a historically low number of visitors was recorded at the Copenhagen high streets. As an example, in June high streets were only able to muster between 39%-59% of the normal footfall for the same month in the previous three years – even though many Danes boosted the footfall as they were unable to travel abroad ( figure 53).

OFFICE

The activity on the Copenhagen high streets depends on the foreign tourists

RETAIL – HIGHLIGHT: REALAFKASTET RETAIL – HIGHLIGHT: REAL RETURN Muligheder for et højere afkast på retailejendomme på længere sigt Aftagende interesse for strøgejendomme På baggrund af få store handler nåede retailsegmentet i 2020 en større volumen end i 2018 og i 2019� Dette var til trods for, at investorernes interesse i strøgejendomme i København, som historisk set har drevet volumen, har været aftagende� Strøgejendomme og shoppingcentre er blandt de ejendomstyper, som investorerne i øjeblikket efterspørger mindst� Dette kan i høj grad tilskrives usikkerhederne omkring fremtidsudsigterne for den fysiske butik� En række af de største retaillejere efterspørger i dag i højere grad omsætningsbaserede lejekontrakter, hvilket indebærer en højere risiko for udlejer end tidligere� Til trods for at der var et fornuftigt antal nyudlejninger på strøggaderne i København i 2020, har det ikke været tilstrækkeligt til at gøre op med investorernes forventninger om en generelt lavere efterspørgsel efter butikslokaler i 2021� Udlejere på retailmarkedet har historisk set draget fordel af årligt stigende lejeniveauer

på prime beliggenheder� I en periode har lejeniveauet dog været på et niveau, som har medført stigende usikkerhed blandt investorerne omkring lejeniveauets robusthed� Stor forskel på købers og sælgers forventninger Set i lyset af den underliggende usikkerhed i retailsegmentet, oplever vi fortsat for store forskelle i køber og sælgers forventninger til afkastet på retailejendomme� Samtidig er lejeniveauerne svagt nedadgående for en række af de københavnske strøggader� Vi ser derfor ind i et marked, der prøver at genfinde sit fodfæste og reetablere sig som et fornuftigt investeringsaktiv i en situation, hvor lejere gradvist stiller højere krav, forventer større risikodeling, og hvor forskellen mellem købers og sælgers forventninger til afkastet stadig er stor� Når stormen har lagt sig, vender investorerne tilbage Set i lyset af en fornuftig udlejningsaktivitet, hvor flere lejemål på strøggaderne forventes udlejet, vil markedslejen i højere grad finde sit nye niveau� Dette vil udligne noget af den usikkerhed, der i de senere år har bremset investeringslysten�

Der har i de seneste år været et nedadgående pres på afkastniveauet på prime kontorejendomme� Dette har betydet, at vi i dag ser afkast på prime kontorejendomme på niveau med attraktive strøgejendomme, hvilket vi ikke tidligere har set� Når usikkerhederne på retailmarkedet har aftaget, og der igen opstår konsensus omkring blandt andet markedslejeniveauet, forventer vi, at investorerne vil vende tilbage til retailmarkedet� Rationalet er, at totalafkastet over en 10- til 15-årig periode på retailejendomme i mange tilfælde vil være højere end på kontorejendomme� Dette skyldes, at der alt andet lige er færre lejerudskiftninger sammenholdt med kontorsegmentet, og at ejers omkostninger til istandsættelse er lavere, idet lejere i retaillejemål ofte selv bekoster ombygning og indretning� Samlet set betyder det, at investorer, henset til forventningen om et i fremtiden mere sikkert og stabiliseret retailmarked, vil være i stand til at generere fornuftige totalafkast over investeringsperioden� Desuden forventer vi, at de faldende afkast og dermed stigende priser på kontormarkedet på sigt vil medføre, at investorerne søger højere afkast ved at placere deres kapital i andre aktiver som eksempelvis retailejendomme�

Landlords in the retail market have historically benefited from annual increases in the rent levels on the prime retail locations. However,

Thus, we are looking at a market that is trying to regain its foothold and re-establish itself as a reasonable investment asset in a situation in which tenants are gradually making greater demands and expect a greater risk sharing and where the gap between buyers’ and sellers’ expectations on the yields remains large.

When the storm has eased, investors return In the view of a reasonable letting activity, with more lettings of premises on the high streets being expected, the market rent will to a greater extent find its new level. This will eliminate some of the uncertainty that has curbed investments in recent years.

Overall, this means that, given the expectation of a more secure and stable retail market in the future, investors will be able to generate reasonable total yield over the investment period. In addition, we expect that the decreasing yields and therefore increasing prices in the office market in the long term will incentivize the investors to seek higher yields by placing their capital into other assets such as retail properties.

RESIDENTIAL

ANNUAL REVIEW High street properties and shopping centres are currently among the property types with the lowest investor demand. This can largely be attributed to uncertainties regarding the future prospects of the physical store. A number of the largest retail tenants are now to a greater extent demanding turnover-based leases, which imposes a greater risk for the landlord than in the past. Despite a reasonable number of new lettings on the Copenhagen high streets in 2020, this has not been sufficient to offset the investors’ expectations of lower demand for retail premises in 2021.

Large difference in the buyers’ and sellers’ expectations In view of the underlying uncertainty in the retail segment we continue to experience excessively large differences between buyers’ and sellers’ expectations to the yield on retail properties. At the same time, rent levels on the majority of the Copenhagen high streets are decreasing.

There has been downward pressure on the yield levels for prime office properties in recent years. This had meant that we are now seeing yields on prime office properties on a par with attractive high street properties, which has not been seen previously. When the uncertainties in the retail market have waned, and consensus on the market rent level is re-established, we expect that investors will return to the retail market. The rationale is that the total yield over a 10 to 15-year period on retail properties will in many cases be higher than on office properties. This is due to the fact that the tenancy churn is lower than in the office segment and that owners’ renovation costs are lower, as tenants in retail premises often pay for the conversion and refurbishment themselves.

OFFICE

Decreasing interest in high street properties Driven by a few large transactions, the retail segment reached a higher volume in 2020 than in 2019. This was despite a decline in investor interest in high street properties in Copenhagen, which historically has driven the activity in the segment.

in recent years the rent levels have been at a level that has led to increasing uncertainty among the investors about the robustness of the rent levels.

LOGISTICS

Opportunities for a higher total yield on retail properties in the long run

HOTEL

RETAIL

RED represented Arhøj ApS in the takeover of 510 m² on Skindergade 5-7

Retail // 83

RETAIL – FORVENTNINGER TIL 2021 RETAIL – EXPECTATIONS FOR 2021 Pandemien vil fortsat påvirke segmentet i 2021 Grundet usikkerheder forventer vi fortsat at investorerne vil være tøvende med investeringer i retailejendomme i starten af 2021� Investorerne vil søge mod de mest sikre retailaktiver som dagligvarebutikker med lange lejekontrakter og de bedst beliggende strøgejendomme� Desuden forventes der i takt med at Danmark åbner op igen at være lejeefterspørgsel på de bedste placeringer i storbyerne� For sekundært beliggende retail forventes efterspørgslen fra både investorog lejersiden at være lav i 2021� Attraktivt beliggende veldrevne destinationscentre forventes fortsat at have interesse blandt investorerne, mens sekundære centre forventes vanskeligt omsættelige� Som i 2020 vil der i det kommende år fortsat være fokus på at skabe footfall i shoppingcentrene gennem udvidelse af F&B, oplevelser og services�

RED INVESTOR SURVEY

FORVENTNINGER TIL 2021

Covid-19 har haft særligt store konsekvenser for detailhandelen grundet smitterisiko og nedlukninger, hvilket også afspejles i investorernes forventninger til retailsegmentet� RED Investor Survey viser, at de adspurgte investorer er blevet mere pessimistiske fra 2020 til 2021 både for så vidt angår den forventede efterspørgsel fra lejernes side og prisudviklingen� Primo 2021 forventer 76% af investorerne lavere lejeefterspørgsel, hvilket er en væsentlig stigning på 22%-point fra 2020 ( figur 55)� Samtidig forventer ingen af investorerne en forbedring i lejeefterspørgslen i 2021�

Inden pandemien ramte landet i 2020 forventede 23% af de adspurgte investorer prisfald, hvorimod hele 41% nu forventer prisfald i løbet af 2021 ( figur 56)� Dette indikerer en mere pessimistisk holdning til retailsegmentet� Overraskende forventer samme andel (18%) af investorerne lavere afkastkrav i løbet af 2021 som i 2020, hvilket er udtryk for, at en del af markedets aktører mener, at priserne har nået bundet�

Transaktionsvolumen i 2021 forventes uændret fra 2020� Vi forventer, at investorerne i primo 2020 vil være tøvende med investeringer i retailsegmentet� Forudsat at covid-19 situationen har lagt sig, forventer vi ultimo 2021 at se en ketchupeffekt med større aktivitet og efterspørgsel efter retailejendomme� Afkastkravet på de bedst-beliggende retailejendomme forventes uændret, mens der forventes at være et mindre opadgående pres på afkastet på retailaktiver med svagere placering eller med større krav til asset management færdigheder�

Figure 55: Investor Confidence Index – Retail occupier demand

Figure 56: Investor Confidence Index – Retail yields

With regard to the occupier market for retail space during 2021, the demand on the occupier market will:

With regard to the development of initial yields for retail properties during the coming six months, market yields will:

100%

Improve

14% 24%

Show little or no change

Increase 23%

41%

Worsen

32%

Decline

59%

41%

18%

76% 54%

Q1 2020

Q1 2021

84 // RED – Danish Investment Atlas 2021

Remain stable

Q1 2020

Q1 2021

ANNUAL REVIEW Covid-19 has had a particularly great impact on the retail market due to risk of infection and lockdowns, a fact which is also reflected in the investors’ expectations for the retail segment. The RED Investor Survey shows that the investors became more pessimistic from 2020 to 2021, in terms of both the expected demand from tenants and the price development. At the beginning of 2021, 76% of the investors expect a decreasing occupier demand, which is a significant increase of 22 %-points from 2020 ( figure 55). Meanwhile none of the investors expect an improvement in the occupier demand in 2021.

Before the pandemic hit the country in 2020, 23% of the investors surveyed expected prices to decrease, by 2021 this had grown to as many as 41% expecting a decrease in prices ( figure 56). This indicates a more pessimistic attitude towards the retail segment. Surprisingly, the proportion of investors expecting lower yield requirements were unchanged from 2020 to 2021 (18%). This implies that some of the players in the market believe that prices have bottomed out.

The transaction volume in 2021 is expected to be unchanged from 2020. We expect that investors will be hesitant in investing in the retail segment in early 2021. Provided the covid-19 situation has eased, we expect to see a release of pent-up demand with greater activity and demand for retail properties at the end of 2021. The yield requirement for the best located retail properties is expected to be unchanged, while there is expected to be a slight upward pressure on the yields on retail assets, with a weaker location or with greater requirements for asset management skills.

RESIDENTIAL

EXPECTATIONS FOR 2021

LOGISTICS

Attractively located, well managed destination centres are expected to continue to attract the interest of the investors, while secondary centres are expected to be difficult to sell. As in 2020, there will be a continued focus on creating footfall in the shopping centres by expanding F&B, experiences, and services.

RED INVESTOR SURVEY

OFFICE

The pandemic will also have an impact in 2021 Due to uncertainties, we continue to expect that the investors will be hesitant in investing in retail properties at the start of 2021. Investors will seek the safest retail assets such as grocery stores with long leases and the best located high street properties. In addition, as Denmark reopens there is expected to be an occupier demand for the best locations in the major cities. Both the tenant and investor demand for retail premises in secondary locations is expected to be low in 2021.

The Cushman & Wakefield | RED Investor Confidence Index

RETAIL

HOTEL

We conduct the survey on a biannual basis, allowing us to track changes and interpret what they mean for the market and how to best respond when making investment decisions.

Retail // 85

RETAIL – TRANSAKTIONER & NØGLETAL RETAIL – TRANSACTIONS & KEY FIGURES Retail – Top 30 transactions 2020

Asset name

Area

Date

Galleri K

Copenhagen K

January

Size (m2) 26,066

Price (DKK)

Investor

1,600,000,000* Aviva

Vendor Patrizia

Aalborg Storcenter

Aalborg

December

64,386

1,420,000,000

Danske Shoppingcentre

43 Rema 1000 stores

Across nation

December

50,000

1,200,000,000*

Savills Investment Management

19 Rema 1000 stores

Across nation

December

N/A

Jorcks Passage

Copenhagen K

March

7,040

400,000,000

Aktieselskabet Reinholdt W. Jorck

Danske Bank

Frederiksberggade 24

Copenhagen K

August

5,669

Conﬁdential

Areim

Patrizia

Englandsvej 51

Copenhagen S

February

2,997

71,051,000

Englandsvej 51

ABL Properties

Prins Jørgens Alle 12

Vordingborg

October

4,745

66,700,000

Coop Danmark

MIDTJYSK INVEST

Fabrikvej 2 & 3

Viborg

March

5,026

54,900,000

Scandinavian Investment Group

K/S HERNING, VIBORG

Slotherrensvej 111

Vanløse

November

4,415

48,000,000

Scandinavian Property Development Denmark

I/S Hadsundvej 12

Kongensgade 27

Odense C

August

4,618

47,500,000

Skovsbo

Bo Busk-Rasmussen

Gladsaxevej 341

Søborg

December

8,331

46,000,000

Benjamin Capital

K/S GLADSAXEVEJ, SØBORG

Tempovej 23

Ballerup

January

2,937

42,453,785

K/S Ballerup Boulevard-Tempovej

Ejendomsselskabet af 9/9-2015

Staldgaardsgade 14A

Vejle

February

2,894

38,000,000

Boinvest

Vestald

Beder Butikscenter

Beder

November

4,782

36,700,000

Skåde Brugsforening

BEDER BUTIKSCENTER

Østerbrogade 135

Copenhagen E

May

1,436

35,640,000

Coop Danmark

Pears

Christiansminde 2

Viborg

December

2,200

32,706,640

Odin Group

Ejendomsselskabet Møgeltoft

Tigergården

Odense C

December

2,000

29,500,000* Oak3

AG Gruppen

Stenbukken 6A-10

Aalborg SW

December

2,920

29,485,000

Claus Jensen Invest

K/S Aalborg Syd

Slangerupgade 37 et al.

Hillerød

March

1,646

28,500,000

Ejendomsselskabet Herluf Trolles Torv

MagniPartners

Oddervej 56

Højbjerg

March

1,900

26,750,000

Rema Butiksudvikling

Private investor

800,000,000* Reitan

ATP Ejendomme Rema 1000 Rema 1000

Lundevej 3

Tune

July

1,050

26,750,000

K/S Netto Tune Parkvej

CECR Invest 1

Jernbanegade 15-17

Nykøbing F.

September

3,755

25,250,000

Skanlux Ejendomme

Dansk Ejendomsudvikling

Nørrevænget 34

Silkeborg

February

1,578

24,500,000

Difko Invest

VMN Ejendomme

Klarupvej 67

Klarup

March

1,030

23,350,000

TKGL Invest

Rema Butikdsudvikling

Gravensgade 1A

Aalborg

May

1,563

22,000,000

Egonsminde Invest & Management

Margrethe Sundtoft Nielsen

Roskildevej 244

Rødovre

March

2,610

20,750,000

Proximus

Private investor

Magnoliavej 7

Odense SW

December

2,357

20,000,000

Aaskov byggeﬁrma

PLP Invest/Ejendomme

Tangmosevej 102

Køge

March

3,456

19,500,000

Just Gruppen

K/S Tangmosevej 102, Køge

Solrød Center 66

Solrød Strand

February

2,675

16,300,000

Sandegård

Revisionskontoret TLS

*Estimated price 86 // RED – Danish Investment Atlas 2021

ANNUAL REVIEW

RED acted as sell-side advisor for Patrizia in their sale of Galleri K to Aviva.

Rent level DKK Zone A

Vacancy Q1 2021

Change in vacancy 2020-2021 (%-points)

Amagertorv

33,000

3.09%

-5.57%

Østergade

28,000

5.91%

1.22%

Købmagergade

25,000

28.09%

12.93%

Vimmelskaftet

20,000

16.68%

-2.61%

Nygade

18,000

15.07%

4.14%

Frederiksborggade

14,000

25.25%

14.40%

Frederiksberggade

14,000

17.52%

-13.53%

Kronprinsensgade

11,500

N/A

Berlingske

8,000

N/A

Grønnegade

6,000

N/A

Østerbrogade

3,750

N/A

Gammel Kongevej

3,250

N/A

Nørrebrogade

2,500

N/A

Lyngby

8,000

N/A

OFFICE

Street name

RESIDENTIAL

Retail – Prime rent and vacancy levels Q1 2021

Retail – Yield levels Q1 2021

Copenhagen – Prime high street (Amagertorv, Købmagergade & Østergade)

3.25%

Copenhagen – High street (Vimmelskaftet, Nygade & Frederiksborggade)

3.25%

Copenhagen – Secondary high street (Frederiksberggade)

4.00%

Copenhagen – High street area (Kronprinsensgade)

4.00%

Copenhagen – Østerbrogade

4.25%

Copenhagen – Gl. Kongevej

4.50%

Copenhagen – Nørrebrogade

5.00%

Copenhagen area – Lyngby

4.75%

LOGISTICS

Yield level*

RETAIL

Street name

* In case of share transactions, thís will impact yields due to deferred taxes Source: C&W | RED

HOTEL

Retail // 87

RED carries out the ongoing valuations of Pandox’s Danish hotels.

88 // RED – Danish Investment Atlas 2021

ANNUAL REVIEW RESIDENTIAL

HOTEL HOTEL Hotelsegmentet i 2020 // The Hotel Segment in 2020

RETAIL

LOGISTICS

OFFICE

Pipeline & transaktioner // Pipeline & Transactions

HOTEL

90 92

Hotel // 89

HOTEL – HOTELSEGMENTET I 2020 HOTEL – THE HOTEL SEGMENT IN 2020 Et hårdt år for hotelsegmentet Året 2020 var et særdeles hårdt år for hotelsegmentet� Covid-19 gjorde sit indtog og førte til lukning af de danske grænser i marts 2020� Udenlandske turister og erhvervsrejsende måtte derfor ikke rejse ind i Danmark uden et anerkendelsesværdigt formål� Dette kunne hurtigt mærkes på hotelreservationerne� Fra februar til april faldt antallet af hotelovernatninger i København med 91%, og i april var belægningsprocenten nede på 5% ( figur 58)� Covid-19 havde således mærkbare konsekvenser allerede fra årets start� Statslige kompensationspakker har dog holdt antallet af konkurser i 2020 nede� Som konsekvens af krisen var investorerne tilbageholdende med at foretage investeringer i hotelsegmentet� Dette betød, at transaktionsvolumen i 2020 blot nåede 160 mio� kr�, hvilket svarer til et fald på 96% i forhold til 2019 ( figur 57)� Dette afspejler et afventende marked, hvor transaktionsvolumen forventes at stige, når rejseaktiviteten til og fra Danmark vender tilbage til mere stabile niveauer�

København var hårdest ramt Grundet covid-19 var danskernes rejsevaner i 2020 anderledes end tidligere� Rejserestriktionerne for udenlandsrejser ledte til en stigning i den indenlandske turisme� Dette sås særligt i sommermånederne, hvor belægningsprocenten i Danmark (ekskl� København) var på sit højeste og på et præcovid-19 niveau� Hotelovernatningerne blev særligt foretaget uden for København, hvor belægningsprocenten fra april måned var højere end i København� Dette står i kontrast til før covid-19, hvor belægningsprocenten i København historisk set har været signifikant højere end i resten af landet� Den højere belægningsprocent uden for København kan til dels forklares med, at da Danmarks grænser åbnede delvist d� 15� juni 2020, var det et krav, at turisterne bookede mindst seks overnatninger� Dette havde særlige konsekvenser for de københavnske hoteller grundet den kortere gennemsnitlige længde på de udenlandske besøgendes ophold�

Forventninger til 2021 Danmark, og særligt København, har historisk set været anset som en populær turistdestination� I København var det årlige antal besøgende indtil 2020 stigende� Covid-19 stoppede dog væksten, og turismen i 2020 blev mere end halveret� Det er fortsat uvist hvornår hotelsegmentet vender tilbage til normaliserede forhold� Vi forventer, at den europæiske rejseaktivitet genoptages i løbet af 2� halvår af 2022 i takt med, at udrulningen af vaccinationer fuldendes, og at turismen er tilbage på et mere eller mindre normaliseret niveau primo 2023� Frem til 2028 forventes der at blive tilført næsten 9�000 værelser til hotelmarkedet i København� Da vi forventer, at hotelsegmentet først vender tilbage til et normaliseret niveau fra år 2023, kan de mange planlagte hotelværelser lede til et mindre overudbud i markedet, hvilket kan resultere i konverteringer, til eksempelvis studieboliger, i de kommende år�

Figure 57: Hotel – Transaction volume 2012-2020 5

4.7 24%

BN DKK

3.7 25%

3.0

2.6

24% 2

76%

1.7 1.3

76%

76% 45%

24% 2012

2013

1.5

75% 62%

55%

45%

25%

2014

2015

2016

Source: C&W | RED 90 // RED – Danish Investment Atlas 2021

2.0

Danish

75%

0.2

38% 2017 Foreign

2018

2019

2020

Regardless of covid-19, Denmark, and Copenhagen in particular, is regarded as a popular tourist destination. Until 2020 the trend in Copenhagen was positive, with increases in the annual number of visitors. However, covid-19 stopped this growth, and tourism fell by more than half in 2020. We anticipate that European travel activity will resume in the second half of 2021 as the rollout of vaccinations is completed. Therefore, we expect tourism to be back at more or less normal levels at the beginning of 2022. Almost 9,000 rooms are expected to be added to the hotel market in Copenhagen over the period from 2021 to 2028. As we do not expect the hotel segment to return to normal until 2022, the many planned hotel rooms might lead to an excess supply in the market. One outcome of this excess supply may be conversions, for example to student accommodation, over the next few years.

RESIDENTIAL

ANNUAL REVIEW The tourists mainly stayed at hotels located outside Copenhagen, where the occupancy rate from April was higher than in Copenhagen. This in contrasts to situation before covid-19, where the occupancy rates in Copenhagen historically have been higher than in the rest of the country. Part of the explanation for the higher occupancy rate outside Copenhagen is that when Denmark’s borders were partially opened on the 15th of June 2020 tourists were required to book accommodation for at least six nights. This had a particular impact on the hotels in Copenhagen, due to the shorter average length of the international visitors stay.

Expectations for 2021 It remains uncertain when the hotel segment will return to normal. However, it is expected that a brighter future awaits the industry as a result of the approval, and in particular the rollout, of covid-19 vaccinations.

OFFICE

As a consequence of the crisis, the investors were reluctant to make investments in the hotel segment and therefore the transaction volume totalled only DKK 160m in 2020, which is equivalent to a decrease of 96% from 2019 ( figure 57). This reflects a hesitating market in which the transaction volume is expected to increase when the travel activity to and from Denmark returns to more stable levels.

Copenhagen was challenged the most Due to covid-19 the Danes’ travel habits in 2020 was different than in the past. International travel restrictions led to an increase in domestic tourism. This was particularly apparent in the summer months, where the occupancy rates in Denmark (excluding Copenhagen) was at its highest and at a pre-covid-19 level.

LOGISTICS

A tough year for the hotel segment 2020 was a particularly tough year for the hotel segment as covid-19 lead Denmark to close its borders in March. Foreign tourists and business travellers were therefore not allowed to travel to Denmark without having a recognisable purpose. This was soon reflected in the hotel bookings. The number of overnight stays in hotels decreased with 91% between February and April, and the occupancy rate was as low as 5% in April ( figure 58). Thus, covid-19 had noticeable consequences from very early in the year. Government compensation packages has, however, kept down the number of bankruptcies in 2020.

Figure 58: Hotel occupancy rate 2018-2020 100%

RETAIL

80%

60%

40%

0% Q1 2018

Q2 2018

Q3 2018

Source: Statistics Denmark

Q4 2018

Q1 2019

Q2 2019

Q3 2019

Copenhagen

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Rest of Denmark Hotel // 91

HOTEL

20%

HOTEL – PIPELINE & TRANSAKTIONER HOTEL – PIPELINE & TRANSACTIONS Hotel – New Developments in Copenhagen 2021-2028 Hotel

No. of rooms

Wakeup Borgergade (Expansion)

272

Scandic Nørreport

100

Scandic Spectrum Copenhagen – Kalvebod Brygge

632

Scandic CPH Strandpark

357

Zoku Copenhagen

160

Next House Copenhagen

433

5-øren Guldsmeden Hotel

273

Ørkenfortet Hotel

394

25hours hotel – The Trinity Quarter

243

Total in 2021

186

Holistic House (Apartment hotel)

450

Total in 2022

636

600

V360 – Vanløse

100

Postbyen – Part II (Apartment hotel)

236 80

JOYN Engholmene (Apartment hotel)

248

Nordø – North Harbour

300

Tårnby Torv

Total in 2023

1,664

Papirøen - Christianshavn

128

Hotel Teglholmen

430

Den Franske Skole

Copenhagen Gate M-tower

700

Jernbanegade Hotel

350

Enghave Brygge Midt D Total in 2024

2022

Cabinn Apartments & Metro (Expansion)

Ved Amagerbanen Syd (Apartment hotel)

2021

2,864

Ibis Styles - Nest 45

Drejervej

Delivery

2023

2024

350 2,018

Hotel Nobis - Holmen

294

2025

Radisson Blu Scandinavia (Expansion - Apartments)

400

2026

350-400

2028

H. C. Andersen Adventure Tower Total in 2025-2028

1,069

Total in 2021-2028

8,251

Source: Byggefakta

92 // RED – Danish Investment Atlas 2021

ANNUAL REVIEW RETAIL

LOGISTICS

OFFICE

RESIDENTIAL

Scandic Sluseholmen is one of the hotels valued by RED for Pandox.

Hotel – Top 5 transactions 2020 Area

Date

Size (m2)

Konference- og feriecenteret kysthusene

Gilleleje

January

4,498

Griﬀen Spa Hotel og Fredensborg Badehotel

Rønne

February

Hotel Fjordkroen

Tappernøje

July

Hotel Ny Hattenæs

Silkeborg

Hotel Hedemarken

Grindsted

Price (DKK)

Investor

Vendor

50,000,000*

Private Investor

9,483

37,000,000

Carl Edvard Mogensen Holding

Hotelselskabet Kystvejen

1,062

12,500,000

Bækkeskov Gods

Fjordkroen

November

996

12,000,000

Up & Up Capital

PJL

December

2,940

10,400,000

Jespersen Hotels

Hedeby Gruppen

HOTEL

Asset name

* Estimated price

Hotel // 93

+45 33 13 13 99 // red@cw-red.dk // www.red.dk