RED Investment Atlas 2020

DANISH INVESTMENT ATLAS 2020

28.6 BN DKK

28.6 5.6 47%

BN DKK BN DKK

COPENHAGEN Danish 34% Danish88% 34% Danish

41.9

Foreign12% 66% Foreign

68%

COPENHAGEN AARHUS Foreign 66%

BN DKK

47% 9%

7.6 7.6 9.1 BN DKK

12%

BN DKK

12%

BN DKK

15%

41.9 1.0 41.9 BN DKK

68%

BN DKK BN DKK

2% 68%

ZEALAND Danish 46% Foreign 54%

GREATER COPENHAGEN Danish 70% GREATER COPENHAGEN Foreign 30% OTHER Danish 70% JUTLAND

5.6 BN DKK

Foreign 30% Danish 79%

AARHUS Danish 88% VOLUME Foreign 12%

61.0

9%

Foreign 21% AALBORG Borgmester Christiansens Gade

Danish 58% Foreign 42%

BN DKK

Tingbjerg & Bystævneparken ZEALAND OuterDanish part of46% Nordhavn incl. Levantkaj AALBORG Kulbanevej & 54% Ny Ellebjerg etc.

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

9.1 BN DKK

OTHER JUTLAND Danish 79% Foreign 21%

15%

3.4 5.6 5.6 BN DKK BN DKK

6% 9%

BN DKK

FUNEN AARHUS Danish Danish91% 88% AARHUS Foreign Foreign9%12% Danish 88% Foreign 12%

AARHUS

1.0 BN DKK

AALBORG Danish 100% Foreign 0%

28.6 BN DKK

COPENHAGEN Danish 34% Foreign 66%

47%

2%

9%

JUTLAND

9.1 9.1 BN DKK

15%

BN DKK

OTHER JUTLAND Danish 79% OTHER JUTLAND Foreign 21%

BN DKK

2%

BN DKK

BN DKK

6%

Danish 91% Foreign 9%

7.6 BN DKK

GREATER COPENHAGEN Danish 70% Foreign 30%

12%

ZEALAND

Danish 79% Foreign 21%

FUNEN

15%

1.0 1.0

3.4

FUNEN

AALBORG Danish 100% AALBORG Foreign 0% Danish 100%

41.9 BN DKK

ZEALAND Danish 46% Foreign 54%

68%

Foreign 0%

2%

3.4 3.4 BN DKK

6%

BN DKK

FUNEN Danish 91% FUNEN Foreign 9% Danish 91% Foreign 9%

6% 2 // RED - Danish Investment Atlas 2020

5.6 BN DKK

9%

AARHUS Danish 88% Foreign 12%

Kære læser, Velkommen til ”RED - Danish Investment Atlas 2020” som giver et overblik over de største ejendomssegmenter og handler i det forgange år.

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”.

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.

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

Få over overblik over udviklingen i markedet i

Se den geografiske fordeling og de største investorer i Læse om de største transaktioner i

Få en status på segmentets lejesituation i

Fordybe dig i vores valgte nedslag i markedet i

Læse om vores bud på udviklingen i segmentet i Se de største transaktioner og nøgletal i

”Investeringsmarkedet 2019” ”Volumen og investorer 2019” ”Top 5 transaktioner 2019” ”Lejemarkedet” ”Highlights” ”Forventninger til 2020” ”Transaktioner og nøgletal”

God læselyst

Dear reader, Welcome to “RED – Danish Investment Atlas 2020” which provides an overview of the largest real estate segments and transactions in the previous year.

RED use many resources to collect and verify the data on the individual transactions on the Danish market, and on the coming pages - based on our extensive data and thorough analyses - you can get detailed insight into the Danish market for commercial real estate - segment by segment. 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, retail and hotel segments each have their own sections where you can

Get an overview of developments in the market in “Investment market 2019” See the geographical distribution and the largest investors in “Volume and investors 2019” Read about the largest transactions in “Top 5 transactions 2019” Get a status on the segment’s occupier situation in the “Occupier market” Immerse yourself in our chosen impact in the market in “Highlights” Read about our expectations for the segment in “Expectations for 2020” See the largest transactions and key figures in “Transactions and key figures”

Enjoy the report Nicholas Thurø Managing Partner

28.6 BN DKK

COPENHAGEN Danish 34% Foreign 66%

47%

COPENHAGEN

28.6 BN DKK

COPENHAGEN Danish 34% Foreign 66%

47%

7.6 BN DKK

GREATER COPENHAGEN

GREATER COPENHAGEN

Danish 70% Foreign 30%

12%

7.6 BN DKK

12%

41.9

ZEALAND Danish 46%

GREATER COPENHAGEN Danish 70% Foreign 30%

EXECUTIVE SUMMARY EXECUTIVE SUMMARY

NEDGANG I VOLUMEN, MEN STÆRK AFSLUTNING PÅ ÅRET THE SLOWDOWN CONTINUES, BUT STRONG YEAR-END

I 2019 faldt transaktionsvolumen for andet år i træk, og endte på 61 mia. kr. Sammenholdt med volumen i 2017 som var på 91 mia. kr., er der altså tale om et samlet fald på 34% over to år.

ejendomme kommer i markedet, køber og sælger har forskellige prisforventninger i visse segmenter og de udenlandske investorer er blevet mere forsigtige.

Billedet er dog mere nuanceret end som så. Hårdest ramt er retail-segmentet, hvor volumen er på sit laveste niveau i otte år, og investorerne er blevet mere tilbageholdende. På trods af det generelle fald i transaktionsvolumen, har visse segmenter, som kontor og hotel, dog fortsat set høj aktivitet og været præget af en stærk investorinteresse og faldende afkast; særligt i slutningen af 2019.

Udenlandske investorer søger de sikre investeringer Transaktionerne i Danmark viser, at de udenlandske investorer i overvejende grad søger mod core assets på de sikre placeringer som i Århus og København. I 2019 var hele 81% af den udenlandske kapital placeret i Århus og København, hvorimod blot 52% af den danske kapital var placeret netop her.

Vi ser en modstridende tendens i, at der både på dansk og europæisk plan er allokeret enorme summer til investeringer Total transaction volume 2019 i fast ejendom, men samtidig opleves der faldende transaktionsvoluShare of total BN DKK mener. Dette er drevet af flere faktovolume rer, som blandt andet at færre prime Residential 26.5 43%

The Danish transaction volume has fallen for two consecutive years, and in 2019 the total volume amounted to DKK 61 bn. Comparing this to the 2017 volume of DKK 91 bn, it amounts to a drop of 34% over the course of two years.

Dette viser tydeligt, at de udenlandske investorer ønsker at minimere deres risiko i et marked, hvor flere faktorer i dag medfører en vis usikkerhed, herunder en politisk uro vedr. BRL §5 stk. 2, Brexit, en bekymring for en europæisk recession, samt handelskrigen mellem USA og Kina.

Flere lyspunkter i et presset marked På trods af nedgangen i transaktionsvolumen i det forgange år, har kontor- og hotelsegmenterne set stor aktivitet i 2019. Derudover har prime afkastet for de primære segmenter, kontor og bolig, fortsat været under et nedadgående pres, hvilket understreger en fortsat stor investorinteresse for disse segmenter.

Development from 2018 -25%

Office

18.1

30%

-3%

Retail

4.1

7%

-52%

Industrial

4.1

7%

-36%

2019 var generelt et år med forsigtig aktivitet, men sluttede dog positivt af med flere milliardhandler til rekordlave afkast; særligt indenfor kontorsegmentet.

This clearly shows that foreign investors are seeking to minimize their Hotel 3.7 6% 87% risk in a market where several facOther 0.8 1% 50% tors cause uncertainty, such as political turmoil regarding rent-controlled Total 61.0 100% -21% properties (§5 paragraph 2), Brexit, concerns about a potential Europevolumes. This trend is driven by several factors, an recession and the trade-war between USA and However, the overall picture is more nuanced. The such as a lack of supply of prime properties, buyChina. retail segment has taken the hardest hit, as the ers and sellers having different price expectations retail transaction volume has reached its lowest in certain segments and foreign investors becomSolid core segments in a market under pressure volume since 2012. However, despite the overall ing more cautious.

Despite the decline in transaction volume in the decline in transaction volume, certain segments, previous year, both the office and hotel segments such as office and hotel continued to experience Foreign investors are prioritizing have seen great activity in 2019. Moreover, we have safer investments a high activity and were characterized by strong seen yield compression in the primary segments, investor interest and yield compression; especialThe transactions in 2019 suggests, that the foroffice and residential, which underlines continued ly in late 2019. eign investors are predominantly seeking core strong investor interest in these segments. assets in the biggest cities, Aarhus and CopenWe see a contradictory trend in the fact that both hagen. In 2019, as much as 81% of the foreign in2019 was generally a year of cautious activity, but in Denmark and Europe huge amounts of capital vestments were carried out in Aarhus and Copenended positively with several DKK +1 bn transacare allocated to real estate investments, but at the hagen, while only 52% of the Danish investments tions at record low yields; especially within the ofsame time we experience declining transaction were carried out in these cities. fice segment.

Land

4 // RED - Danish Investment Atlas 2020

3.8

6%

-32%

RESIDENTIAL -37%

2.9

26%

3.0

-38%

Rest of Denmark

10.2

-12%

Total

26.5

-25%

RESIDENTIAL VOLUME

26.5

60 %

Aarhus

10.4

ign 40%

Greater Copenhagen

Investment highlights 2019

Change

nish Da

Copenhagen

Volume

re Fo

Area

BN DKK

Largest deal Axa’s aquisition of the Foreign 40% Solsta Portfolio Danish 60%

Largest investor Koncenton

1.3 3.7

Outlook 2020 Prime rent BN DKK

BN DKK

Prime yield Transaction volume

OFFICE Copenhagen

45%

2.0

-51%

Aarhus

0.8

-75%

Rest of Denmark

2.4

-3%

18.1

-3%

Total

Investment highlights 2019

Change

12.9

OFFICE VOLUME

18.1

Foreign 54 %

Greater Copenhagen

Volume

Danish 46%

Area

BN DKK

Largest deal Niam’s aquisition of Foreign 54% Copenhagen Towers Danish 46%

Largest investor KLP Ejendomme

2.3 3.2

Outlook 2020 Prime rent BN DKK

BN DKK

Prime yield Transaction volume

RETAIL Copenhagen

1.4

-61%

Greater Copenhagen

0.2

-58%

Aarhus

0.6

-57%

Rest of Denmark

1.9

-36%

Total

4.1

-52%

Volume

Change

Copenhagen

2.5

255%

Greater Copenhagen

0.2

-75%

Fo r

RETAIL VOLUME

4.1

h 72%

Change

nis Da

Volume

28% gn ei

Area

Investment highlights 2019 Largest deal Industriens Pension’s aquisiForeign 28% tion of the Regina-Building Danish 72%

BN DKK

Largest investor Industriens Pension

0.5 0.5

Outlook 2020 Prime rent BN DKK

BN DKK

Prime yield Transaction volume

Area

50%

Total

3.7

87%

HOTEL VOLUME

3.7 BN DKK

%

100%

0.8

Investment highlights 2019

77

0.2

Rest of Denmark

% 23

Foreig n

Aarhus

Dan ish

HOTEL Largest deal Midstar’s aquisition of Foreign 77% Copenhagen Admiral Hotel Danish 23%

Largest investor Midstar

1.4 1.9

Outlook 2020 Prime rent BN DKK

BN DKK

Prime yield Transaction volume

5

RED MENER... UDENLANDSK KAPITAL ER GODT FOR DET DANSKE EJENDOMSMARKED Et af de helt store emner i 2019 har ubetinget været den politiske debat omkring et skræddersyet indgreb mod udenlandske investorers opkøb af boligudlejningsejendomme i den ældre boligmasse. Spekulationerne om det endelige udfald af debatten var mange, og den 30. januar 2020 materialiserede de politiske forhandlinger sig i et lovforslag fra den socialdemokratisk ledede regering med opbakning fra Enhedslisten, SF, Alternativet og Dansk Folkeparti. Indgrebet betyder blandt andet, at der fremover vil være en karensperiode på fem år fra købet af en boligudlejningsejendom, hvor lejen er fastsat efter den omkostningsbestemte leje, til den nye ejer må hæve huslejen i forbindelse med modernisering af lejemålene jf. §5 stk. 2 i Boligreguleringsloven.

Dette for at gøre det mindre attraktivt at købe ejendomme med en kortsigtet investeringsstrategi – de facto et indgreb rettet mod udenlandske investeringsfonde.

I hele debatten har det dog været problematisk, at der sættes lighedstegn imellem udenlandske investorer og et generelt problem på særligt det københavnske boligmarked – nemlig adgangen til boliger der kan betales af lav- og mellemindkomstgrupper.

Danskerne ejer mere i udlandet end udenlandske investorer har investeret i Danmark De udenlandske investorer har i de senere år været meget aktive på det danske ejendomsmarked.

Det til trods, er mere end 90% af alle danske boligudlejningsejendomme fortsat ejet af danske ejendomsselskaber, pensionskasser og private danske investorer ifølge brancheorganisationen EjendomDanmark På markedet for boligejendomme var transaktionsvolumen i 2019 på 26,5 mia. kr., hvoraf ca.

40% af ejendommene er opkøbt af udenlandske investorer.

Danmark er en åben økonomi i en global verden, og er i høj grad afhængig af internationale investeringer. Det ses tydeligt hos de danske virksomheder, hvor internationale investorer ejer aktier for mere end 1.350 mia. kr. svarende til næsten halvdelen af den samlede aktiebeholdning i de danske børsnoterede virksomheder. Dette har på intet tidspunkt givet anledning til politisk debat – tværtimod nyder de danske virksomheder og aktionærer godt af et gennemsigtigt og likvidt aktiemarked, hvor man til enhver tid kan købe og sælge aktier.

6 // RED - Danish Investment Atlas 2020

Isoleret set kan man have den holdning, at det er problematisk, men grundlæggende investerer danskerne mere i udenlandske aktiver end udlændinge investerer i danske aktiver. Samlet set ejer udenlandske investorer direkte investeringer og aktier i Danmark for 2.384 mia. kr. Dette er betydeligt mindre end de 3.480 mia. kr. som danskerne ejer direkte investeringer og aktier for i udlandet. Denne mulighed for at foretage en geografisk diversificering nyder eksempelvis de danske pensionskasser godt af, idet dette er medvirkende til at reducere risikoen for de danske pensionsopsparerer.

Hvem kan få en billig bolig?

Det politiske ønske om et udbud af boliger som kan betales af lav- og mellemindkomsterne i storbyerne er velment, men reelt er de boligejendomme, der er underlagt omkostningsbestemt husleje de facto så billige, at de nuværende lejere sjældent fraflytter dem. Det er derfor en illusion at tro, at der rent faktisk er et egentligt udbud af billige boliger i f.eks. København. Disse billige boliger kommer ganske enkelt ikke på markedet uaget det seneste politiske indgreb.

Flytter man til København i håbet om en lejlighed til 6.000 kr. om måneden på Vesterbro, skal man derfor ikke regne med at finde noget. Det skyldes ikke udlejernes nationalitet – det er blot et af resultaterne af reglerne om den omkostningsbestemte husleje, hvor en meget stor del af boligmassen er fastlåst i lave lejeniveauer, der bevirker, at fraflytningsraten er meget lav.

Resten af markedet bliver således tilsvarende dyrere, da udbuddet endnu ikke kan matche efterspørgslen.

Behov for international kapital Siden de udenlandske investorers indtog på det danske ejendomsmarked har vi i branchen oplevet en markant øget professionalisme, et mere likvidt marked og en højere transparens. Fra et uigennemsigtigt marked med få dominerende investorer for 10 år siden, har markedet udviklet sig i en positiv retning, bl.a. gennem krav om større professionalisme fra de udenlandske investorer.

I en by som København, der har været igennem en demografisk udvikling med stor befolkningstilvækst, har der været behov for massivt boligbyggeri og udvikling af den gamle bygningsmasse.

De internationale investorer har i høj grad bidraget til, at boligudbuddet har kunnet imødekomme

efterspørgslen – om end der fortsat efterspørges endnu flere boliger. I den sammenhæng har den socialdemokratiske overborgmester, Frank Jensen, gennem mange år gjort en stor indsats for at tiltrække den nødvendige udenlandske kapital til København.

Tilvejebringelse af boliger som kan betales af lavog mellemindkomstgrupper hænger efter vores mening ikke sammen med investorens nationalitet, og vi kan ikke anbefale, at der bremses for internationale investeringer i udviklingen af de danske byer. Det politiske ønske om flere boliger i en lavere prisklasse løses ikke ved at begrænse international kapital eller muligheden for at modernisere boliger i den ældre boligmasse. Tværtimod kan en begrænsning af udenlandske investeringer medføre mindre konkurrence om investeringerne og dermed tilførsel af færre nye boliger, hvilket på den længere bane øger prisen for den enkelte lejer, såfremt udbuddet af boliger ikke matcher efterspørgslen.

Hvis man fra politisk side ønsker at skabe prisvenlige lejeboliger har man i de seneste 20 år haft alle muligheder herfor, idet stat og kommune har været de største grundsælgere i København i eksempelvis Ørestaden og Nordhavnen. Man kunne have udbudt grunde gratis til den investor, som ville opføre et givent projekt til den lavest mulige leje i en fast og lang periode, f.eks. 50 år. Herefter kunne lejen blive frigivet og investoren kunne betale en købesum for byggegrunden.

Men stat og kommune har solgt byggejord til private investorer til højst mulige markedspriser, hvilket har medvirket til at finansiere vores infrastruktur og udvikle København til glæde for os alle.

En begrænsning af udenlandsk kapital og ændringen i BRL. § 5, stk. 2 skaber ikke flere billige boliger til den almindelige dansker.

Lad os i stedet glæde os over den massive interesse de udenlandske investorer har haft for det danske marked og den dynamik og værdiforøgelse det har medført. Interessen skyldes netop, at vi i Danmark har et solidt økonomisk fundament og politisk stabilitet. Det er ikke en god ny tendens at skræmme både de danske og internationale investorer væk, ved at politikerne skal føre symbolpolitik i et velfungerende og ejendomsmarked.

RED OPINION... FOREIGN CAPITAL IS GOOD FOR THE DANISH CRE The biggest topic of discussion in 2019 was without a doubt the political turmoil regarding policy measures against foreign investors purchasing rent-controlled properties in Denmark. The topic has been debated thoroughly and the 30th of January 2020, political negotiations materialized in a bill drafted by the social democratic government with backing from Enhedslisten, SF, Alternativet and Dansk Folkeparti. Multiple restrictions will be implemented here amongst a waiting period which means that from the purchase-date of a residential property, and five years thereafter, the rent cannot be increased as result of modernizing the apartments according to §5, paragraph 2 of the residential rent regulation act.

The political goal is to make short-sighted investments into residential properties less favorable – it is de facto a regulation directly orientated at foreign investment funds.

An issue with the public debate is the common denominator between foreign investors, and the overall issue of little to no supply of cheap housing opportunities in Copenhagen.

Danish investors are more present abroad than foreign investors are in Denmark Foreign investors have been very active on the Danish CRE market in recent years. Despite this increase in activity, EjendomDanmark has estimated that more than 90% of the Danish residential properties are still owned by Danish real estate companies, Danish pension funds and private Danish investors.

In 2019, the residential transaction volume amounted to DKK 26.5 bn, of which 40% was acquired by foreign investors.

Denmark is an open economy in a global world and depend highly of international investments.

This becomes clear when looking at Danish companies, were foreign investors own stocks worth DKK 1.350 bn, equal to almost half the total stock volume of the publicly listed companies. This fact has never been a cause for concern, and the Danish companies do in fact prosper from a transparent and liquid stock market were anyone has access to buying and selling stocks.

Some might have issues with the number of shares owned by foreign investors, however Danish investors own more foreign stocks than foreign investors own Danish stocks. Foreign investors

own stocks and other assets worth of DKK 2,384 bn, which is substantially less than the Danish investments abroad amounting to DKK 3,480 bn.

The opportunity for geographical diversification of one’s investments is lucrative and used by, amongst others, the Danish pension funds as a mean to decrease risks for the Danish pension holders.

Who can get cheap housing?

The political agenda for a supply of affordable housing for the low- and medium income households in the biggest cities is well meant, however in reality the flats subject to a controlled rent is in fact so cheap that tenants rarely move. Thus, it is delusional to believe, that there is a supply of cheap housing in e.g. Copenhagen. These cheap flats will not be offered in the market regardless of the latest political bill.

People moving to Copenhagen in the hopes of renting a flat for DKK 6,000 per month in the attractive districts surrounding central Copenhagen, should not be surprised when no such flats exist.

The short supply of cheap housing has nothing to do with the nationality of the landlord – but is a result of the legislation surrounding the rent-controlled apartments, as a large part of the residential properties are subject to very low rental levels which causes a very low churn rate.

The remaining residential stock then becomes equally more expensive, as the reduced supply cannot match the demand.

A need for international capital Ever since foreign investors began acquiring Danish properties, the commercial real estate industry has seen an increased professionalism, a more liquid market, and more transparency. Ten years ago, very few investors dominated the market which created an opaque market which has since changed for the better, among other things as result of a demand for more professionalism from the foreign investors.

In a city such as Copenhagen, which has undergone a demographic change with increasing population growth, there have been a need for immense residential development and upgrades in housing quality in the old building stock. The foreign investors have in particular contributed to increasing the residential supply – despite there still being a lack thereof. This is also why the social democratic mayor for Greater Copenhagen, Frank

Jensen, have for multiple years contributed to attract the necessary foreign capital to the Copenhagen market.

The way to increase the supply of flats which are affordable to the low- and medium income households is not related to the nationality of the investor, and we cannot endorse a restriction to foreign capital related to developing the Danish cities. The political goal of increasing affordable housing is not reached by restricting foreign capital or the opportunity to refurbish older flats. On the contrary, a restriction of foreign investments can lead to less competition for investments and thus a reduced supply of new housing which in turn will increase the rental levels for everyone, if the supply continues to lack behind the demand.

If the political goal is to create affordable rental housing in Copenhagen, the opportunity has been right at hand as the government and the municipality have been the single largest vendor of land in e.g. Ørestaden and Nordhavnen. The land could have been given to investors for free provided the properties were erected and operated at the lowest possible rent for a fixed period of e.g. 50 years, where after the rent could be set free and the investor could pay for the land.

Instead, the government has sold the land to private investors at the highest possible price which has contributed to financing our infrastructure and developing Copenhagen for the benefit of the entire population.

A limitation of foreign capital and the change of §5, paragraph 2, does not create more cheap housing for the Danes.

Instead, let us enjoy the overwhelming interest from foreign investors and be happy for the market contribution, dynamics and value-contributions that comes with it. The interest does in fact stem from the solid economic foundation and political stability we enjoy in Denmark. It is not ideal to scare both Danish and foreign investors away from a well-functioning real estate market, as a result of political legislation based on public opinion rather than facts.

7

VORES FORVENTNINGER TIL 2020 EXPECTATIONS FOR 2020

BOLIG // RESIDENTIAL Stor efterspørgsel, fokus på driftsafkast og stagnerende leje // Great occupier demand, focus on operating return and stagnant rent Boligsegmentet som siden 2015 har udgjort det største segment, forventes i 2020 fortsat at være det mest eftertragtede. Om end tempoet er gået ned og den samlede volumen er faldet med godt 26% i 2019, så forventer vi, at boligsegmentet igen vil være det største i 2020. Ved turn-key projekter vil investorerne have fokus på forudsætningerne for casen, og særligt på den forudsatte leje og drift.

Investeringsmarkedet vil være præget af investorer med fokus på det løbende driftsafkast fremfor frasalgscases. Både København samt de 12-15 største byer i Danmark vil være i fokus.

Der forventes fortsat stor efterspørgsel efter lejeboliger i København i 2020.

Boliglejen har flere steder nået sit maksimum, omend der er små ”lommer”, hvor der stadig kan ses stigende lejeniveauer. Muligheden for at der nu kan bygges små boliger ned til 50 m² åbner lejemarkedet for singler og særligt unge mennesker, som er villige til at give køb på kvadratmeterne for at bo i København.

The residential segment, which have been the largest segment since 2015, is still expected to remain the most sought after in 2020. Even if the tempo has slowed and the total volume has decreased by around 26% in 2019, we expect that the residential segment will once again be the largest in 2020.

With turn-key projects, investors will be focusing on the prerequisites for the business case, and in particular, on the assumed rental levels and operating expenses.

The investment market will be characterised by investors focusing on operating returns rather than on divestments. Both Copenhagen and the 12-15 other largest cities in Denmark will be focus areas.

We continue to expect a strong demand for rented housing in Copenhagen in 2020. In several places, rental levels has reached their maximum, even if there are small “pockets” where increasing rental levels can still be seen. The prospect of it being permitted to build homes down to 50 sq m opens up the rental market for singles and, in particular, young people who are willing to sacrifice some square metres in order to live in Copenhagen.

KONTOR // OFFICE Fortsat høj lejerefterspørgsel, lav tomgang og uændret afkast // Continuing strong occupier demand, low vacancy rates and unchanged yields Vi oplever fortsat en høj lejerefterspørgsel i det centrale København, og aktuelt er tomgangen ligeledes på et meget lavt niveau. Udbuddet af gode kontorejendomme i det centrale København er meget begrænset og vi forventer at lejerefterspørgslen fortsat vil være høj, forventeligt med lejestigninger til følge. Dette gør sig dog ikke gældende for kontorer i sekundære områder som ring 3, hvor lejerefterspørgslen er væsentligt mindre.

We are still seeing strong occupier demand in central Copenhagen, and currently vacancy rates are therefore also very low. The supply of good office properties in central Copenhagen are very limited, and we expect the occupier demand to remain strong, and presumably result in increasing rents. This, however, does not apply to offices in secondary areas such as Ring 3, where the occupier demand is significantly weaker.

Afkastniveauerne for kontorer har været faldende i de senere år, og vi forventer at man for de store prime kontorer, centralt i København med økonomisk stærke lejere på lange kontakter, fortsat forventes at kunne sænke grænsen for prime afkastet i København. Udbuddet af sådanne ejendomme er dog sjældne, og der er et relativt fåtal af sådanne ejendomme i markedet.

The levels of yield for offices has been decreasing in recent years, and when it comes to large prime offices in central Copenhagen with strong tenants on long leases, we expect that the limits for prime yields in Copenhagen can be reduced. There is limited supply of such properties though, and relatively few of them are on the market.

8 // RED - Danish Investment Atlas 2020

RETAIL // RETAIL Nuanceret marked, pres på afkast og fokus på oplevelser // Nuanced market, pressure on yields and focus on experiences Vi forventer at der fortsat vil være mange udfordringer indenfor retailsegmentet i 2020, men at det vil være et mere nuanceret billede vi vil se. I 2020 forventer vi at se:

We expect that the retail segment will continue to be challenged in 2020, but it will be a more nuanced picture. In 2020, we expect to see:

F ørste års afkast på de bedste strøgbeliggenheder i København med stærke lejere og gode lejekontrakter vil være uændret i niveauet 3%, mens der vil være et opadgående pres på afkastet, så snart aktivet har en svagere placering eller kræver mere aktiv asset management; også på strøgbeliggenheder.

Fortsat fokus på at skabe mere attraktive shoppingcentre for kunderne ved at skabe et flow gennem F&B, oplevelser, og andre services.

Transaktionsvolumenen i 2020 vil forventeligt blive højere end i 2019 trods usikkerheden i markedet.

T he net initial yields on the best Copenhagen high street locations with strong tenants and strong leases will be unchanged at around 3%, while there will be an upward pressure on the yields as soon as the assets are in less attractive locations or if they require more active asset management this also applies to Copenhagen high street locations.

A continued focus on creating more attractive shopping centres for customers, in order to create a flow between F&B, experiences and other services.

The transaction volume in 2020 will presumably be higher than in 2019, despite the uncertainty surrounding the market.

HOTEL // HOTEL Pres på afkast og fokus på beliggenhed // Pressure on yields and focus on location Mens afkastene falder og værelsespriserne stiger i København, er investeringsaktiviteten fortsat begrænset i provinsen. Hoteller med stærke operatører og lange lejekontrakter i de større provinsbyer er fortsat interessante for en række investorer, mens en mere afsides beliggenhed og managementkontrakter fortsat er vanskelige at sælge.

While yields are decreasing and room prices are increasing in Copenhagen, there is still only limited investments seen outside of the major urban areas.

Hotels with strong operators and long leases in the large provincial cities remain interesting to several investors, while management contracts in more remote locations remain difficult to sell.

Det er ikke vores forventning, at dette billede vil ændre sig i 2020. Investorerne har deres ”fallback” scenarie for øje, når de køber hoteller, og kvadratmeterprisen skal derfor være på linje med beliggenheden, hvorfor det kun er de københavnske hoteller, der kan sælges til de relativt lave afkast. Faldet i afkastkravet for kontorejendomme i 2019 vil smitte af på afkastkravet for hotelejendomme, og det er ikke urealistisk, at vi vil registrere, handler med hotelejendomme til afkast, der bevæger sig under 4%.

We expect this to be the case in 2020 as well. Investors are keeping an eye on their fallback scenarios when they buy hotels, and the price per square meter must therefore match the location. This is why it is only hotels in Copenhagen that can be sold at relatively low yields. The declining yield for office properties in 2019 will also impact the yield demand for hotel properties, and it is not unrealistic that we will register transactions involving yields below 4%.

9

INDHOLD CONTENT ÅRSOVERBLIK // ANNUAL REVIEW Investeringsmarkedet 2019 // Investment market 2019........................................ 12 Volumen & Investorer 2019 // Volume & Investors 2019........................................ 14 Investorerne søger i sikker havn Investors are looking for a safe haven.............................................................................. 16 Fremtidige byudviklingsområder i København Future urban development areas in Copenhagen..................................................... 18 Forventninger til 2020 // Expectations for 2020........................................................ 20

BOLIG // RESIDENTIAL Investeringsmarkedet 2019 // Investment market 2019........................................ 26 Volumen & Investorer 2019 // Volume & Investors 2019........................................ 28 Top 5 transaktioner 2019 // Top 5 transactions 2019.............................................. 30 Lejemarkedet // Occupier market ..................................................................................... 32 Highlights // Highlights............................................................................................................ 34 Forventninger til 2020 // Expectations for 2020........................................................ 36 Transaktioner og nøgletal // Transactions and key figures................................... 40

KONTOR // OFFICE Investeringsmarkedet 2019 // Investment market 2019........................................ 44 Volumen & Investorer 2019 // Volume & Investors 2019........................................ 46 Top 5 transaktioner 2019 // Top 5 transactions 2019.............................................. 48 Lejemarkedet // Occupier market...................................................................................... 50 Highlights // Highlights............................................................................................................ 52 Forventninger til 2020 // Expectations for 2020........................................................ 54 Transaktioner og nøgletal // Transactions and key figures................................... 56

RETAIL // RETAIL Investeringsmarkedet 2019 // Investment market 2019........................................ 60 Volumen & Investorer 2019 // Volume & Investors 2019........................................ 62 Top 5 transaktioner 2019 // Top 5 transactions 2019.............................................. 64 Lejemarkedet // Occupier market...................................................................................... 66 Strøgtælling // High street footfall..................................................................................... 68 Highlights // Highlights............................................................................................................ 70 Forventninger til 2020 // Expectations for 2020........................................................ 72 Transaktioner og nøgletal // Transactions and key figures................................... 74

HOTEL // HOTEL Investeringsmarkedet 2019 // Investment market 2019........................................ 80 Volumen & Investorer 2019 // Volume & Investors 2019........................................ 82 Top 5 transaktioner 2019 // Top 5 transactions 2019.............................................. 84 Highlights // Highlights............................................................................................................ 86 Forventninger til 2020 // Expectations for 2020........................................................ 88 Transaktioner og pipeline // Transactions and pipeline.......................................... 90

11

RED acted as advisor on the letting of offices at Weidekampsgade 14 and following this, RED facilitated the sales process of the property to KLP Ejendomme for DKK 1.085 bn.

Investeringsmarkedet 2019 // Investment market 2019................................ 12 Volumen & Investorer 2019 // Volume & Investors 2019................................ 14 Investorerne søger i sikker havn Investors are looking for a safe haven................................................................. 16 Fremtidige byudviklingsområder i København Future urban development areas in Copenhagen........................................... 18 Forventninger til 2020 // Expectations for 2020.............................................. 20

ANNUAL REVIEW

ÅRSOVERBLIK // ANNUAL REVIEW

OVERBLIK - INVESTERINGSMARKEDET 2019 ANNUAL REVIEW - INVESTMENT MARKET 2019

Den samlede transaktionsvolumen for investeringsejendomme i Danmark er for 2019 opgjort til 61 mia. kr., og dermed reduceret med ca. 21% i forhold til 2018, hvor der blev handlet ejendomme for ca. 77 mia. kr. ( figur 2). Ser vi alene på København er transaktionsvolumen kun faldet fra 31,8 mia. kr. i 2018 til 28,6 mia. kr. i 2019, hvilket svarer til et fald på 10%. Aarhus og Aalborg har oplevet de største fald, hvor transaktionsvolumen i begge byer er reduceret med 49% ( figur 3).

Investorerne fastholder deres andel, men aktiviteten er faldet De danske investorer har fastholdt deres andel af transaktionsvolumen på 58% og har samlet investeret for 35,6 mia. kr. i 2019, hvilket er en nedgang på knap 9 mia. kr. i forhold til 2018. De udenlandske investorer har ligeledes fastholdt deres andel på 42% i 2019.

Investorerne opfatter fortsat det danske ejendomsmarked som attraktivt og nedgangen i investeringsaktiviteten skyldes ikke manglende kapital, men derimod et manglende udbud indenfor bolig segmentet, samt en, i investorernes øjne, for høj prissætning for retailejendomme. Dette medfører, at kapitalen akkumuleres og investorerne afventer,

hvilket vurderes at være en af de primære årsager til nedgangen i transaktionsvolumen.

Transaktionsvolumen for kontorsegmentet er uændret Kontorsegmentet er det eneste af de primære segmenter, der ikke har oplevet et stort fald i investeringsaktivitet. I 2019 blev der handlet kontorejendomme for 18,1 mia. kr., hvilket kun er en nedgang på 3% i forhold til 2018. Det er især de udenlandske investorer, der har været mest aktive med en andel på 54% af transaktionsvolumen i 2019, og hvor kontorsegmentet tidligere har været

domineret af danske investorer, er det således nu for første gang domineret af udenlandske investorer. Særligt kontorejendomme i København har været eftertragtede med en transaktionsvolumen på 12,9 mia. kr., hvilket udgør en stigning på 45% i forhold til 2018. Den store andel af handlede kontorejendomme i København skyldes bl.a. det stærke lejemarked, hvor efterspørgslen efter kontorlokaler på centrale placeringer er høj, hvilket har resulteret i et faldende afkastkrav og dermed øget priserne på prime kontorejendomme.

Figure 1: Danish transactions - Investortype breakdown 2019

VOLUME

61.0 BN DKK

Real estate company 33% Property fund 20% Other 17% Institutional investor 17% Private investor 13% Source: C&W | RED

The total transaction volume for investment properties in Denmark amounted to DKK 61 bn in 2019 and was thus reduced by approx. 21% compared to 2018, where property transactions reached DKK 77 bn ( figure 2). Looking only at Copenhagen, the transaction volume has only fallen from DKK 31.8 bn in 2018 to DKK 28.6 bn in 2019, which is a decrease of 10%. Aarhus and Aalborg have seen the biggest decreases, with volumes decreasing with 49% in both cities ( figure 3).

Investors maintain their share, but activity levels have decreased The Danish investors have maintained their share of the transaction volume on 58% and have invested a total of DKK 35.6 bn in 2019, which is a decrease of almost DKK 9 bn compared to 2018.

The foreign investors have also maintained their 42% share in 2019.

14 // RED - Danish Investment Atlas 2020

Investors continue to perceive the Danish real estate market as attractive, and the decline in investment activity is not due to a lack of capital, but rather to a lack of supply within the primary segments - office and residential, as well as, an in the eyes of the investors, too high pricing on the retail properties. This causes capital to accumulate and investors to hold back, which is considered to be one of the primary reasons for the decline in the transaction volume.

The transaction volume for the office segment remain unchanged The office segment is the only one of the primary segments that has not seen a major decrease in investment activity. In 2019, the transaction volume

for office properties was DKK 18.1 bn, which is only 3% less than in 2018. With a share of 54% of the transaction volume in 2019 the foreign investors in particular have been active, and where the office segment has previously been dominated by Danish investors, it is now for the first time dominated by foreign investors. Particularly office properties in Copenhagen have been in high demand which resulted in a transaction volume on DKK 12.9 bn, which represents an increase of 45% compared to 2018. The large share of office properties traded in Copenhagen is among other things due to the strong occupier market, where the demand for offices on central locations is strong, which has resulted in a decreasing yield level and thus increased prices for prime office properties.

ANNUAL REVIEW

Figure 2: Total Danish transaction volume 2012-2019

100 92.1

80

77.2 68.8

47% 61.0

60 BN DKK

55.2

58% 58% 58%

40 32.3 21.1

20

61%

35.4

64%

53%

69%

2012

42%

36%

39%

31%

2013

2014

20%

0

42%

42%

80%

2015

2016

Danish

Source: C&W | RED

2017

2018

2019

Foreign

Figure 3: Total Danish transaction market - Geographic breakdown 2017-2019

40

35 37% 30 40%

BN DKK

25

34%

20

50%

15

75% 63%

10

55% 60%

81%

66% 59%

5

45%

41%

0 2017

2018

2019

COPENHAGEN Source: C&W | RED

2017

64%

71%

36%

29%

2017

2018

50%

70%

2018

30% 2019

GREATER COPENHAGEN Danish

AARHUS

88%

25%

12% 2019

2017

2018

19% 2019

REST OF DENMARK

Foreign

15

OVERBLIK - VOLUMEN & INVESTORER 2019 ANNUAL REVIEW - VOLUME & INVESTORS 2019

Tre investorer dominerer markedet Færre større handler bemærkelsesværdigt i forhold til 2018. I 2019 er Koncenton var særdeles aktiv i 2019 og investeDer blev i 2019 gennemført 2.193 handler med erder dog blevet gennemført handler over 1 mia. rede i boligudlejningsejendomme for samlet 3,75 hvervsejendomme i Danmark, hvilket er et fald på kr. med en samlet transaktionsvolumen på 7,4 mia. kr. fordelt geografisk over hele landet, hvilket knap 3% i forhold til 2018 ( figur 4). Hvor der har mia. kr. fordelt på 5 transaktioner, hvor der sambringer dem op som den største investor i 2019. været en fremgang af transaktioner mellem 5-50 menlignet med 2018 kun var 4 handler over 1 mia.

På hhv. anden og tredje pladsen er Niam og KLP mio. kr., er det fraværet af handler mellem 50-200 kr. med en samlet investeringssum på 5,6 mia. kr.

Ejendomme at finde. I 2019 har de tre største mio. kr., og i særdeleshed fraværet af de helt store Dette vidner om, at der stadig er store mængder investorer handlet for sammenlagt 10,5 mia. kr., transaktioner mellem 400-1.000 mio. kr., der er kapital allokeret til køb af investeringsejendomme svarende til ca. 17% af den samleog det er således ikke de transaktionsvolumen. Niam har investorinteressen, som investeret i kontor, hotel og bolig har medført den faldenFigure 4: Breakdown in price range 2018-2019 for samlet 3,6 mia. kr. i København de transaktionsvolumen, og KLP Ejendomme har investemen snarere et fravær af Price Range (M DKK) No. of transactions Volumes (M DKK) ret i kontorejendomme for samlet handler under 1 mia. kr.

2018 2019 2018 2019 3,2 mia. kr. i København. grundet et begrænset udbud og i visse tilfælde 0-5 1,279 1,294 2,184 2,094 sælgernes urealistiske 5 - 10 212 224 1,505 1,639 prisforventninger.

10 - 20 159 178 2,256 2,586 20 - 50

220

234

7,033

7,648

50 - 100

191

117

13,725

8,510

Three investors dominate 100 - 200 116 83 15,869 the market 200 - 300 40 33 10,154 Koncenton was very active in 300 - 400 16 12 5,409 2019, investing in residential properties across the country for a 400 - 500 12 5 5,462 total of DKK 3.75 bn, which makes 500 - 1,000 12 8 7,994 them the largest investor in 2019. < 1,000 4 5 5,587 Niam and KLP Ejendomme are, respectively, the second and Total 2,261 2,193 71,591 third-largest investors. In 2019 these three largest investors invested a total of DKK 10.5 bn, corresponding to approx. 17% of the total transwere completed in Denmark, which is a decrease action volume. Niam has invested in offices, hotels of almost 3% compared to 2018 ( figure 4). and residential properties for a total of DKK 3.6 bn While there has been an increase in transactions in Copenhagen and KLP Ejendomme has invested of between DKK 5-50 m, it is the absence of transin office properties for a total of DKK 3.2 bn DKK actions of between DKK 50-200 m and in parin Copenhagen. ticular the absence of the very large transactions between DKK 400 m - 1 bn, which is remarkable Fewer major transactions compared to 2018. In 2019, however, transactions In 2019, 2,193 commercial real estate transactions exceeding DKK 1 bn have been completed with a

11,798

16 // RED - Danish Investment Atlas 2020

8,357 4,098 2,328 4,553 7,389 61,000

total transaction volume of DKK 7.4 bn divided over five transactions.

In comparison, in 2018 there was only four transactions exceeding DKK 1 bn with a total investment volume of DKK 5.6 bn.

This indicates that there is still large amounts of capital allocated to the acquisition of investment properties and thus it is not a lack of investor interest that has led to the decreased transaction volume, but rather the absence of transactions below DKK 1 bn due to a limited supply and in some cases the sellers’ unrealistic price expectations.

ANNUAL REVIEW

Transactions (BN DKK) Areas

2018

2019

Change

Copenhagen

31.8

28.6

-10%

Greater Copenhagen

11.3

7.6

-33%

Other Zealand

4.7

5.7

21%

Funen

3.4

3.4

-1%

Aarhus

10.9

5.6

-49%

Aalborg

2.1

1.0

-49%

Other Jutland

13.0

9.1

-30%

Total

77.2

61.0

-21%

Denmark - Top 10 investors 2019* Investor

Origin

Volume (in M DKK)

No. of transactions

1

Koncenton

DK

3,747

23

2

NIAM

SE

3,598

18

3

KLP Ejendomme

NO

3,196

3

4

PFA Ejendomme

DK

2,273

17

5

Midstar

SE

1,920

2

6

Patrizia

DE

1,848

5

7

Axa

FR

1,554

6

8

Heimstaden

NO

1,522

7

9

Klรถvern

SE

1,420

1

10

CapMan

FI

1,401

28

*if possible portfolios are split into individual transactions

Source: C&W | RED

Denmark - Top 10 investors 2012-2019* Investor

Origin

Volume (in M DKK)

No. of transactions

1

Heimstaden

NO

24,271

126

2

NIAM

SE

17,753

109

3

Patrizia

DE

12,869

45

4

ATP

DK

9,923

25

5

NREP

SE

9,253

52

6

PFA Ejendomme

DK

9,246

54

7

Koncenton

DK

8,934

60

8

Aberdeen Standard Investments

GB

8,580

57

9

Core Bolig

DK

8,373

64

PensionDanmark

DK

8,352

10

*if possible portfolios are split into individual transactions

42 Source: C&W | RED

17

INVESTORERNE SØGER I SIKKER HAVN Historisk set, har det danske ejendomsmarked været drevet af de tre segmenter: retail, kontor og bolig. Væksten i transaktionsvolumen var frem til starten af 2018 drevet af boligsegmentet, som dog siden har oplevet en stort set konstant faldende volumen ( figur 5). Alene i 2019 faldt transaktionens volumen indenfor boligsegmentet med 25%, hvilket blandt andet skyldes den politiske uro omkring boligreguleringslovens (BRL) § 5, stk. 2.

Når volumen falder – stiger Københavns andel Over de seneste 20 år har vi to gange oplevet perioder med kraftige stigninger i transaktionsvolumen i Danmark. Væksten i volumen skyldes gode økonomiske konjunkturer og adgang til fremmedkapital, hvilket især øger transaktionsvolumen udenfor København. Derfor oplever København altid en faldende andel af de samlede investeringer i tider med højkonjunktur, hvilket tydeligt ses i perioden 2005-2008 og igen i 2016-2017 ( figur 6). I 2019 udgjorde Københavns andel af den samlede transaktionsvolumen 47%.

Politisk uro Igennem 2019 har de udenlandske investorers adgang til det danske ejendomsmarked været til

debat som følge af deres investering i den gamle boligmasse, hvilket har medført en stor usikkerhed omkring investorernes fremtidige rentabilitet ved forbedring og modernisering. Debatten om en ændring af BRL § 5 stk. 2, har stået på hele året og har medført en markant nedgang i salget af boligudlejningsejendommene i den gamle boligmasse.

drevet af et fravær af store handler, herunder shoppingcentre og handler med store high street ejendomme i København. I København faldt transaktionsvolumen i retail segmentet i 2019 med 61%, hvilket således efterlader kontorsegmentet som det sidste af de tre største segmenter til at drive aktiviteten på investeringsmarkedet i København.

Den politiske uro rammer særligt det københavnske boligmarked, hvilket skyldes, at der i København er den største andel af gammel boligmasse hvor §5 stk. 2 moderniseringer er rentable. Dermed rammer uroen transaktionsvolumen hårdest i København.

På landsplan var transaktionsvolumen for kontorejendomme stort set uændret i 2019 i forhold til 2018. Men med en stærk slutspurt med fire milliardhandler med en samlet volumen på knap 5,7 mia. kr. i årets sidste måneder steg transaktionsvolumen i kontorsegmentet med hele 45% i København i 2019. Dermed er kontorhandlerne, med en andel på ca. 46% af den samlede volumen i København, den primære årsag til Københavns stigende andel af den samlede volumen i 2019.

Samtidig har udbuddet af nye boligudlejningsejendomme været præget af ”projekter” og ikke af eksisterende ejendomme, hvilket ikke står øverst på investorernes ønskeliste. Disse to faktorer er således den primære årsag til, at boligsegmentet har oplevet en så markant nedgang i 2019.

København drevet af kontorhandlerne Efter endnu et år med nedgang i transaktionsvolumen var volumen i retail segmentet i 2019 på det laveste siden 2012. Denne nedgang er primært

Vi forventer igen i 2020 en markant transaktionsvolumen i København og at 45-50% af den samlede transaktionsvolumen vil være at finde i København. Retail markedet forventes ligeledes at have set sit lavpunkt hvad transaktionsvolumen angår og vi forventer i 2020 at se en opadgående kurve for retail transaktioner.

50 5: Transaction volume for retail, office and residential 2012-2019 (illustrated as 12-month rolling average) Figure

40

BN DKK

30

20

10

0 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 2012

2013

Source: C&W | RED

2014 Office

18 // RED - Danish Investment Atlas 2020

2015 Residential

2016

2017

2018

Retail (excl of the ATP/Danica deal)

2019 Retail

Historically, the Danish real estate market has been driven by the three segments: retail, office and residential. The growth in the transaction volume was driven by the residential segment until the beginning of 2018, which, however, has since experienced an almost constant decreasing volume ( figure 5). In 2019 alone, the transaction volume within the residential segment fell by 25%, which is partly due to the political turmoil surrounding the residential regulation act (BRL) § 5 paragraph 2.

When the volume decreases Copenhagen’s share increases During the past 20 years, we have experienced periods of significant increases in the transaction volume twice in Denmark. The growth in the volume is a result of strong economic trends and access to foreign capital, which particularly increases the transaction volume outside of Copenhagen. Therefore, Copenhagen always experiences a declining share of the total investments in times of economic growth, which is clearly seen in the period 2005-2008 and again in 2016-2017 ( figure 6). In 2019, Copenhagen’s share of the total transaction volume was at 47%.

Political turmoil Throughout 2019, the foreign investors’ access to the Danish real estate market has been debated as a result of their investment in the old housing

stock, which has led to a large uncertainty about the investors’ future profitability in improvements and modernizations. The debate on a change to BRL § 5 paragraph 2, has been going on throughout the year and has led to a significant decrease in sales of rental properties in the old housing stock.

The political turmoil is particularly affecting the residential market in Copenhagen, for the fact that Copenhagen has the largest share of old housing stock where § 5 paragraph 2, modernizations are profitable. As a result, the transaction volume in Copenhagen is affected the most by the turmoil.

At the same time, the supply of new residential rental properties has been characterized by “projects” and not by existing properties, which is not at the top of the investors’ wish list. These two factors are thus the primary reason to why the residential segment experienced such a significant decrease in 2019.

Copenhagen driven by the office transactions After another year with decreases in the transaction volume, the volume in the retail segment in 2019 was at its lowest since 2012. This decline is primarily driven by the absence of large transactions, including shopping centers and transactions with large, high street properties in Copenhagen.

In Copenhagen, the transaction volume in the

retail segment fell by 61% in 2019, thus leaving the office segment as the last of the three largest segments to drive the activity in the investment market in Copenhagen.

Nationally, the total transaction volume for office properties remained largely unchanged in 2019 compared to 2018. However, with a strong final with four transactions exceeding DKK 1.0 bn, with a total volume just below DKK 5.7 bn in the last months of the year - the transaction volume in the office segment increased by 45% in Copenhagen in 2019. With a share of approx. 46% of the total volume in Copenhagen, the office transactions are thus the main reason for Copenhagen’s increasing share of the total volume in 2019.

In 2020, we again expect a significant transaction volume in Copenhagen and that 45-50% of the total transaction volume are to be found in Copenhagen. The retail market is also expected to have hit its lowest in terms of transaction volume and in 2020 we expect to see an upward-sloping curve for the retail transactions.

100

100%

90

90%

80

80% 70% Average share 2012-2016 = 57%

60

60%

50

50% Average share 1992-2005 = 39%

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

0 2000

10%

1999

10

1998

20%

1997

20

1996

30%

1995

30

1994

40%

1993

40

1992

BN DKK

70

COPENHAGEN SHARE

Figure 6: Total transaction volume for Denmark 1992-2019

1992199319941995199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019

Source: C&W | RED

Total transaction volume

Copenhagen as share of the total volume

19

ANNUAL REVIEW

INVESTORS ARE LOOKING FOR A SAFE HAVEN

FREMTIDIGE BYUDVIKLINGSOMRÅDER I KØBENHAVN Befolkningsvækst Investorinteressen for velbeliggende nybyggede boliger og kontorer er fortsat høj, og forventningerne om en fortsat stigende befolkning i København og på Frederiksberg gør det interessant at se på det fremtidige udbud af jord til byudviklingsformål. Ifølge Danmarks Statistik forventes der ca.

75.000 nye borgere i de to kommuner frem mod 2030 og ca. 115.000 nye borgere frem mod 2040.

De interne kommunale prognoser er lidt mere optimistiske, hvor de to kommuner samlet regner med ca. 90.000 nye borgere frem mod 2030.

Forskellen mellem prognoserne kan primært henføres til omfanget af indregning af nybyggeriets betydning for tilflytningen. Københavns Kommune forventer et behov for nybyggeri af boliger på ca. 4 til 4,5 mio. etagemeter, hertil kommer et forventet udlæg af ca. 2 til 2,5 mio. etagemeter erhverv inkl. institutioner og undervisningsfaciliteter.

Byudvikling Samtidig med forventningen om en fortsat befolkningstilvækst, er en række af de nuværende byudviklingsområder i bl.a. Ørestad, Sydhavnen og de indre dele af Nordhavn ved at være fuldt udviklede

og nye områder skal derfor i spil. Københavns- og Frederiksberg Kommune har udpeget en række nye udviklings- og perspektivområder, hvor den fremtidige byudvikling skal foregå, ligesom der også arbejdes med fortætningsmuligheder i de eksisterende bystrukturer.

Ifølge Rækkefølgeplanen for Københavns Kommune som indgår som en del af forslaget til Kommuneplan 2019 er der udpeget byudviklingsområder med et samlet etageareal på ca. 7 til 7,5 mio. etagemeter, hvoraf 4,5 mio. etagemeter er boliger på nuværende tidspunkt ( figur 7). Fordelingen mellem boliger og erhverv må forventes at blive justeret i takt med udviklingen af områderne. En række af områderne i første periode er fremrykket i tid for at imødekomme den forventede efterspørgsel. Nogle af udviklingsområderne, eksempelvis Godsbaneterrænet og Frederiksberg Hospital, må forventes at strække sig over første og anden periode, idet arealerne frigives løbende.

af Nordhavn, Kløverparken og Lynetteholmen som kan bringes i spil, når udviklingen tilsiger det.

Udviklingen af nye og mere decentrale byområder såsom Refshaleøen og Lynetteholmen kræver betydelige investeringer i infrastruktur såsom metro og en Østlig Ringvej (havnetunnel) før områderne har en tilgængelighed, der gør dem attraktive for udviklere og slutbrugerne.

Et tilstrækkeligt udbud af boligjord er nødvendig for at opretholde balancen mellem udbud og efterspørgsel og dermed stabile boligpriser.

Ubalancen mellem udbud og efterspørgsel har i de senere år været en af driverne bag de stigende boligpriser, og der ligger en stor opgave i at sikre boliger, som kan betales af et bredt udsnit af befolkningen. Salg af byggeretter indgår naturligvis som en væsentlig del af finansieringen af den nødvendige infrastruktur i de nye udviklingsområder, men de høje byggeretspriser er samtidig med til at presse prisen på ejer- og lejeboliger op.

Nye områder For at sikre et langsigtet udbud af jord til byudviklingsformål indgår der også en række perspektivarealer, herunder Refshaleøen, den yderste del

Area

20 // RED - Danish Investment Atlas 2020

1

Ørestad

2

Nordhavn

3

Sydhavn

4

Valby

5

Carlsberg

6

East-Amager

7

Borgmester Christiansens Gade

8

Bådehavnsgade

9

Godsbaneterrænet

10

Tingbjerg & Bystævneparken

11

Frederiksberg Hospital

12

Outer part of Nordhavn incl. Levantkaj

13

Kulbanevej & Ny Ellebjerg etc.

14

Godsbaneterrænet

15

Prags Boulevard

16

Northeast-Amager

17

Lynetteholmen

18

Refshaleøen

19

Outermost part of Nordhavn

20

Kløverparken

Population growth The investor interest for well-located new residential properties and offices remains high, and the ongoing population growth in Copenhagen and Frederiksberg makes it interesting to take a brief look at the future supply of greenfield areas for urban development. According to Statistics Denmark, the population growth comprises approx. 75,000 by 2030 and 115,000 by 2040. The municipality forecasts are a bit more optimistic, with an expected increase of approx. 90,000 new residents by 2030.

The divergence is mainly related to the expected impact of the planned construction of new residential units. According to the Municipality of Copenhagen the rising population will entail a demand for approx. 4 to 4.5 million sq m new residential dwellings. The expected demand for office space is expected to entail approx. 2 to 2.5 million sq m inclusive of institutions as well as educational facilities.

Urban development As a consequence of the continued population growth, a number of the current urban development areas like Ørestaden, Sydhavnen and the inner parts of Nordhavn are almost fully developed,

and hence new greenfield areas are required. The municipalities of Copenhagen and Frederiksberg have thus identified areas for future development, divided into short term areas and perspective areas in accordance with the strategic planning. As a supplement to new land schemes possible densification of existing urban areas are implemented.

According to the “development sequence” presented in the draft for Copenhagen Municipality Plan 2019 a total of 7 to 7.5 million sq m (floor space) are planned in the next 10 to 15 years – here of currently 4 to 4.5 million sq m of residential dwellings ( figure 7). In order to meet variations in demand for residential and commercial floor space the distribution is preliminary. Due to the strong current and expected demand for new land for residential projects, a number of the potential urban development areas are brought forward in time. Some of the large and central development areas such as Godsbaneterrænet and Frederiksberg Hospital, are expected to be developed over two planning periods along with the release of the current use.

perspective areas are also included. Areas such as Refshaleøen, the outermost part of Nordhavn, Kløverparken and Lynetteholmen can be activated if demand is prompted. The development of new and more decentralized urban areas such as Refshaleøen and Lynetteholmen requires significant investments in infrastructure such as the Metro and a Eastern Ring Road (harbour tunnel) in order to secure first class accessibility and hence making them attractive for developers and the residents.

ANNUAL REVIEW

FUTURE URBAN DEVELOPMENT AREAS IN COPENHAGEN

A sufficient supply of residential land is also needed to sustain the balance between supply and demand and thus stable house prices. In recent years, the imbalance between supply and demand has been one of the main drivers behind the rising house prices, and there is a major strategic task in securing homes for a wider range of household incomes. The sale of building rights are well known as a significant part of the financing of the necessary infrastructure in the new development areas. However, the high prices on building rights leads to an upward pressure on the price of owner-occupied and rental homes.

New areas In order to ensure a long-term supply of land for urban development purposes, a number of

Figure 7: Planned development areas

2020-2025

Ørestad Nordhavn Sydhavn Valby Carlsberg East-Ama Borgmest Bådehavn Godsbane Tingbjerg Frederiksb Outer par Kulbaneve Godsbane Prags Bou Northeast Lynetteho Refshaleø Outermos Kløverpar

2026-2030

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

2031-

Ørestad Nordhavn Sydhavn Valby Carlsberg East-Amager Borgmester Christiansens Gade Bådehavnsgade Godsbaneterrænet Tingbjerg & Bystævneparken Frederiksberg Hospital Outer part of Nordhavn incl. Levantkaj Kulbanevej & Ny Ellebjerg etc.

Godsbaneterrænet Prags Boulevard Northeast-Amager Lynetteholmen Refshaleøen Outermost part of Nordhavn Kløverparken

0

500,000

Source: C&W | RED

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

SQ M

21

OVERBLIK - FORVENTNINGER TIL 2020 ANNUAL REVIEW - EXPECTATIONS FOR 2020 RED INVESTOR SURVEY Stor investeringsappetit og positive forventninger til 2020 RED har spurgt de største og mest aktive investorer på det danske marked om deres forventninger til 2020. 73% af de adspurgte investorer forventer at øge deres portefølje i 2020 og alene 4% af investorerne forventer at reducere deres portefølje ( figur 8). Sammenlignet med 2019 har investorerne i 2020 i højere grad rettet blikket mod opkøb, og der er således ikke udsigt til, at det i 2020 bliver nemmere at få placeret penge i investeringsejendomme. Samtidig oplever vi fortsat en stor tilgang af nye udenlandske investorer, som ønsker at foretage investeringer på det danske marked, hvorfor konkurrencen om de bedste ejendomme skærpes yderligere.

Investorerne ser positivt på værdien af deres portefølje i 2020, idet hele 97% forventer at vær-

dien vil stige eller være uændret i 2020, hvor kun 3% forventer at værdien vil falde ( figur 9). De positive forventninger er direkte afledt af, at der i slutningen af 2019 blev handlet ejendomme til historiske lave afkast i både kontor- og boligsegmentet for de bedst beliggende ejendomme. Den store efterspørgsel efter prime kontor- og boligejendomme i 2019, som har afledt historiske lave afkastniveauer, forventes at fortsætte ind i 2020, hvor afkastkravet kan komme yderligere under pres og dermed øge priserne.

Direkte adspurgt om hvilke markedsforhold investorer forventer vil påvirke markedsværdien af deres portefølje i 2020, svarer 61%, at de forventer en reduktion af deres tomgang og 44% forventer en stigning i lejeniveauet for deres ejendomme.

Dette stemmer overens med den store lejerefterspørgsel der i markedet efter velbeliggende

kontorer, hvilket presser tomgangen i bund, og dermed giver et opadgående pres på lejen.

Investorerne forventer stadig uændrede finansieringsvilkår Rekordlave renter forblev en realitet igennem 2019, og udmeldinger fra ECB giver ikke anledning til at tro at renteniveauet ændres signifikant i 2020. Dette skaber stabile og gunstige finansieringsvilkår for ejendomsinvestorer, som kan opnå fornuftige afkast på gearede investeringer på trods af rekordlave afkast på både kontor- og boligejendomme. 64% af investorerne forventer uændrede vilkår for finansiering af fast ejendom i 2020, og de resterende respondenter er splittede mellem, om finansieringsvilkårene til finansiering af nye ejendomme eller refinansiering af eksisterende ejendomme skærpes eller forbedres i 2020 ( figur 10).

Figure 8: Investor Confidence Index - Portfolio size

Figure 9: Investor Confidence Index - Portfolio value

What is your objective with regard to the size of your portfolio in terms of acquisition/disposal during 2020?

How do you see the value of your portfolio developing in 2020 (aside from any acquisition/disposal)

100% 100%

100% 100%

60% 60%

100% 100%

73% 73%

100% 100%

100% 100%

Increase: Increase:more moreacquisition acquisitionthan thandisposal disposal

Improving Improving

Stable: Stable:as asmuch muchdisposal disposalas asacquisition acquisition

Unchanged Unchanged

42% 42% 64% 64%

Decrease: Decrease:more moredisposal disposalthan thanacquisition acquisition

100% 100%

9% 9%

18% 18%

Worsening Worsening 64% 64%

80% 80% 53% 53% 34% 34%

33% 33%

23% 23% 6% 6%

4% 4% 2019 2019

2020 2020

22 // RED - Danish Investment Atlas 2020

5% 5%

3% 3% 2019 2019

2020 2020

18% 18%

11% 11% 2019 2019

2020 2020

ANNUAL REVIEW RED INVESTOR SURVEY A large appetite for investments and positive expectations for 2020 RED has asked the largest and most active investors on the Danish market about their expectations for 2020. 73% of the investors responded that they expect to increase their portfolio sizes in 2020, while only 4% of the investors expect to decrease their portfolio sizes ( figure 8). Compared with 2019, investors have increasingly focused on acquisitions in 2020 and thus there is no prospect that it will be easier to acquire investment properties in 2020. At the same time, we are continuing to see a large inflow of new foreign investors who wants to invest in the Danish market, why the competition for the best properties is getting even stronger.

Investors are positive about the value of their portfolio in 2020, with 97% expecting the value to increase or remain unchanged in 2020, while only

3% expect the value to decrease ( figure 9). The positive expectations are directly derived from the fact that, at the end of 2019, prime located properties were traded at historically low yields on both the office and the residential market. The strong demand for prime office and residential properties in 2019, which derived the historically low yield levels, is expected to continue in 2020, where the yield is likely to face further downwards pressure and thus increased property prices.

When asked which market conditions investors expect to affect the market value of their portfolios in 2020, 61% respond that they expect a reduction in their vacancy rates and 44% expect an increase in the market rent for their properties.

This is in line with the strong occupier demand for well-located offices, which pushes the vacancy rates down and thus puts an upward pressure on the rental levels.

Figure 10: Investor Confidence Index - Financing conditions How do you see the value of your portfolio developing in 2020 (aside from any acquisition/disposal)

100% Improving

100%

9%

18%

Improved conditions

Unchanged

Unchanged conditions

Worsening

Worsened conditions 64%

80%

18%

11% 2019

Investors expect unchanged financing conditions Record-low interest rates remained a reality throughout 2019, and ECB announcements do not give reason to believe that interest rates will change significantly in 2020. This creates stable and favourable financing conditions for real estate investors who can make reasonable returns on geared investments despite record-low yields on both office and residential properties. 64% of investors expect unchanged conditions for real estate financing in 2020, and the remaining respondents are divided between whether the financing conditions related to financing of new properties or refinancing of existing properties will be worse or improve in 2020 ( figure 10).

The Cushman & Wakefield | RED Investor Confidence index The Index for Denmark include responses from 70 of the most active investors in Denmark in the years 2018 and 2019. The index monitors expectations from highly active investors in the Danish market for the next six months.

The broad coverage reflects the interest for non-biased objective analyses 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.

2020

23

RED has acted as advisor on the sale of the prominent office building Amaliegade 44 on behalf of the publicly owned real estate company, Freja Ejendomme.

ANNUAL RVIEW

RED facilitated the sale of a turn-key residential property in Hillerød.

The property was bought by Koncenton in 2019.

BOLIG // RESIDENTIAL Investeringsmarkedet 2019 // Investment market 2019................................ 26 Volumen & Investorer 2019 // Volume & Investors 2019................................ 28 Top 5 transaktioner 2019 // Top 5 transactions 2019...................................... 30 Lejemarkedet // Occupier market ....................................................................... 32 Highlights // Highlights........................................................................................... 34 Forventninger til 2020 // Expectations for 2020.............................................. 36

RESIDENTIAL

Transaktioner og nøgletal // Transactions and key figures........................... 40

BOLIG - INVESTERINGSMARKEDET 2019 RESIDENTIAL - INVESTMENT MARKET 2019 Markant fald i transaktionsvolumen Boligsegmentet, der siden 2012 har udgjort det største segment, var med en transaktionsvolumen på 26,5 mia. kr. i 2019 igen det mest handlede segment. I forhold til 2018 hvor transaktionsvolumen udgjorde 35,5 mia. kr., er der i 2019 sket et fald i boligsegmentet på 25% ( figur 12).

Udviklingen kan, i et vist omfang, forklares med den politiske usikkerhed omkring muligheden for lejeregulering efter gennemførsel af en BRL § 5, stk. 2 modernisering, som i første halvår af 2019 stort set eliminerede transaktioner af boligejendomme i den gamle boligmasse.

Danske investorer er igen de mest aktive I 2018 faldt den udenlandske kapital investeret i boliger for første gang i syv år til 18,8 mia. kr., og i 2019 faldt den yderligere til 10,7 mia. kr., svarende til 40% af de samlede boligtransaktioner.

Denne nedgang skyldes primært, at svenske Heimstaden købte massivt op i segmentet i 2017 og 2018, men har næsten været fraværende i 2019 med en investeringsvolumen på kun 1,5 mia. kr.

Derfor var de danske investorer igen de mest aktive

Significant decrease in transaction volume The residential segment, which has been the largest segment since 2012, was once again the most transacted segment in 2019 with a transaction volume of DKK 26.5 bn, however the transaction volume decreased by 25% compared to 2018 ( figure 12).

This development can to some extent be explained by the current political uncertainty surrounding the possibility to regulate the rent after modernising rent-controlled properties (BRL § 5 paragraph 2), which in the first half of 2019 virtually eliminated transactions of residential properties in the old housing stock.

Danish investors are once again the most active In 2018, the foreign capital invested in residential properties amounted DKK 18.8 bn which was the first decrease in seven years, and in 2019 it decreased by another DKK 8 bn to reach DKK 10,7 bn, which amounts to 40% of the total residential transaction volume (figure 12). The decrease is mainly due to Swedish Heimstaden investing heavily in the residential segment in 2017 and 2018

28 // RED - Danish Investment Atlas 2020

i boligsegmentet, og i 2019 investerede de 15,8 mia. kr. svarende til 60% af transaktionsvolumen ( figur 12).

Danske investorer øger fortsat deres investeringer uden for København København har i de senere år været det foretrukne område for udenlandske boliginvesteringer og i 2019 udgjorde København hele 70% af deres samlede investerede volumen.

De danske investorers andel af de samlede boliginvesteringer i Danmark har været svagt faldende fra 16,7 mia. kr. i 2018 til 15,8 mia. kr. i 2019. Den primære andel af disse investeringer har fundet

sted uden for København, hvor volumen i 2019 udgjorde 12,9 mia. kr. (figur 13). Derved er andelen af dansk kapital uden for København steget fra 66% i 2018 til 80% i 2019.

Institutionelle investorer øger aktiviteten Overordnet set, er investeringerne i boligsegmentet i 2019 fortsat domineret af ejendomsfonde, som udgør 52% af den samlede volumen svarende til 13,8 mia. kr. ( figur 11). I 2018 investerede de institutionelle investorer alene 1,7 mia. kr., men i 2019 har de øget deres investeringer til 4,5 mia. kr.

Dette skyldes i høj grad Axa, der foretog den største boligtransaktion i 2019 med et køb af en boligportefølje fra Solstra i Ørestad.

Figure 11: Residential - Investor type breakdown 2019

RESIDENTIAL VOLUME

26.5 BN DKK

Property fund 52% Institutional investor 17% Private investor 14% Real estate company 13% Other 4% Source: C&W | RED

and then greatly decreasing their investments in 2019 to DKK 1.5 bn.

Consequently, Danish investors are once again the most active investors in the residential segment, and in 2019 they invested DKK 15.8 bn or 60% of the transaction volume.

Danish investors continue to increase their investments outside of Copenhagen In the last few years, Copenhagen has been the preferred location for foreign investments in residential properties, and in 2019, Copenhagen represented 66% of their transaction volume.

The Danish investors’ share of the total investments in residential properties in Denmark slightly decreased from DKK 16.7 bn in 2018 to DKK 15.8

bn in 2019. The largest part of these investments has been made outside of Copenhagen, where the transaction volume amounted to DKK 12.9 bn in 2019 ( figure 13). Thus, the share of Danish capital invested outside of Copenhagen increased from 66% in 2018 to 80% in 2019.

Institutional investors are becoming more active Overall, the investments in the residential segment in 2019 remained dominated by property funds, which represents 52% of the total volume or DKK 13.8 bn ( figure 11). In 2018, the institutional investors only invested DKK 1.7 bn, and in 2019 they increased their investments to DKK 4.5 bn. This is very much due to Axa’s activities, which made the largest residential transaction in 2019 with the acquisition of a residential portfolio from Solstra in Ørestad.

Figure 12: Residential - Transaction volume 2012-2019

38.5

40

35.5 35 37%

28.8

30

47%

26.5

20.9

55%

20

60% 57%

15

10 5 0

RESIDENTIAL

BN DKK

25

8.7 78%

10.0

10.4

63%

47%

63% 53% 45%

40%

43% 37%

22% 2012

2013

53%

2014

2015

2016

Danish

Source: C&W | RED

2017

2018

2019

20182018

2019 2019

Foreign

Figure 13: Residential - Investments outside of Copenhagen 2012-2019

14

12

BN DKK

10

8

6

4

2

0 2012 2012 Source: C&W | RED

20132013

2014 2014

2015 2015

2016 2016 Danish

2017 2017

Foreign

29

1.9 10.4 BN DKK BN DKK

FUNEN COPENHAGEN Danish 97% Danish 28% Foreign 3% Foreign 72%

BOLIG - VOLUMEN & INVESTORER 2019 7% 39%

COPENHAGEN

RESIDENTIAL - VOLUME10.4 & INVESTORS 2019 Danish 28% Foreign 72%

BN DKK

39%

2.9 0.6 BN DKK

11%

GREATER COPENHAGEN Danish 61% AALBORG Foreign Danish 39% 100% Foreign 0%

BN DKK

3%

2.9

GREATER COPENHAGEN Danish 61% Foreign 39%

BN DKK

11%

2.5

5.2

Danish 85% Foreign 15%

BN DKK

20% RESIDENTIAL VOLUME

26.5

Danish 60% Foreign 40%

BN DKK

AALBORG

ZEALAND

JUTLAND

Danish 81% Foreign 19%

BN DKK

9%

2.5

ZEALAND Danish 81% Foreign 19%

BN DKK

9%

3.0

AARHUS

10.4

Danish 75% Foreign 25%

BN DKK

BN DKK

11%

39%

AARHUS

3.0

JUTLAND

BN DKK

COPENHAGEN

10.4 10.4

Danish 28%

Foreign 72% BN DKK

BN DKK 39% 39%

AARHUS

COPENHAGEN COPENHAGEN Danish 28% Danish 28% Foreign 72% Foreign 72%

Danish 75% GREATER COPENHAGEN

Foreign 25%

11%

5.2 BN DKK

1.9

JUTLAND

BN DKK

7%

Danish 97%

2.9

Foreign 3%

11%

FUNEN

Danish 85%

BN DKK

GREATER COPENHAGEN

2.9 2.9

Danish 61%

Foreign 39% BN DKK

BN DKK 11% 11%

Foreign 15%

20%

1.9 BN DKK

FUNEN

GREATER COPENHAGEN GREATER COPENHAGEN Danish 61% Danish 61% Foreign 39% Foreign 39% COPENHAGEN

ZEALAND

Danish 97% Foreign 3%

7%

FUNEN

0.6 BN DKK

AALBORG

BN DKK

9%

5.2

Danish 100% Foreign 0%

BN DKK

3%

2.5 2.5

Danish 81%

Foreign 19% BN DKK JUTLAND BN DKK 9% 9% Danish 85%

ZEALAND ZEALAND Danish 81% Danish 81% Foreign 19% Foreign 19%

Foreign 15%

20%

0.6 BN DKK

3% 30 // RED - Danish Investment Atlas 2020

2.5

ZEALAND

AALBORG

5.2

Danish 100% Foreign 0%

3.0 BN DKK

11%

3.0 3.0

Danish 75%

Foreign 25% BN DKK

BN DKK 11%

Danish 85%

Foreign 15% 20% AARHUS AARHUS Danish 75% Danish 75% Foreign 25% Foreign 25%

BN DKK

AARHUS

JUTLAND

Source: C&W | RED

Koncenton, som var den mest aktive investor i 2019, har fokus på alle større byer i Danmark, hvor de køber nyopførte boligejendomme. Her kan bl.a. nævnes København/Storkøbenhavn, Aalborg, Vejle, Horsens, Silkeborg m.m.

Patrizia og Axa har derimod primært deres fokus på boliger i København og Storkøbenhavn. I 2019 foretog Patrizia en enkelt investering i Aarhus og de resterende i København, mens Axa foretog samtlige investeringer i København og Storkøbenhavn.

Residential transactions (BN DKK) Area

2018

2019

Change

Copenhagen

16.6

10.4

-37%

Greater Copenhagen

2.3

2.9

26%

Zealand

2.7

2.5

-9%

Funen

1.8

1.9

6%

Aarhus

4.9

3.0

-38%

Aalborg

1.3

0.6

-53%

Jutland

5.8

5.2

-10%

35.4

26.5

-25%

Total

RESIDENTIAL

Årets mest aktive investorer 2019 De mest aktive investorer i 2019 var Koncenton, Patrizia og Axa, som med 7 mia. kr. tilsammen tegnede sig for 27% af den samlede transaktionsvolumen, fordelt på 33 transaktioner. I 2018 udgjorde de tre største investorer 42% af de samlede boliginvesteringer i Danmark, og de største investorer udgjorde i 2019 således en mindre andel af de samlede transaktioner.

Source: C&W | RED

The most active investors of 2019 The most active investors of 2019 were Koncenton, Patrizia and Axa, and their transactions combined constituted DKK 7 billion or 27% of the total transaction volume, distributed across 33 transactions. In 2018, the three most active investors represented 42% of the total residential investments in Denmark, and the most active investors in 2019 thus accounted for a smaller proportion of the total transactions.

Koncenton, which was the most active investor in 2019, focuses on all the major cities in Denmark where they buy newly constructed residential properties. This include cities such as Copenhagen/Greater Copenhagen, Aalborg, Vejle, Horsens, Silkeborg, etc. while Patrizia and Axa mainly focuses on residential properties in Copenhagen and Greater Copenhagen. In 2019, Patrizia made a single investment in Aarhus, while the rest were in Copenhagen - and Axa only invested in Copenhagen and Greater Copenhagen.

Residential - Top 5 investors 2019* Investor

Origin

Volume (in M DKK)

No. of transactions

1

Koncenton

DK

3,700

23

2

Patrizia

DE

1,848

5

3

Axa

FR

1,548

5

4

Heimstaden

NO

1,522

7

5

Niam

SE

1,200

14

*if possible portfolios are split into individual transactions

Source: C&W | RED

Residential - Top 5 investors 2012-2019* Investor

Origin

Volume (in M DKK)

No. of transactions

1

Heimstaden

NO

24,271

126

2

Patrizia

DE

9,518

27

3

Koncenton

DK

8,772

59

4

Core Bolig

DK

8,061

60

5

Niam

SE

7,593

*if possible portfolios are split into individual transactions

82 Source: C&W | RED

31

BOLIG - TOP 5 TRANSAKTIONER 2019 RESIDENTIAL - TOP 5 TRANSACTIONS 2019 Photo: Bellakvarter

1: SOLSTRA PORTFOLIO In June 2019, Solstra sold a portfolio with four residential properties located in Ă&#x2DC;restaden to Axa at a price of DKK 1.3 bn. The portfolio consists of a total of 397 flats and has a total area of 12,100 sq m. Three of the properties are newly erected and fully occupied, while the last property is under construction and will be ready for occupancy in the summer of 2020.

Price DKK:

Investor:

1,300,000,000

Axa

Sq m:

Vendor:

12,100

Solstra

Photo: Ă&#x2026;rstiderne Arkitekter

2: BOSTAD PORTFOLIO As part of Bostads strategy on expanding and improving the quality of residential properties in Danish regional cities they acquired four turn-key residential projects from Birch Ejendomme in December 2019. The four projects are located across Jutland (Silkeborg, Kolding & Vejle) and consists of a total of 553 units with a mix of townhouses and apartments. The selling price for the four residential projects was DKK 1.122 bn.

32 // RED - Danish Investment Atlas 2020

Price DKK:

Investor:

1,122,000,000

Bostad

Sq m:

Vendor:

46,293

Birch Ejendomme

Photo: TopDanmark

3: ØSTERLUNDEN 26, 28 & 30

Price DKK:

Investor:

630,000,000

TopDanmark

Sq m:

Vendor:

20,040

Humlebo Gruppen

RESIDENTIAL

During 2019 the Danish pension fund TopDanmark acquired approximately 240 apartments in the new residential area Østerlunden in Odense. The properties will be ready for occupancy in the beginning of 2020. TopDanmark acquired the properties from the developer, Humlebo Gruppen, at a price of approximately DKK 630 m.

Photo: FB Gruppen

4: GRØNTTORVET 8 The American property fund Invesco entered the Danish real estate market in October 2019 with an investment in a residential property with 191 apartments, located on Grønttorvet 8 in Valby. The property is currently under construction and the 16,000 sq m residential property will be ready for occupancy in December 2020. Invesco acquired Grønttorvet 8 from the developer, FB Gruppen, at a price of DKK 520 m.

Price DKK:

Investor:

520,000,000

Invesco

Sq m:

Vendor:

16,000

FB Gruppen

Photo: Visit Silkeborg, Per Pedersen

5: BACH GRUPPEN PORTFOLIO In November 2019, the Swedish property fund Niam acquired a residential portfolio from Bach Gruppen at a price just below DKK 500 m. The portfolio consists of approximately 300 residential units and has a total area of 24,000 sq m. The properties are primarily town- and double houses, located across growth cities in the central part of Jutland (Silkeborg, Randers & Karup). The residential portfolio has a total area of 24,000 sq m. Niam made the investment with a focus on the running cash flow rather than getting an increase in value.

Price DKK:

Investor:

490,000,000

Niam

Sq m:

Vendor:

24,000

Bach Gruppen

33

BOLIG - LEJEMARKEDET RESIDENTIAL - OCCUPIER MARKET Urbaniseringen er større end nogensinde før Ifølge den Internationale Organisation for Migration (IOM) forventes antallet af byboere at stige fra 3,9 milliarder i 2016 til 6,4 milliarder i 2050. Det betyder, at to ud af tre i år 2050 vil være bosat i en by. Definitionen af, hvad der udgør en by, varierer fra land til land, men ifølge IOM er minimumsgrænsen i de fleste lande mellem 1.000 og 5.000 indbyggere.

Urbaniseringen sker også i Danmark. I langt de fleste danske kommuner faldt folketallet i kommunernes små byer (inkl. landdistrikterne) med op til 5% pr. 1. januar 2019 sammenlignet med 2010.

Nye udviklingsområder Urbaniseringen betyder, at der er pres på boligudviklingen først og fremmest i København, men også i Aarhus og øvrige større byer i Danmark.

I København er der stadig stor byggeaktivitet. I

takt med at de store udviklingsarealer som Ørestad, Sluseholmen og Teglholmen er færdigudviklet, skal nye områder såsom de ydre dele af Nordhavn, Bådehavnsgade, Borgmester Christiansens Gade, Frederiksberg Hospital og Godsbaneterrænet m.fl. i spil. Derudover er der fortsat mulighed for fortætning i de eksisterende byområder.

I et forsøg på at sprede befolkningen omkring storbyerne, specielt i København og Aarhus, etableres varig offentlig transport (f.eks. letbaner). Det betyder, at omegnskommunerne kan og vil tillade boliganvendelse i stationsnære områder til letbanestationerne. Pendlingen bliver lettere og totaløkonomien for en familie kan skæres til, ved kun at have én bil eller helt at undvære bil.

For København er det vores forventning, at byudviklingsområder langs letbanerne bliver et billigere alternativ til det centrale København,

Urbanisation is more extensive than ever before According to the International Organisation for Migration (IOM), it is projected that the number of urban residents around the world will increase from 3.9 bn in 2016 to 6.4 bn in 2050. This means that by 2050, two-thirds of all the people on the planet will be living in a city. The definition of a city varies from country to country, but for most countries, IOM defines a city as having at least 1,000 5,000 inhabitants.

cities in Denmark. There are still a lot of construction going on in Copenhagen. As the major development areas such as Ørestad, Sluseholmen and Teglholmen become fully developed, new areas such as the outer areas of Nordhavn, Bådehavnsgade, Borgmester Christiansens Gade, Frederiksberg Hospital, Godsbaneterrænet, etc. will need to be utilised. In addition, there are still opportunities to increase the densification in current urban areas.

Urbanisation is also taking place in Denmark. In the vast majority of municipalities on Zealand and Funen, and in some municipalities in Jutland, small cities (including rural districts) lost approximately 5% of their inhabitants in the period from 2010 to 1st of January 2019.

In an attempt to spread the inhabitants around the major cities, particularly in Copenhagen and Aarhus, there new public transportation (e.g. light rail networks) is being constructed. This means that the suburban municipalities can and will allow homes to be built in areas near these light rail stations. As a result, it will become easier to commute and family finances can be improved by only needing one car - or not needing one at all.

New development areas As a result of the urbanisation the development of the housing market will continue to be characterised by a lack of supply - first and foremost in Copenhagen, but also in Aarhus and the other large

34 // RED - Danish Investment Atlas 2020

For Copenhagen, we expect that the urban development areas along the light rail stations will

ligesom vi ser, at der vil ske en vis udflytning fra København til omegnskommunerne, særligt for lavindkomstgrupperne.

Udvikling i lejeboligpriser Lejepriserne i storbyerne i Danmark, samt i de tætte omegnskommuner til storbyerne, er steget mere end reallønnen de seneste år. Der er således en ”prismæssig” disharmoni mellem udbud og efterspørgsel, idet der er en grænse for, hvad en lejer kan/vil betale i husleje. Det befolkningen er villig til at betale i husleje kaldes boligbyrden.

Investorer og udviklere oplever, at familieboliger til en månedlig husleje på kr. 15.500 + forbrug er svære at udleje. Vi ser en flad udvikling i lejeboligpriserne i København, Aarhus, Aalborg og Odense, mens der ses mindre stigninger i de nært beliggende omegnskommuner.

become a cheaper alternative to living in the city centre, and we are also expecting to see some relocation from Copenhagen to the suburban municipalities - especially for the low-income segments.

Development of residential rental prices The rental level in Denmark’s largest cities and the nearby suburban municipalities have increased more than inflation-adjusted wages in the last few years. Therefore, there is a mismatch in pricing between supply and demand, as there is a limit to what a tenant can or will pay in rent. What people in an area are willing to pay in rent is called the ‘rent burden’. Investors and developers are seeing that family homes with a monthly rent of DKK 15,500 + utilities are difficult to let out. We are experiencing a flat development in residential rental levels in Copenhagen, Aalborg and Odense, while slight increases are expected in the nearby suburban municipalities.

Residential - Prime market rent Q1 2020 Rent level DKK

1

Copenhagen City

2,000 - 2,200

2

Copenhagen E, W & N

1,800 - 2,000

3

Copenhagen NW

1,500 - 1,700

4

Copenhagen S

1,700 - 1,900

5

Frederiksberg

2,000 - 2,200

6

North Harbour

1,900 - 2,100

7

South Harbour

1,600 - 1,800

8

Valby

1,700 - 1,900

9

Vanløse

1,500 - 1,700

*Excl. service charges

RESIDENTIAL

Subarea

Source: C&W | RED

35

RESIDENTIAL - HIGHLIGHTS RESIDENTIAL - HIGHLIGHTS Fokus på certificering og verdensmål Der er generelt et større ønske om at opføre bygninger, hvor der kan opnås en DGNB-certificering, mens der samtidig tages hensyn til FNs 17 verdensmål.

Fokus er på at udvikle blandede boligformer, således der skabes en social bæredygtighed samt den rigtige sammensætning af boligformer, der for eksempel tager højde for beskæftigelse, alder, indkomst og uddannelse.

Vi tror, at fremtidens lejere og investorer vil stille krav til, at nybyggeri skal være DGNB certificeret.

Investorerne vil forventeligt være villige til at acceptere et marginalt lavere afkast, og dermed en højere pris for en ejendom, som er certificeret, ligesom vi tror på en højere lejesikkerhed på certificerede bygninger.

Focus on certification and the UN Sustainable Development Goals Generally, there is a greater desire in constructing buildings that can be DGNB certified while at the same time respecting the 17 UN Sustainable Development Goals.

The focus is on developing mixed housing forms so that social sustainability is created and the right composition of housing is achieved which, for example, takes employment, age, income and education into account.

We believe that the tenants and investors of the future will demand that new constructions are DGNB certified. Investors will presumably be willing to accept a marginally lower yield and therefore a higher price for a property that is certified, and we also believe that it will be easier to let out certified buildings.

36 // RED - Danish Investment Atlas 2020

For udviklere er det derfor vigtigt at tænke DGNB-certificering ind fra start, således at der kan forventningsafstemmes med slutinvestor omkring, hvilken certificering der skal være tale om.

Udviklingsmuligheder i Storkøbenhavn I takt med udviklingen af de allerede udlagte udviklingsområder i storbyerne, bliver det stadig mere vanskeligt at finde grunde til udvikling centralt i storbyerne. Som én af flere løsninger herpå, har staten og flere kommuner besluttet at skabe varige offentlige transportformer i og i nærheden af storbyerne. Eksempler herpå er letbanerne i København, Aarhus og Odense. Pendling til og fra de centrale bydele gøres derved lettere.

Langs Ring 3 Letbanen i København skabes der mulighed for at udvikle stationsnære områder med en kombination af bolig, erhverv og retail.

For developers, it therefore becomes important to consider a DGNB certification from the start so that expectations can be reconciled with the final investor as to what certification should be pursued.

Opportunities for development in the Greater Copenhagen area As the development of the already designated development areas in the major cities proceeds, it becomes increasingly difficult to find greenfields for development. One of the solutions offered by the state and several municipalities is the decision to develop permanent public transportation networks in and around the major cities. For example, the light rail network in Copenhagen, Aarhus and Odense, which makes it easier to commute to and from the city centre.

Along the projected Ring 3 light rail in Copenhagen, new opportunities arise to develop residential,

Udviklingen skal ske i samarbejde med de enkelte kommuner, og udviklingen kan ske i form af konvertering af eksisterende ejendomme til anden anvendelse eller ved nybyg. Der er endnu ikke et overblik over de samlede udviklingsmuligheder, men af et fælles udspil fremgår det, at der i de 11 kommuner langs letbanen planlægges opført 20.000 nye boliger frem mod 2025 og 10.000 i de efterfølgende år frem mod 2035. Alt i alt vil det give plads til 70.000 flere borgere de næste 12-15 år.

Såfremt udviklingstakten bliver som planlagt, vurderes det, at der vil ske en vis udflytning fra de centrale bydele til de nærliggende omegnskommuner. Uagtet at der kommer flere boliger til i nævnte periode, er det vores forventning, at lejepriserne vil være uændrede til let stigende.

commercial and retail projects. The development should take place in collaboration with the local municipalities and it can take place either by converting existing properties or erecting new buildings. There is not yet an overview of the development opportunities, but a joint proposal states that there will be built 20,000 new homes by 2025 in the 11 municipalities along the light rail and 10,000 more by 2035s. In total, this will create homes for more than 70,000 additional residents in the next 12-15 years.

If the pace of development proceeds as planned, it is assessed that there will be some migration from centrally located district the nearby suburban municipalities. Regardless of whether more homes will be built in the abovementioned periods, we expect that rental levels will either be unchanged or increase slightly.

WHAT IS A DGNB CERTIFICATION?

22.5% Sociocultural and Functional Quality

22% Environmental Quality

Site Quality

10% Process Quality

22.5% Technical Quality

With an internationally recognised DGNB certification, the developer can provide documentation that a building has been constructed in a presided sustainable quality. The certification highlights the buildings lifecycle cost and environmental profile and ensures that social parameters such as interior climate, comfort and safety are top priorities in the construction. Equally important, a sustainable construction project creates attractive workplaces, well-being, comfort for its residents and ensures a good learning environment for buildings used for teaching.

In order to obtain a DGNB certification, a construction or urban area is evaluated on a number of criteria related to the five main areas of DGNB: environmental quality, economic quality, social quality, technical quality and process quality.

RESIDENTIAL

22.5% Economic Quality

On the basis of this evaluation, the project will earn either a silver, gold or platinum certification.

FACTS ABOUT THE RING 3 LIGHT RAIL NETWORK IN COPENHAGEN I t reaches from Ishøj in the south to Lundtofte in the north and traverses nine suburban municipalities and connects them to Copenhagen.

11 municipalities and the Capital Region of Denmark are behind the Greater Copenhagen Light Rail project.

There will be 29 stations. The light rail will, among other things, stop at six S-train stations and create new opportunities across the Greater Copenhagen area.

The light rail line is 28 km long in total.

56 minutes and an average speed of 30 km/h, with a top speed of 70 km/h.

Completed in 2025 - work has already begun.

Total budget is DKK 5.3 bn (including an investment budget of DKK 3.7 bn).

It is expected to carry 13-14 million passengers.

WHAT ARE THE 17 UN SUSTAINABLE DEVELOPMENT GOALS? The Sustainable Development Goals represent 17 concrete goals and 169 sub-goals. They commit all of the 193 UN member states to completely eliminate poverty and hunger in the world, reduce inequality, ensure a good education and better health for everyone in addition to decent jobs and a more sustainable economic growth.

They are thus focused on promoting peace and security and strengthening institutions and international partnerships.

The new agenda also recognises that social, economic and environmental development, peace as well as security and international collaboration are closely connected and that it will require an integrated effort to achieve sustainable development results.

37

RESIDENTIAL - FORVENTNINGER TIL 2020 RESIDENTIAL - EXPECTATIONS FOR 2020 Forventninger til boliglejen Uagtet at renten fortsat er lav, så udgør de restriktive udlånsregler, som finanstilsynet indførte i 2016, stadig en hæmsko for særligt førstegangskøberne på boligmarkedet. I 2016 blev det indført, at låntager skal lægge 5% i udbetaling, og at den samlede gæld maksimalt må være 4,5 gange den årlige husstandsindkomst.

Mulighed for mindre boliger Københavns Kommune har gjort op med den traditionelle tanke om boligstørrelser, således der kan sikres et varieret udbud af nye boliger. Dette betyder, at 50% af etagearealet af nye boliger skal være mindst 95 m² i gennemsnit. De øvrige 50% kan disponeres frit, dog må ingen boliger være mindre end 50 m².

Disse restriktioner medfører, at der stadig er god efterspørgsel på lejeboliger i København og i de omkringliggende kommuner. Vi forventer, at boliglejen i det centrale København og på de bedre sekundære beliggenheder, vil være stagnerende til let stigende i 2020. Lejen i omegnskommunerne forventes at være let stigende. Når det er sagt, er lejepriserne for de største lejligheder allerede under pres, og stigningen i lejeniveauerne forventes derfor at være forholdsmæssig størst for de mindre lejligheder.

Denne mulighed forventes at blive udnyttet, således at boligerne bliver mindre og dermed nominelt billigere, så boligefterspørgslen kan imødekomme behovet fra familier, par og unge, som ønsker en dele-bolig i København.

Expectations for residential rental levels Despite the fact that interest rates remain low, the restrictive lending rules the Danish Financial Supervisory Authority introduced in 2016 are still a challenge for first-time buyers on the housing market in particular. The rules state that a borrower must come up with a 5% down payment and that the total loan cannot exceed 4.5 times the annual household income.

Opportunity for smaller housing units The Municipality of Copenhagen have distanced themselves from traditional thinking on home sizes in order to ensure a diverse supply of new apartments. This means that 50% of the floor space in new apartments must be at least 95 sq m on average. The remaining 50% can be used as the developer want to, however, no units can be less than 50 sq m.

As a result of these restrictions there is still a strong demand for rental homes in Copenhagen and in the surrounding municipalities. We expect that the rental levels in central Copenhagen and on the better secondary locations will be stagnant to slightly increasing in 2020. Likewise, the rental levels in the surrounding municipalities are expected to be slightly increasing. However, with that said, the rental levels for the largest apartments are already under pressure, and an increase in the rental levels is therefore expected to be proportionally largest for the smaller apartments.

This opportunity is expected to be exploited, making units smaller and therefore nominally cheaper, so that the housing demand can comply with the needs from families, couples and individuals (particularly young people) who want to share a home in Copenhagen.

38 // RED - Danish Investment Atlas 2020

ejerlejlighedspriser. I 2019 var priserne i starten af året let stigende, og var mere eller mindre uændrede i løbet af året ( figure 14).

I RED Investor Survey har vi spurgt til forventningerne til udviklingen i ejerlejlighedspriserne, og i undersøgelsen primo 2019, forventede 38% af investorerne ingen ændring i priserne, mens 45% forventede et mindre fald i priserne. Dette er blevet afløst af mere positive forventninger til prisudviklingen, og primo 2020 forventer godt 50% af de adspurgte mindre prisstigninger, 29% forventer ingen ændring, og kun 14 % forventer mindre prisfald. Investorerne er altså mere optimistiske nu, end i starten af 2019 ( figur 15).

Investorerne forventer svagt stigende ejerlejlighedspriser Siden 2012 er ejerlejlighedspriserne i København næsten fordoblet, en udvikling som i 2018 blev afløst af stagnerende og let faldende

Investors are expecting slight increases in freehold flat prices Since 2012, the freehold flat prices in Copenhagen have almost doubled, a trend that in 2018 was replaced by stagnant and slightly decreasing prices.

In the beginning of 2019, the prices were slightly increasing, and remained more or less unchanged during the year ( figure 14).

In the RED Investor Survey, we asked about the expectations for the development in freehold flat prices, and from the responses we received at the beginning of 2019, we saw that 38% of investors expected prices to remain unchanged while 45% expected a small decrease. This have been replaced by more positive expectations for prices, and primo 2020 approximately 50% of the respondents said that they expect minor increases, 29% expect prices to remain the same and only 14% expect a small decrease. This shows that investors are now more optimistic than they were in the beginning of 2019 ( figure 15).

Figure 14: Residential - Development of sq m prices for freehold flats, index 100=2010 190 180 170

RESIDENTIAL

160 150 140 130 120 110 100 90 2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Source: C&W | RED

Figure 15: Investor Confidence Index - Residential prices What is your opinion on the development of the Danish residential prices (Freehold flats DK: Ejerlejligheder) for 2020?

Prices to go up with at least 5%

Prices to go up between 0.1-4.9%

Unchanged

Prices to go down between 0.1-4.9%

Prices to go down with at least 5%

0% Source: C&W | RED

10%

20%

30% Q1 2019

40%

50%

Q1 2020

39

Stagnerende ejerlejlighedspriser – hvad betyder det for investeringsejendommene?

Prisen på nyopførte ejerlejlighedsopdelte boligudlejningsejendomme afhænger af en kombination af beliggenhed, leje, drift, afkast samt ejerlejlighedspriserne i området. Jo større rabat man kan få til ejerlejlighedsmarkedet, jo lavere afkast kan investorerne acceptere, da der er udsigt til en fremtidig fortjeneste ved frasalg af de enkelte lejligheder (alt andet lige).

I de senere år har vi oplevet kraftigt stigende priser på boligudlejningsejendomme i takt med at huslejeniveauet, såvel som ejerlejlighedspriserne, er steget. I det opadgående marked med stor efterspørgsel har investorerne accepteret en mindre og mindre rabat i forhold til ejerlejlighedspriserne, og vi har kendskab til handler hvor m²-prisen som udlejningsejendom svarer til ejerlejlighedspriserne.

Vi forventer fortsat stor efterspørgsel efter boligudlejningsejendomme i 2020, uagtet udsigten til stagnerende leje og ejerlejlighedspriser. Vores forventning er, at investorerne fortsat er indstillet på at erhverve nye boligudlejningsejendomme til relativt lave afkast som følge af den fortsat lave rente og fornuftige realkreditfinansiering. Investorerne vil i højere grad end tidligere have sikkerhed for lejeniveauet, enten i form af verifikation af lejeniveauer i nærområdet eller i form af lejegarantier fra sælger.

Hvem køber i 2020?

De danske investorer køber boliger for at opnå et stabilt afkast, frem for fokus på fortjeneste ved

at afkastkravene vil stige, ca. 55% forventer at afkastet vil forblive uændret samt 32% forventer at afkastkravene vil falde ( figur 18).

FORVENTNINGER TIL 2020 Boligsegmentet som siden 2015 har udgjort det største segment, forventes i 2020 fortsat at være det mest eftertragtede. Om end tempoet er gået ned og den samlede volumen er faldet med cirka 25% i 2019, så forventer vi, at boligsegmentet igen vil være det største i 2020. Ved turn-key projekter vil investorerne have fokus på forudsætningerne for casen, og særligt på den forudsatte leje og drift.

RED INVESTOR SURVEY Investorerne forventer en uændret lejerefterspørgsel i 2020 RED foretager to gange årligt en forventningsundersøgelse blandt de største og mest aktive investorer i Danmark.

Investeringsmarkedet vil være præget af investorer med fokus på det løbende driftsafkast fremfor frasalgscases. Både København samt de 12-15 største byer i Danmark vil være i fokus.

Da vi foretog undersøgelsen primo 2019, forventede 60% af investorerne ingen eller lille ændring i lejeefterspørgslen, mens 21% forventede en lavere efterspørgsel. Primo 2020 er investorerne en smule mere positive idet 68% forventer, at lejeefterspørgslen vil være på samme niveau som i det forgange år og 27% forventer, at lejeefterspørgslen vil stige ( figur 16).

Der forventes fortsat stor efterspørgsel efter lejeboliger i København i 2020. Boliglejen har flere steder nået sit maksimum, omend der er små ”lommer”, hvor der stadig kan ses stigende lejeniveauer. Muligheden for at der nu kan bygges små boliger ned til 50 m² åbner lejemarkedet for singler og særligt unge mennesker, som er villige til at gå på kompromis med kvadratmeterne for at bo i København.

Investorerne forventer faldende afkast Kigger man på afkastforventninger på boligudlejningsejendomme, så forventede 68% af investorer primo 2019 uændrede afkast, mens resten var delte mellem om afkastet ville stige eller falde. Forventningerne primo 2020 viser, at flere investorer er blevet positive, eftersom kun ca. 13 % forventer

Figure 16: Investor Confidence Index - Residential occupier demand

Figure 17: Investor Confidence Index - Residential yields

With regard to the occupier market for residential space during 2020, the demand on the occupier market will:

With regard to the development of yields for residential properties during 2020, market yields will:

100% Q1 2020

løbende frasalg af ejerlejligheder. I et marked med stagnerende ejerlejlighedspriser, kan det være svært for den investor, som investerer med henblik på løbende frasalg, at opnå det ønskede afkast på egenkapitalen, som ofte er højere end kravet fra en core investor, der alene fokuserer på driftsafkast. Vi forventer, at de mest aktive boliginvestorer i 2020 både bliver danske og udenlandske investorer, som fokuserer på driftsafkast fremfor frasalgscases.

19%

100% 100% 19%

Q1 2019

100%

100% Improve Improve 17% 27% Show little or Show no change little or no change

27%

Worsen 60%

60%

21%

21% Q1 2019

68%

Q1 Q12020 2019

68%

100% 100% 17%

100% Increase 13%

13%

Remain stableRemain stable

Worsen

Decline 55%

55% 68%

68%

14%

14%

32% 5%

5% Q1 2020

40 // RED - Danish Investment Atlas 2020

Increase

Q1 2019

Q1 Q12020 2019

32% Q1 2020

Decline

In recent years, we have seen rapidly increasing prices on residential rental properties as both the rental levels and the freehold flat prices have increased. In this growing market with high demand, the investors have accepted a smaller and smaller discount compared to freehold flat prices, and we know of transactions where the square meter price for rental properties are equal to those of the freehold flats.

We expect a continued strong demand for residential rental properties in 2020, regardless of the prospect of stagnating rents and freehold flat prices. We expect that investors will continue to be comfortable with acquiring new residential rental properties at relatively low yields due to the current low interest rates and good financing conditions. However, investors will, to a greater extent than before, demand rental level security, either from verification of rental levels in the immediate areas or in the form of rental guarantees from the seller.

Who is buying in 2020?

The Danish investors acquire properties to obtain stable yields rather than profits from ongoing sales of freehold flats. In a market with stagnating freehold flat prices, it may be difficult for the investor whose investment strategy is to get profits from ongoing sales to obtain the desired return on equity â&#x20AC;&#x201C; which is often higher than the requirement from a core investor who only focuses on operating returns. We expect that the most active investors in residential properties in 2020 will be the Danish and foreign investors who are focusing on operating returns rather than ongoing sales.

RED INVESTOR SURVEY Investors expect unchanged occupier demand in 2020 Twice a year, RED conducts an expectation survey among the largest and most active investors in Denmark.

When we conducted the survey at the beginning of 2019, 60% of the investors expected little to no change in the demand for rental properties, while 21% expected decreasing demand. At the beginning of 2020, investors were slightly more positive as 68% expects that the occupier demand for rental properties will be at the same level as last year and 27% expects the occupier demand to increase ( figure 16).

Investors expects decreasing yields If we look at the yield expectations for residential rental properties, 68% of investors expected

unchanged yields primo 2019, while the rest was split as to whether the yields would increase or decrease. The expectations primo 2020 show that more investors have become positive, as only 13% expect the yield to increase, approximately 55% expect the yields to remain unchanged and 32% expect the yields to decrease ( figure 17).

EXPECTATIONS FOR 2020 The residential segment, which have been the largest segment since 2015, is still expected to remain the most sought after in 2020. Even if the pace has slowed down and the total volume has decreased by around 25% in 2019, we expect that the residential segment will once again be the largest in 2020. With turn-key projects, investors will be focusing on the prerequisites for the business case, and in particular, on the assumed rental levels and operating expenses.

The investment market will be characterised by investors focusing on operating returns rather than on ongoing sales. Both Copenhagen and the 1215 other largest cities in Denmark will be in focus.

We continue to expect a strong demand for rental properties in Copenhagen in 2020. In several places, rental levels have reached their maximum, even if there are small â&#x20AC;&#x153;pocketsâ&#x20AC;? where increasing rental levels can still be seen. The prospect of it being permitted to build homes down to 50 sq m opens up the rental market for singles and, in particular, young people who are willing to sacrifice some square metres in order to live in Copenhagen.

The Cushman & Wakefield | RED Investor Confidence index The Index for Denmark include responses from 70 of the most active investors in Denmark in the years 2019 and 2020. The index monitors expectations from highly active investors in the Danish market for the next six months.

The broad coverage reflects the interest for non-biased objective analyses 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.

41

RESIDENTIAL

Stagnating freehold flat prices - what does this mean for investment properties?

The price of newly developed rental properties depends on a number of factors, such as location, rent, operating expenses, yields and prices of freehold flats in the area. The greater the discount you can receive in relation to the freehold flat market, the lower yields the investors are willing to accept, as there is the prospect of future profits from selling the individual flats (all other things being equal).

BOLIG - TRANSAKTIONER OG NØGLETAL RESIDENTIAL - TRANSACTIONS AND KEY FIGURES

Residential - Top 30 transactions 2019 Asset name

Area

Date

Investor

Vendor

1

Solstra Portfolio

Copenhagen S

June

12,100

2

Bostad Portfolio

Across Nation

December

46,293

1,300,000,000

Axa

Solstra

1,122,000,000

Bostad

Birch Ejendomme

3

Østerlunden

Odense C

October

20,040

4

Grønttorvet (BF8)

Valby

October

16,000

630,000,000

TopDanmark

Humlebo Gruppen

520,000,000

Invesco

5

Bach Gruppen Portfolio

Across Nation

November

FB Gruppen

24,000

490,000,000

NIAM

Bach Gruppen

6

Gammel Køge Landevej 22A

Valby

November

12,598

490,000,000

Patrizia

Keystone Investment Management & Europa Capital

7

Njalsgade 181

Copenhagen S

November

11,408

475,000,000

Invesco

Bach Gruppen

8

Portfolio with 9 units

Across Nation

December

22,682

470,000,000

Lægernes Pensionskasse

Patrizia

9

Kirkegårdsvej 8B m.fl.

Århus C

May

11,064

370,000,000

Formuepleje Ejendomme

Private investor

10

Valby Maskinfabrik

Valby

December

9,000

360,000,000

Patrizia

Europa capital

11

Gl. Køge landevej 4

Valby

February

9,100

350,000,000

Aberdeen Standard Investments

Keystone Investment Management & Europa Capital

12

Montagehalsvej

Valby

March

8,902

345,000,000

Patrizia

Keystone Investment Management & Europa Capital

13

Amager Strandvej 130

Copenhagen S

January

8,640

340,000,000

Patrizia

Arkitekt Gruppen

14

Njalsgade 90

Copenhagen S

January

7,900

336,000,000

Heimstaden

Bach Gruppen

15

Saltholmsgade 22

Århus C

September

8,700

315,000,000

Patrizia

Private investor

16

Filippa Haven

Valby

June

9,080

300,000,000

Catella

Core Bolig

17

Lokesvej 17

Åbyhøj

June

8,400

300,000,000

Catella

AabyCity Holding

18

Spotorno Allé 14

Taastrup

September

11,980

290,000,000

Koncenton

KPC

19

Kanslergade 12-18 m.fl.

Copenhagen E

June

10,633

280,000,000

PFA Ejendomme

Private investor

20

Kastelsvej 18

Copenhagen E

April

9,836

278,000,000

Heimstaden

Institutional Investor

21

Irmavej 20-32

Rødovre

February

7,207

246,000,000

Axa

Private investor

22

Udbyhøjvej 29

Randers NØ

July

12,500

240,000,000

NIAM

Birch Ejendomme

23

Banebyen

Viborg

January

11,000

240,000,000

PFA Ejendomme

Ejegod Ejendomme

24

Pilehøj 2-10 m.fl.

Birkerød

June

9,455

230,000,000

Heimstaden

NIAM

25

Østbrovej 2A-G & 6

Glostrup

June

8,084

230,000,000

Heimstaden

NIAM

26

Strandvejen 272a-278b

Charlottenlund

Jun

12,919

220,500,000

Thylander Gruppen

Private investor

27

Carlsbergvej 24 (Ramblaen 1)

Hillerød

May

8,000

210,000,000

Koncenton

Arkitektgruppen

28

Vestervang 25A

Århus C

October

11,800

210,000,000

Private investor

NREP

29

Bjælderbæk 1-21 m.fl.

Kolding

December

17,429

210,000,000

Danske Boligejendomme (PFA, Industriens Pension, Thylander)

Real estate company

30

Munkeengen 4

Hillerød

December

7,118

203,000,000

Core Bolig

Wihlborgs

42 // RED - Danish Investment Atlas 2020

Size sq m

Price DKK

RESIDENTIAL Residential - Prime market rent and yield levels Q1 2020 Subarea

Rent level DKK

Yield*

1

Copenhagen City

2,000 - 2,200

3.25%

2

Copenhagen E, W & N

1,800 - 2,000

3.50%

3

Copenhagen NW

1,500 - 1,700

4.25%

4

Copenhagen S

1,700 - 1,900

3.50%

5

Frederiksberg

2,000 - 2,200

3.50%

6

North Harbour

1,900 - 2,100

3.25%

7

South Harbour

1,600 - 1,800

3.75%

8

Valby

1,700 - 1,900

3.50%

9

Vanløse

1,500 - 1,700

3.75%

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

RED acted as advisor on the letting process of Christen Hus in Carlsberg Byen which is now fully let.

KONTOR // OFFICE Investeringsmarkedet 2019 // Investment market 2019................................ 44 Volumen & Investorer 2019 // Volume & Investors 2019................................ 46 Top 5 transaktioner 2019 // Top 5 transactions 2019...................................... 48 Lejemarkedet // Occupier market........................................................................ 50 Highlights // Highlights........................................................................................... 52 Forventninger til 2020 // Expectations for 2020.............................................. 54

OFFICE

Transaktioner og nøgletal // Transactions and key figures........................... 56

KONTOR - INVESTERINGSMARKEDET 2019 OFFICE - INVESTMENT MARKET 2019

Fortsat stabil investeringsvolumen Siden 2016 har kontorvolumen fastholdt et højt og stabilt niveau på over 18 mia. kr., og er således det andet største segment i Danmark målt på transaktionsvolumen. Transaktionsvolumen for kontorsegmentet toppede i 2016, og har sidenhen kun oplevet marginale udsving, senest med et fald på ca. 3% fra 2018 til 2019. ( figur 19) På trods af et mindre fald i den totale transaktionsvolumen, formår kontorsegmentet således at fastholde en høj investeringsaktivitet. Samlet set udgjorde kontorinvesteringerne i år en rekordhøj andel af den samlede transaktionsvolumen, med ca. 30% mod knap 23% i 2018.

Udenlandske investorer fokuserer på København For første gang dominerede de udenlandske investorer af kontormarkedet med en samlet volumen på 9,8 mia. kr., hvilket udgjorde 54% af transaktionsvolumen i 2019 mod 34% i 2018 ( figur 19).

Kontorinvesteringer er særligt eftertragtet i København, og udgjorde hele 71% af kontorvolumen

Transaction volume remains stable Since 2016, the transaction volume in the office segment has remained high and stable and have exceeded DKK 18 bn every year, and therefore represents the second largest segment in Denmark in terms of transaction volume. The office transaction volume peaked in 2016 and has since only experienced minor fluctuations - most recently a 3% decrease from 2018 to 2019 ( figure 19).

Despite a minor decrease in the total transaction volume, the office segment continues to experience strong levels of investment activity. In 2019, the office segment represented a record-high share of the total transaction volume, reaching 30% compared to approximately 23% in 2018.

Foreign investors are focusing on Copenhagen For the first time, foreign investors dominated the office segment, with a total investment volume of DKK 9.3 bn equivalent to 54% of the transaction volume in 2019. In comparison, this share was at

46 // RED - Danish Investment Atlas 2020

i 2019 mod kun 47% i 2018. De udenlandske investorer købte næsten udelukkende i København, hvilket udgjorde hele 93% af deres volumen i 2019 mod 59% i 2018.

Kapitalen er fortsat centreret omkring København og især prime kontorer i det centrale København er populære, hvor der er opnået rekordlave afkast i andet halvår af 2019. Det primære fokus på København fra investorerne har omvendt medført en tilbagegang i resten af Danmark, hvor Århus har oplevet en nedgang i transaktionsvolumen på

75% og nu kun udgør 5% af den samlede volumen i 2019, mod 17% i 2018 ( figur 20).

Ejendomsselskaber er stadig de mest aktive Selvom vi i 2019 har oplevet et fald i andelen af ejendomsselskaber som investorer, udgør denne investortype fortsat den største andel på 32%. Faldet skal ses i sammenhæng med en stigning i institutionelle investorer, som primært er drevet af norske KLP Ejendommes høje aktivitetsniveau ( figur 18).

Figure 18: Office - Investor type breakdown 2019

OFFICE VOLUME

18.1 BN DKK

Real estate company 32% Institutional investor 26% Property fund 21% Other 11% Private investor 10% Source: C&W | RED

34% in 2018 (figure 19). Office investments in Copenhagen are in particularly in high demand and constituted 71% of the transaction volume in 2019, compared to only 47% in 2018. The foreign investors focused on Copenhagen, which represented 93% of their investments in 2019 - compared to 59% in 2018.

The invested capital continues to be centred within the Copenhagen area. It is especially office assets in prime locations in the centre of Copenhagen, where record low yields have been registered in the second half of 2019. The primary focus on Copenhagen have resulted in a declining activity elsewhere in Denmark. Aarhus experienced a

decrease in the transaction volume of 75%, and now only represents 5% of the total volume in 2019 - compared to 17% in 2018 ( figure 20).

Real estate companies remain the most active Despite a decrease in the transaction activity from real estate companies in 2019, this type of investor remains the most active with a share of 32%.

This decrease must be viewed in the context of an increase in the volume from institutional investors, mainly driven by the Norwegian investor KLP Ejendomme’s high level of activity ( figure 18).

Figure 19: Office - Total transaction volume 2012-2019

20

19.0

18.5

18.7

18.1

15.3 15 46%

55% 61%

BN DKK

11.4

66%

68%

10

6.6

84%

4.6

5

92% 0

54%

45%

92%

39%

32%

8%

8%

2012

2013

34%

16% 2014

2015

2016

Danish

Source: C&W | RED

2017

2018

2019

Foreign

OFFICE

Figure 20: Office - Historic geographic breakdown 2017-2019

15

12 29%

92%

BN DKK

9

92%

58%

6 70%

92%

71%

3

53%

52%

47%

48%

39%

42% 30% 0 2017

2018

2019

COPENHAGEN Source: C&W | RED

2017

2018

85%

87%

15%

13%

2019

2017

GREATER COPENHAGEN Danish

100%

61% 100%

2018 AARHUS

2019

2017

75%

86%

25%

14%

2018

2019

REST OF DENMARK

Foreign

47

12.9 BN DKK

Danish 29% Foreign 71%

71%

KONTOR - VOLUMEN & INVESTORER 2019 GREATER OFFICE - VOLUME &COPENHAGEN INVESTORS 2019 COPENHAGEN

12.9 2.0 BN DKK BN DKK

71% 11%

1.1 2.0 BN DKK BN DKK

11% 6%

1.1 0.8 BN DKK BN DKK

6%

Danish Danish 29% 85% Foreign Foreign 71% 15%

OFFICE VOLUME

OTHER GREATER ZEALAND COPENHAGEN Danish Danish 85% 85% Foreign Foreign 15% 15%

18.1

Danish 46% Foreign 54%

BN DKK

OTHER ZEALAND AARHUS Danish 85% Danish 100% Foreign 15% Foreign 0%

5%

12.9 BN DKK

AARHUS

JUTLAND

0.8 1.3 BN DKK

5% BN DKK

71%

BN DKK 71% 71%

Foreign 0% 86% Danish Foreign 14%

2.0 11%

7%

Foreign 71% BN DKK

COPENHAGEN COPENHAGEN Danish 29% Danish 29% Foreign 71% Foreign 71%

GREATER COPENHAGEN

BN DKK

BN DKK

12.9 12.9

Danish 29%

AARHUS JUTLAND & FUNEN Danish 100%

7%

1.3

COPENHAGEN

JUTLAND & FUNEN Danish 86%

GREATER COPENHAGEN

2.0 2.0

Danish 85%

Foreign 15% BN DKK

BN DKK 11% 11%

GREATER COPENHAGEN GREATER COPENHAGEN Danish 85% Danish 85% Foreign 15% Foreign 15% COPENHAGEN

ZEALAND FUNEN

Foreign 14%

1.1 BN DKK

6%

OTHER ZEALAND

1.1 1.1

Danish 85%

Foreign 15% BN DKK

BN DKK 6% 6%

OTHER ZEALAND OTHER ZEALAND Danish 85% Danish 85% Foreign 15% Foreign 15%

Source: C&W | RED

48 // RED - Danish Investment Atlas 2020

0.8 BN DKK

5%

AARHUS

0.8 0.8

Danish 100% Foreign 0% BN DKK

BN DKK 5%

AARHUS AARHUS Danish 100% Danish 100% Foreign 0% Foreign 0%

Udenlandske investorer sidder på milliardhandlerne Årets fire milliardhandler blev alle gennemført af udenlandske investorer, og der hersker ingen tvivl om, at udenlandske investorer har sat et stort aftryk på det danske kontormarked. Særligt den norske pensionskasse KLP Ejendomme har været aktive på det danske marked, og dominerede årets kontorhandler med tre investeringer på samlet 3,2 mia. kr., heriblandt to milliardhandler på Weidekampsgade (Deloitte- og Simcorp-bygningen). Samtidig fastholder svenske Klövern og NIAM stadig et højt engagement i det danske marked med en samlet volumen på ca. 3,2 mia. kr. i 2019. Årets største danske investor er PensionDanmark med tre handler til en samlet værdi på 0,8 mia. kr.

Area

2018

2019

Copenhagen

8.9

12.9

45%

Greater Copenhagen

4.2

2.0

-51%

Other Zealand

0.5

1.1

103%

Aarhus

3.2

0.8

-75%

Jutland & Funen

1.9

1.3

-32%

18.7

18.1

-3%

Total

Change

Source: C&W | RED

OFFICE

Foreign investors behind the billion kroner transactions This year’s four transactions exceeding one billion (DKK) were all made by foreign investors, and there is no doubt that foreign investors have a major impact on the Danish market for office properties. It is in particular the Norwegian pension fund, KLP Ejendomme, which has been active on the Danish market. KLP Ejendomme dominated this year’s office transactions by making three investments totalling DKK 3.2 bn, including two billion-kroner transactions on Weidekampsgade (the Deloitte and Simcorp building). At the same time, Swedish Klövern and NIAM maintained their high levels of engagement in the Danish market with a combined transaction volume equal to DKK 3.2 bn in 2019. The largest Danish investor of the year was PensionDanmark, with three transactions totalling DKK 0.8 bn.

Office transactions (BN DKK)

Office - Top 5 investors 2019* Investor

Origin

Volume (in M DKK)

No. of transactions

1

KLP Ejendomme

NO

3,196

3

2

NIAM

SE

1,785

2

3

Klövern

SE

1,420

1

4

PensionDanmark

DK

827

3

5

Viscop

DK

684

6

*if possible portfolios are split into individual transactions

Source: C&W | RED

Office - Top 5 investors 2012-2019* Investor

Origin

Volume (in M DKK)

No. of transactions

1

NIAM

SE

7,100

30

2

PensionDanmark

DK

6,500

25

3

Jeudan

DK

5,200

33

4

Klövern

SE

4,400

8

5

Wihlborgs

SE

4,000

*if possible portfolios are split into individual transactions

34 Source: C&W | RED

49

KONTOR - TOP 5 TRANSAKTIONER 2019 OFFICE - TOP 5 TRANSACTIONS 2019 Photo: PR

1: COPENHAGEN TOWERS The iconic property complex Copenhagen Towers, located in ร restaden, was sold to the Swedish investor Niam in September 2019. Copenhagen Towers consists of three towers, comprising two office buildings and a hotel building. With a total selling price of DKK 2.3 bn (DKK 1.75 bn for the office part) Copenhagen Towers was the largest transaction on the Danish real estate market in 2019. The vendor was the British property fund, Solstra. The office property has a total area of 54,000 sq m and is among others let to tenants such as Novo Nordisk, Vestas and the Danish tax authorities.

Price DKK:

Investor:

1,750,000,000

NIAM

Sq m:

Vendor:

54,000

Solstra

Photo: Estate

2: KALVEBOD BRYGGE 32 In December 2019, the Swedish real estate company, Klรถvern, bought an office building on Kalvebod Brygge 32 in Copenhagen from the Swedish property fund, Genesta, at a price of DKK 1.42 bn. The property, which was erected in 1967 is currently undergoing a total refurbishment. When the refurbishment is finished the property will consist of approximately 31,700 sq m of modern offices. The largest tenant in the building will be Kammeradvokaten.

50 // RED - Danish Investment Atlas 2020

Price DKK:

Investor:

1,420,000,000

Klรถvern

Sq m:

Vendor:

31,700

Genesta

Photo: Deloitte

3: DELOITTE HQ As a part of an ambition towards increasing their Danish real estate portfolio, the Norwegian investor KLP Ejendomme acquired Deloitte’s head quarter in December 2019. The Deloitte office is located on Weidekampsgade 6 in Copenhagen. The building has approximately 36,800 sq m offices and is fully let to Deloitte. The selling price of the office building was DKK 1.4 bn.

Price DKK:

Investor:

1,400,000,000

KLP Ejendomme

Sq m:

Vendor:

36,835

Deloitte

Photo: C&W // RED

4: SIMCORP HQ

Price DKK:

Investor:

1,085,000,000

KLP Ejendomme

Sq m:

Vendor:

26,104

Langebro Eiendom

OFFICE

Earlier in 2019 KLP Ejendomme acquired another office property located on Weidekampsgade. The office property on Weidekampsgade 14 was acquired from the investor Langebro Eiendom at a price of DKK 1.085 bn. The property has a total area of 26,104 sq m and is currently let to tenants such as Simcorp, VP Securities and Gen Re. The acquisition of the two office properties on Weidekampsgade covers KLP Ejendomme’s desire to increase their exposure in the City Center and are good supplements to their other office properties in Copenhagen’s development areas.

Photo: Carlsberg Byen

5: EC HANSEN HOUSE In May 2019, KLP Ejendomme acquired the office property EC Hansen House located in the attractive development area, Carlsberg Byen. EC Hansen House is currently under construction and will be finished in 2021. When the property is finished it will consist of 16,000 sq m office. The IT-company, Visma, will move in on a 10-year lease agreement. The property was acquired from Carlsberg Byen Ejendomme at a price of DKK 711 m.

Price DKK:

Investor:

711,000,000

KLP Ejendomme

Sq m:

Vendor:

16,000

Carlsberg Byen Ejendomme

51

KONTOR - LEJEMARKEDET OFFICE - OCCUPIER MARKET Stor efterspørgsel efter kontorer i det centrale København 2019 var præget af stor aktivitet, som vi forventer fortsætter i 2020. En lang række forhold påvirker kontormarkedet i København, hvoraf de mest relevante at fokusere på er:

konkurrencedygtigt i forhold til en fortsat kontorudlejning og vil derfor presse kontormarkedet i city. Omvendt er konvertering af kontorer til ejerboliger ikke længere så god en business case, idet lejen for de eksisterende kontorer i CBD er kommet op på et højt niveau.

for mange kontorlejere, da de ikke med sikkerhed kender deres vækstkurve. Derfor drøftes afståelses-, fremlejeret og såkaldte break options ofte intenst i forhandlingerne. I et presset marked som nu, kan der ikke forhandles nævneværdigt med henblik på at opnå kortere lejerbindingsperiode.

K ontorudbuddet er presset. Efterspørgslen er rettet mod indflytningsklare kontorer i CBD Fleksibilitet er et krav fra kontorlejerne – Hvordan løser vi det?

Bosætningstrend – de unge bliver boende i København

Hvad er der mangel på?

Små og mellemstore virksomheder - typisk over 100 ansatte - stiller krav til store sammenhængende etagearealer og godt indeklima. Mange af disse lejere har en ret kort tidshorisont for flytning til nye kontorer (3 – 9 måneder), da der sker rekruttering og stor vækst i antal medarbejdere. Der er ikke tålmodighed til at vente på nybyggeri eller væsentlige ombygninger.

Ønsket til fleksibilitet skaber derfor vækst for kontorhotelkoncepter i forskellige varianter. Kontorhotellernes markedsandel i København har passeret 2% og forventes at stige markant i de kommende år. Det er en særlig udfordring for kontorudlejerne, som oftest ikke selv ønsker at drive et kontorhotel.

Mangel på kontorer i det centrale København 2019 har været præget af stor aktivitet og mange kontorer i CBD er udlejet uden forudgående markedsføring, idet lejerne kommer fra mæglernes kundedatabaser. Udlejerne har i flere tilfælde endda kunnet vælge iblandt flere potentielle lejere.

Mange ældre ejendomme mangler elevatorer, har for små etagestørrelser og et dårligt indeklima. Alligevel er der stor efterspørgsel efter kontorer i de ældre ejendomme i city med den særlige sjæl og den rigtige beliggenhed. En del ældre kontorejendomme er igennem de senere år udgået af kontormarkedet og konverteret til hotel eller boliger. Konvertering til hotel er fortsat

Great demand for offices in central Copenhagen 2019 was characterised by high levels of activity, which we expect to continue in 2020. A number of factors influence the office rental market in Copenhagen. The most relevant to highlight are: O ffice properties are in relatively short supply.

Demand is oriented towards ready-to-use offices in CBD. Office occupiers require flexibility - how can we solve this?

Housing trends - young adults are staying in Copenhagen.

Lack of offices in central Copenhagen 2019 has been characterised by high activity levels, and many offices in Copenhagen Business District have been rented out without any prior marketing, as the tenants can be found within the

52 // RED - Danish Investment Atlas 2020

Dette forstærker efterspørgslen efter opdaterede, moderniserede og centralt beliggende kontorarealer. Der er mangel på centralt beliggende kontorlejemål, hvor udlejer up front har opgraderet til mere trendy rå stil med styr på akustik, dagslys og frisk luft. For disse ejendomstyper opnår udlejer det udbudte lejeniveau og den ønskede lejerbinding.

Hvordan sikres lejer fleksibilitet i et marked, hvor udlejer sætter dagsordenen?

Attraktive kontorer eller ej - fleksibilitet er væsentligt

broker’s customer databases. In several cases, the landlords have even been able to pick and choose between several different tenants.

Many older properties do not have elevators, the floors are small and they have poor interior climates - yet, there remains a strong demand for prime location offices in older buildings which are often characterized by a distinct atmosphere.

Some older and vacant office properties have in recent years been transacted and converted to hotels or other residential use. In particular, hotel conversions remain competitive compared to renting the properties out as offices, and this trend is expected to continue thereby diminishing the office supply in central Copenhagen. Conversely, the conversion of offices to homes is no longer a competitive business case, as the office

Bosætningstrends forstærkes En meget stor del af forklaringen på den store efterspørgsel efter centralt placerede kontorer skyldes nødvendigheden i at tiltrække og fastholde talenter i virksomhederne. Trenden for bosætning fortsætter og mange veluddannede børnefamilier bliver boende centralt i København og brokvartererne. Virksomhederne er derfor påpasselige med at flytte for langt ud af byen, da mange ansatte ønsker en arbejdsplads i cykelafstand fra deres bopæl og med god nærliggende offentlig transport.

rents in CBD have reached such high levels.

What is there a shortage of?

Small medium enterprises - typically with more than 100 employees - tend to require large connected floor spaces and a good interior climate.

Many of these tenants have a short time frame for moving into new offices (3-9 months), as they are rapidly recruiting new staff. They have no patience for waiting for new construction projects or significant overhauls.

This increases the demand for up to date, modernised and centrally located offices. For these types of properties, the tenants are willing to comply with the landlord requirements in terms of both rent and lease durations.

Therefore, the right to assign, the right to sublet and so-called “break options” are often subjects of intense negotiation. In the current market, tenants do not have much negotiating power when it comes to achieving shorter lease contracts.

Street name

The demand for flexibility results in the growth of office hotel concepts. Their market share have exceeded 2% in Copenhagen, and is expected to grow significantly in the years ahead.

This is a particular challenge for office landlords, who often do not want to run an office hotel.

Housing trends are being reinforced Part of the explanation for the strong demand for centrally located offices is due to the necessity of

attracting and retaining talent in the companies.

The housing trends continue, and many well-educated families with children are staying in central Copenhagen and the bridge districts.

The companies are therefore cautious about moving too far away from the central areas, as many employees want their workplace to be within bicycle distance from their homes and with access to good public transport options.

OFFICE

How are tenants assured flexibility in a market where the landlord calls the shots?

Attractive offices or not - flexibility is an important factor for many office tenants, as their future growth will impact their demands.

Base rent DKK*

1

CBD – City center and Christianshavn

1,950

2

Kalvebod Brygge

1,700

3

North Harbour and Amerika Plads

1,900

4

Frederiksberg

1,450

5

Copenhagen E

1,500

6

Copenhagen W and Carlsberg Byen

1,600

7

Copenhagen N

1,300

8

Copenhagen NW

1,200

9

Islands Brygge

1,450

10

Ørestad

1,500

11

South Harbour

1,300

12

Valby

1,350

13

Amager East and Copenhagen Airport

1,425

14

Tuborg Harbour

1,700

15

Kongens Lyngby

1,450

16

Ring 3

1,100

*Excl. service charges

53

KONTOR - HIGHLIGHTS OFFICE - HIGHLIGHTS Nye tider for kontorerne i CBD Forskellen i lejen mellem CBD og det øvrige København øges over de kommende 10 år.

I forhold til Oslo og Stockholm, så er kontorlejen i København meget lav. Samtidig har kontorlejen for de bedste lokaler i København stort set været flad i perioden 1995 til 2015 uanset om ejendomsmarkedet har haft gode eller dårlige økonomiske vilkår. I Oslo og Stockholm er der i samme periode set meget store udsving i lejen for kontor i CBD afhængig af det økonomiske klima, som følge af de 2 byers manglende mulighed for at udvide kontormassen ( figur 22). Hvorfor denne forskel og fortsætter den?

Flad kontorleje i årtier grundet løbende nyopførsel København har haft en fantastisk udvikling over de seneste 25 år og byen har haft masser af velbeliggende byudviklingsområder til kontor. Tænk blot på Kalvebod Brygge, Christians Brygge (Nordea´s tidligere HQ), Islands Brygge, den tidligere postterminal og domicilerne langs Weidekamspgade for at nævne nogle af de mest centrale placeringer.

I næste ring er der Havneholmen, Amerika Plads, Nordhavnen, Sydhavnen og Ørestad.

Kontorlejemarkedet har derfor været forvent med hele tiden at kunne imødekomme en efterspørgsel efter velbeliggende kontorer da udbuddet har været større end efterspørgslen. I perioder med øget efterspørgsel, er markedet blevet tilført nybyggeri som har fastholdt lejen på et uændret niveau ( figur 21). I perioder med høj tomgang har investorerne – som primært har været præget af danske institutionelle investorer – fastholdt lejen på samme niveau og i stedet imødekommet lejerne med incitamenter i form af lejefrihed og kortere binding. Hertil kommer det forhold, at tomgangen ofte var i de ældre og utidssvarende ejendomme, mens de moderne ejendomme var mere resiliente over for presset på lejen.

Nye tider for CBD De helt centralt beliggende byggegrunde til kontor i København er efterhånden ved at være bebyggede og nu er det i Sydhavnen, Ørestaden eller Nordhavnen der udbydes arealer til større kontorbyggerier. Samtidig er mange af de

Figure 21: Theoretical supply & demand for CBD offices

Prime office rent in CBD

Supply of office space

2025

Increasing office supply until 2015 keept prime rent stable.

Lack of new development and increasing demand will increase future rental levels.

2015

Total office sq m in Copenhagen CBD

Expansion of office space 1995-2015 Source: C&W | RED

54 // RED - Danish Investment Atlas 2020

Supply

I de seneste 3-4 år er kontorlejen steget i alle områder af København som følge af de positive økonomiske konjunkturer. I Ørestad, Sydhavnen og Nordhavnen kan der i modsætning til CBD fortsat kan tilføres nye kontorarealer. Derfor forventes kontormarkedet i København at undergå følgende udvikling de kommende 10 år: I år med høj konjunktur vil markedslejen for alle områder i København stige – dog procentuelt mest i CBD, hvor efterspørgslen er størst, som følge af virksomhedernes adgang til at tiltrække arbejdskraft er størst i CBD. I perioder med lavkonjunktur vil markedslejen for kontor i områderne Sydhavnen og Ørestaden med mange nye og ensartede kontorbyggerier og hvor der fortsat er byggemuligheder falde, mens lejen i CBD må forventes at stagnere.

Om 10 år forventes forskellen mellem markedslejen i CBD og de øvrige kontorområder i København og omegn at være øget markant i forhold til i dag. I dag udgør forskellen mellem basislejen i CBD (1.950 kr. pr. m²) og Ørestad/ Sydhavn (gns. 1.400 kr. pr. m²) ca. 40%. I forhold til nybyggeri i Glostrup/Vallensbæk/Ballerup (1.100 kr. pr. m²) så udgør forskellen 75-80%.

Vi forventer at spreadet mellem CBD og omegnen af København (Glostrup/Vallensbæk/Ballerup) vil nærme sig 100% indenfor 10 år.

Køb dyrt og få et højt afkast I dag handles de bedste kontorejendomme i København CBD til 3,5% i afkast. Det er markant lavere end en nyopført kontorejendom langs Ring 3, der handles i niveauet 5,5%, dvs. et merafkast på ca. 2 procentpoint. Henset til vores forventning om, at lejeudviklingen i CBD vil udvikle sig mere positivt end langs Ring 3 over de kommende 10 år – forventes totalafkastet for CBD over 10 år at være ca. 7% mens den for en tilsvarende investering langs Ring 3 forventes at være lige under 7%*.

Increase in office rent 2015-2025 due to fixed supply 1995

eksisterende kontorbygninger i det centrale København konverteret til boliger eller hotel i de seneste 5-7 år. Det betyder, at der for første gang er en situation, hvor CBD ikke kan udvides med nybyggeri og hvor den samlede kontormasse, reelt er reduceret.

Demand

*Beregningerne er foretaget med udgangspunkt i en forventning om uændret afkast over investeringsperioden for begge områder, men hvor huslejen for CBD forventes at være indeks 131 i år 10, men indeks 103 for Ring3 i år 10.

400

400 400

400

350

350 350

350

300

300 300

300

250

250 250

250

200

200 200

200

150

150 150

150

Figure 22: Office - Prime rent Nordic capitals 2005-2019, index 100 = Copenhagen 2005

2005

100 100 100 2006 2005 2007 2006 2008 2005 2007 2009 2006 2008 2010 2007 2009 2011 2008 2010 2012 2009 2011 2013 2010 2012 2014 2011 2013 2015 2012 2014 2016 2013 2015 2017 2014 2016 2018 2015 2017 2019 2016 2018 2017 2019 2018 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source: C&W |Source: RED C&W |Source: RED C&W | RED Source: C&W | RED

Oslo

New times for offices in CBD The spread between the rents in CBD and the rest of Copenhagen increases over the next ten years.

Compared to Oslo and Stockholm, the office rent in Copenhagen remain very low. At the same time, office rents for the best premises in Copenhagen has virtually remained unchanged from 1995 to 2015, regardless of whether the real estate market has had good or bad economic conditions. During the same period there have been major fluctuations in the rent for offices in CBD in Oslo and Stockholm depending on the economic situation, as a result of the two cities lack of possibility to expand the total office mass ( figure 22). Why this difference and will it continue?

Flat office rent for decades due to ongoing new developments Copenhagen has had a fantastic development over the past 25 years, and the city has had plenty of well-located urban development areas for offices. Just think of Kalvebod Brygge, Christians Brygge (Nordea’s previous HQ), Islands Brygge, the old mail terminal and the domiciles along Weidekampsgade to mention some of the most central locations. In the next circle, there is Havneholmen, Amerika Plads, Nordhavnen, Sydhavnen and Ørestad.

The office occupier market has therefore always been used to be able to meet the demand for well-located offices, as the supply has exceeded the demand. In periods of growing demand, newly built offices have been added to the market, which have kept the rent levels unchanged ( figure 21).

Stockholm Oslo Oslo

2019

Copenhagen Copenhagen Copenhagen Stockholm Stockholm Oslo Stockholm Copenhagen

During periods with high vacancy rates, investors which have mainly been Danish institutional investors - have kept rent levels unchanged and instead met the tenants with incentives such as periods with rent rebates and shorter non-termination periods. In addition, the vacancies were often in the older and outdated properties, while the modern properties were more resilient to the rent pressure.

New times for CBD The most centrally located construction sites for offices in Copenhagen are by now almost fully developed. It is now in Sydhavnen, Ørestad or Nordhavn areas are offered for larger office projects. At the same time, many of the existing office buildings in the central Copenhagen have been converted to homes or hotels during the last 5 to 7 years. This means that, for the first time, there is a situation where CBD cannot be expanded with new constructions and where the total office space is reduced.

In the last 3-4 years, office rents have increased in all areas of Copenhagen as a result of the positive economic upswing. In contrast to CBD, Ørestad, Sydhavnen and Nordhavn can continue to develop new offices. Due to this the office market in Copenhagen is expected to undergo the following development in the coming ten years: I n times of economic growth, the market rent for all areas in Copenhagen will increase. However, in percentage terms they will increase most in CBD, where the demand is greatest, due to the companies’ ability to attract employees.

During periods of recession, the market rent for

offices in areas such as Sydhavnen and Ørestad, with many new and uniform office buildings and where there are still opportunities for new construction, will decrease, while the rent in CBD is expected to stagnate.

I n ten years, the spread between the market rent in CBD and other office areas in Copenhagen and Greater Copenhagen is expected to have increased significantly compared to today. Currently, the difference between the base rent in CBD (DKK 1,950 per sq m) and Ørestad/ Sydhavnen (avg. DKK 1,400 per sq m) is approx.

40%. When it comes to new development projects in Glostrup/Vallensbæk/Ballerup (DKK 1,100 per sq m), there is a difference of 75-80%.

We expect that the spread between CBD and Greater Copenhagen (Glostrup/Vallensbæk/ Ballerup) will approach 100% within ten years.

Buy expensive and achieve a high return Today, the best office properties in CBD are traded at a yield of 3.5%. This is significantly lower than for newly built office properties along Ring 3, which are traded at yields around 5.5% - i.e. an excess yield of approximately two percentage points. But given our expectation, that the rent will develop more positively in CBD than along Ring 3 during the next 10 years – the total return for CBD is expected to be approx. 7% while the total return for an equivalent investment along Ring 3 is expected to be just below 7%*. *The calculations are based on an expectation of unchanged yields over the investment period for both areas, but where the rents for CBD are expected to be at index 131 in year 10, but index 103 along Ring 3 in year 10.

55

OFFICE

100

KONTOR - FORVENTNINGER TIL 2020 OFFICE - EXPECTATIONS FOR 2020 Kontor opfattes stadig som et sikkert segment Historisk set har kontorlejen ikke været særligt volatil, set i forhold til de observerede udsving i retail- og til dels boliglejen, bl.a. som følge af et løbende stort udbud af byggemuligheder. De positive forventninger til lejeudviklingen og den langsigtede efterspørgsel på kontorer i København har betydet, at investorerne har været villige til at betale historiske lave afkast for store kontorejendomme på de rigtige beliggenheder og med stærke lejekontrakter.

KLP Ejendommes seneste opkøb af Deloitte og Simcorp bygningerne til knap 2,5 mia. kr. svarende til afkast i niveauet 3,50 – 3,75% bekræfter de lave afkast. Såfremt der i 2020 udbydes tilsvarende prime kontorejendomme med den rigtige størrelse (+500 mio. kr.), beliggenhed og lejevilkår forventer vi at se afkast i niveauet 3,25% - 3,50%.

Større usikkerhed i omegnskommunerne De gunstige udlejningsvilkår i CBD har ikke haft en afsmittende effekt på kontormarkedet i de øvrige decentrale erhvervsområder. Jo længere væk fra CBD – jo sværere er udlejningen. Rummeligheden til opførsel af nye kontorprojekter i omegnskommunerne er stor, men efterspørgslen er begrænset og det kan være svært at få økonomi i

at opføre et nyt kontorhus til 1.100 kr. pr. m². med de aktuelle entrepriseomkostninger. Omfanget af spekulativt byggeri i disse områder er derfor yderst begrænset og investorerne forventes ikke at ændre adfærd i 2020.

RED INVESTOR SURVEY Investorerne forventer et fortsat stærkt lejemarked RED foretager to gange årligt en forventningsundersøgelse blandt de største og mest aktive investorer i Danmark. Undersøgelsen viser at hele 98% af de adspurgte forventer, at kontorlejemarkedet vil opleve uændret eller forbedret efterspørgsel fra lejerne i 2020. En markant tiltro til kontorlejemarkedet, som er det segment investorerne nærer den allerstørste tillid til i øjeblikket ( figur 23).

Entydig tiltro til fortsat lave afkastniveauer De adspurgte investorer viser en entydig optimisme til afkastniveauerne for 2020, hvor 99% af investorerne tror på uændrede eller faldende afkastniveauer. Størstedelen af investorerne (78%) forventer, ligesom sidste år, et uændret afkastniveau. Investorerne er optimistiske og 21% af investorerne er i år af den opfattelse, at vi ikke har set toppen af markedet, og at vi i 2020 vil registrere

faldende afkast ( figur 24). Vi forventer at der i 2020 kan udbydes en række kontorejendomme, som igen kan være med til at verificere det meget lave afkastniveau på de bedste ejendomme.

FORVENTNINGER TIL 2020 Fortsat høj lejerefterspørgsel, lav tomgang og uændret afkast Vi oplever fortsat en høj lejerefterspørgsel i det centrale København, og aktuelt er tomgangen ligeledes på et meget lavt niveau. Udbuddet af gode kontorlokaler i det centrale København er meget begrænset og med en fortsat høj lejerefterspørgsel forventer vi stigninger i lejen til følge.

Dette gælder dog ikke for kontorer i sekundære områder som ring 3, hvor lejerefterspørgslen er væsentligt mindre.

Afkastniveauerne for kontorer har været faldende i de senere år, og vi forventer at man for de store prime kontorer, centralt i København med økonomisk stærke lejere på lange kontakter, fortsat forventes at kunne sænke grænsen for prime yield i København. Udbuddet af disse ejendomme er dog sjældne, og der er et relativt fåtal af disse ejendomme i markedet.

Figure 23: Investor Confidence Index - Office occupier demand

Figure 24: Investor Confidence Index - Office yields

With regard to the occupier market for office space during the next 6 months, the demand on the occupier market will:

With regard to the development of yields for office properties during the next 6 months, market yields will:

100% 100%

100% 100%

100% 100% Improve Improve

52% 52%

45% 45%

14% 14%

100% 100%

1%1%

Show Show little little or or nono change change

Remain Remain stable stable

Worsen Worsen

Decline Decline 78% 78% 73% 73%

46% 46%

53% 53%

2%2% 2%2% Q1Q1 2019 2019 Q1Q1 2020 2020

56 // RED - Danish Investment Atlas 2020

Increase Increase

13% 13%

21% 21%

Q1Q1 2019 2019 Q1Q1 2020 2020

office development projects in the suburban municipalities, but the demand is limited, and it may be difficult to profit from developing a new office building with rents at DKK 1,100 per sq m with the current development costs. The extent of speculative construction in these locations is therefore extremely limited, and investors are not expected to behave differently in 2020.

are optimistic, and 21% of them believe that we have not seen the top of the market and that we will see declining yields in 2020 ( figure 24). We expect that 2020 may see several office properties on the market that can help verify the very low yield levels on the best properties.

RED INVESTOR SURVEY

Continuing strong occupier demand, low vacancy rates and unchanged yields We are still seeing strong occupier demand in central Copenhagen, and currently vacancy rates are also low. The supply of good office properties in central Copenhagen is limited, and with a continued high occupier demand we expect rent increases as a result. This, however, does not apply to offices in secondary areas such as Ring 3, where the occupier demand is significantly weaker.

The latest two transactions at Weidekampsgade where KLP Ejendomme bought both the Deloitte and Simcorp buildings for almost DKK 2.5 bn at yields between 3.5-3.75% which clearly validates the low prime yields.

If similar prime office properties of the right size (DKK +500 million kroner), location and rent terms are offered on the market in 2020, the yield is expected to be in the level of 3.25-3.50%.

Investors expect the strong rental market to endure Twice a year, RED studies the expectations among the largest and most active investors in Denmark.

The study shows that 98% of those asked expect that the rental market for offices will see consistent or improved demand from tenants in 2020.

This is a great confidence towards the rental market for offices, and it is also the market segment that investors have the most trust in ( figure 23).

Greater uncertainty in the suburban municipalities The favourable conditions for landlords in CBD did not have a knock-on effect on the market for offices in the non-central commercial areas. The further away a property is from CBD, the harder it is to find tenants. There are plenty of space for new

There is almost unanimous agreement that low yields will continue The asked investors are unanimous in their optimism when it comes to yields in 2020, as 99% of investors believe yields will remain unchanged or decline. Most investors (78%) expect, just as last year, that yields will remain unchanged. Investors

EXPECTATIONS FOR 2020

The yield levels for offices have been decreasing in recent years, and when it comes to large prime offices in central Copenhagen with strong tenants on long leases, we expect that the prime yields in Copenhagen can be lowered. There is limited supply of such properties though, and relatively few of them are on the market.

The Cushman & Wakefield | RED Investor Confidence index The Index for Denmark include responses from 70 of the most active investors in Denmark in the years 2018 and 2019. The index monitors expectations from highly active investors in the Danish market for the next six months.

The broad coverage reflects the interest for non-biased objective analyses 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.

57

OFFICE

Offices are still perceived as a safe segment Historically, office rents have not been particularly volatile compared to what has been seen in the retail sector and, to some extent, residential sector - due to a large supply of building sites. The positive expectations for developments in the rent price and the long-term demand for offices in Copenhagen has resulted in investors being willing to accept historically low yields for large office properties in the right locations with strong lease contracts.

KONTOR - TRANSAKTIONER OG NØGLETAL OFFICE - TRANSACTIONS AND KEY FIGURES

Office - Top 30 transactions 2019 Asset name

Area

Date

Size sq m

Price DKK

Investor

Vendor

1

Copenhagen Towers

Copenhagen S

September

54,000

1,750,000,000

NIAM

Solstra

2

Kalvebod Brygge 32

Copenhagen W

December

31,700

1,420,000,000

Klövern

Genesta

3

Deloitte HQ

Copenhagen S

December

36,835

1,400,000,000

KLP ejendomme

Deloitte

4

Weidekampsgade 14

Copenhagen S

November

26,104

1,085,000,000

KLP ejendomme

Langebro Eiendom

5

EC Hansens House

Carlsberg Byen

May

16,000

711,000,000

KLP ejendomme

Carlsberg Byen Ejendomme

6

Chr. Hansen HQ

Hørsholm

August

17,723

540,000,000

PensionDanmark

Chr.Hansen

7

Office portfolio - Valby Maskinfabrik

Valby

September

21,290

500,000,000

Schroder Real Estate

Europa capital

8

Borupvang 1

Ballerup

November

36,166

450,000,000

Ekistics Property Advisors

SDC Ejendomme

9

Amaliegade 44

CBD

September

11,802

352,000,000

Confidential

Freja Ejendomme

10

Flintholm II - EY HQ

Frederiksberg

March

9,791

336,672,398

Deka

NCC

11

Niels Juels Gade 9-13

CBD

April

7,650

320,000,000

Aviva

Gefion Group

12

Titan Hus

Copenhagen N

October

22,000

313,500,000

NREP

Dreyers Fond

13

Bank Invest portfolio

Copenhagen Area

February

N/A

300,000,000

Bank Invest

PFA Ejendomme

14

Hermodsgade 8

Copenhagen N

May

15,300

265,000,000

UCC

Tryg Forsikring

15

DOKK 1

Århus C

September

8,363

259,000,000

HL Ejendomme

Aarhus Kommune

16

Borgervænget 3-7

Copenhagen E

August

15,886

240,000,000

Region Hovedstaden

Niam

17

Vallensbæk Company House IV

Vallensbæk Strand

December

10,277

240,000,000

Pensiondanmark

NCC

18

Banevingen 6-14

Copenhagen N

July

15,861

215,000,000

Viscop

Semler Gruppen

19

Hausergården

CBD

December

6,117

175,000,000

Angelo Gordon

Murermester Willy Lynggaard Petersens Familiefond

20

Nørre Voldgade 16

CBD

December

7,662

170,000,000

Confidential

Københavns Kommune

21

Forum

Frederiksberg C

June

9,935

170,000,000

PFA Ejendomme

Private investor

22

Stoltenbergsgade 11

Copenhagen W

December

3,196

167,000,000

Aviva

M. Goldschmidt Holding

23

Bernhard Bangs Alle 25 + 31

Frederiksberg

November

9,524

150,000,000

Viscop

Private investor

24

Amaliegade 45

CBD

June

3,687

144,300,000

Jeudan

Patrizia

25

Sydhavnsgade 16

Copenhagen SW

November

8,472

144,000,000

ELF Development

Aberdeen Standard Investments

26

Gammel Køge Landevej 84

Valby

October

7,065

141,300,000

CapMan

Private investor

27

H.C. Andersens Boulevard 9

Copenhagen W

December

3,565

140,000,000

Aviva

M. Goldschmidt Holding

28

Mosevej 3

Risskov

December

7,000

139,000,000

PFA Ejendomme

MT Højgaard

29

Nørre Voldgade 94-96

CBD

May

3,263

137,500,000

Jeudan

Private investor

30

Nordre Fasanvej 108

Frederiksberg

January

4,968

130,000,000

Private investor

Jørn Tækker

58 // RED - Danish Investment Atlas 2020

Office - Prime rent and yield levels Q1 2020 Base rent DKK*

Yield level**

1

Street name CBD â&#x20AC;&#x201C; City center and Christianshavn

1,950

3.50% - 3.75%

2

Kalvebod Brygge

1,700

3.50% - 4.00%

3

North Harbour and Amerika Plads

1,900

3.75% - 4.00%

4

Frederiksberg

1,450

4.25% - 4.50%

5

Copenhagen E

1,500

4.00% - 4.50%

6

Copenhagen W and Carlsberg Byen

1,600

4.00% - 4.25%

7

Copenhagen N

1,300

5.25% - 5.75%

8

Copenhagen NW

1,200

5.25% - 5.75%

9

Islands Brygge

1,450

3.75% - 4.25%

10

Ă&#x2DC;restad

1,500

4.50% - 5.00%

11

South Harbour

1,300

4.50% - 5.00%

12

Valby

1,350

4.75% - 5.25%

13

Amager East and Copenhagen Airport

1,425

5.00% - 5.50%

14

Tuborg Harbour

1,700

4.50% - 5.00%

15

Kongens Lyngby

1,450

4.50% - 5.00%

16

Ring 3

1,100

5.50% - 6.00%

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

Source: C&W | RED

OFFICE

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

RED arranged the lease of Ă&#x2DC;stergade 1 to the Danish sneaker brand ARKK.

RETAIL Investeringsmarkedet 2019 // Investment market 2019................................ 60 Volumen & Investorer 2019 // Volume & Investors 2019................................ 62 Top 5 transaktioner 2019 // Top 5 transactions 2019...................................... 64 Lejemarkedet // Occupier market........................................................................ 66 Strøgtælling // High street footfall...................................................................... 68 Highlights // Highlights........................................................................................... 70 Forventninger til 2020 // Expectations for 2020.............................................. 72

RETAIL

Transaktioner og nøgletal // Transactions and key figures........................... 74

RETAIL - INVESTERINGSMARKEDET 2019 RETAIL - INVESTMENT MARKET 2019 Laveste transaktionsvolumen siden 2012 Med en samlet transaktionsvolumen på 8,6 mia. kr. i 2018, faldt transaktionsvolumen i 2019 med mere end 50% til 4,1 mia. kr. ( figur 26). Retailmarkedet har siden 2012 været kendetegnet ved, at der hvert år har været en eller flere transaktioner i milliardstørrelsen, der har trukket volumen op; typisk shoppingcentre (Rosengårdcentret, Herningcentret, Danicas portefølje mv.) eller stormagasiner (Magasin, Illum mv.). I 2019 blev der imidlertid ikke handlet et eneste større shoppingcenter, hvilket er med til at forklare den lavere transaktionsvolumen.

Investorerne er således blevet mere tilbageholdende, når det kommer til de store retailtransaktioner.

Danske investorer er fortsat de mest aktive inden for retail Dansk kapital dominerede retailtransaktionsvolumen i 2019, da danske investorer investerede for ca. 3 mia. kr., hvilket svarer til hele 72% af den samlede retailvolumen ( figur 26). Den større andel af danske investorer er en fortsættende trend fra 2017 og 2018, hvorimod det i perioden 2012-2016 var udenlandske investorer, der havde størst appetit på retail. Hvis der alene ses på

retailtransaktionsvolumen i København, er det fortsat udenlandske investorer, der er mest aktive.

83% af de samlede danske retail investeringer er foretaget uden for Storkøbenhavn, hovedsageligt i Jylland, hvor Industriens Pension’s køb af Regina-bygningen i Aarhus på lidt over en halv milliard særligt påvirker fordelingen ( figur 27).

En uventet investortype mest aktiv inden for retail Ejendomsfonde har i de senere år været den mest aktive investortype i retailsegmentet, men i år er

de noget atypisk overgået af private investorer, som med en volumen på ca. 1,2 mia. kr., tegner sig for ca. 30% af den samlede transaktionsvolumen ( figur 25). Uagtet at ejendomsfondene ikke foretog milliardinvesteringer indenfor retailsegmentet i 2019, var de dog stadig aktive med 25% af den samlede retail transaktionsvolumen, hvor investorer som Capman og Aachener Grundvermögen bidrog til den samlede volumen med hver deres strøghandel af hhv. Købmagergade 42 og Købmagergade 25.

Figure 25: Retail - Investor type breakdown 2019

Private investor 30%

RETAIL VOLUME

4.1

Property fund 25% Institutional investor 21% Other 15% Real estate company 9%

BN DKK

Lowest transaction volume since 2012 The transaction volume in 2019 of DKK 4.1 bn is a reduction of more than 50% from the volume in 2018 of DKK 8.6 bn. ( figure 26). Since 2012, the retail market has been characterised by yearly transactions exceeding DKK one billion, which greatly affected the total transaction volume.

These transactions mainly involve shopping centres (Rosengårdcentret, Herningcentret, Danica’s portfolio, etc.) or department stores (Magasin, Illum, etc.). However, this was not the case in 2019, as not one transaction involving a major shopping centre occurred, which to some extent explains the lower transaction volume. Investors have thus become more cautious when it comes to larger retail transactions.

Danish investors remain the most active in the retail segment Danish capital dominated the retail transaction volume in 2019 as they invested approximately DKK 3 bn, corresponding to 72% of the total retail transaction volume ( figure 26). The increased

62 // RED - Danish Investment Atlas 2020

Source: C&W | RED

proportion of Danish investors is a recurring trend from 2017 and 2018, whereas from 20122016 it was foreign investors that dominated the retail segment. However, foreign investors are still the most active investors in the Copenhagen area. Furthermore, 83% of the total Danish retail investments have been made outside Greater Copenhagen, mainly in Jutland, where Industriens Pension’s acquisition of the Regina building in Aarhus for approx. DKK 0.5 bn, greatly affects the geographical distribution of Danish retail investments ( figure 27).

but in 2019 (somewhat unusual) they were surpassed by private investors, who together invested DKK 1.2 bn, corresponding to approximately 30% of the total transaction volume ( figure 25).

Although property funds did not acquire any retail assets exceeding DKK one billion in 2019, they were still active and represented 25% of the total retail transaction volume. Property funds such as Capman and Aachener Grundvermögen contributed to the total volume as they each acquired a high street property in Copenhagen, namely Købmagergade 42 and Købmagergade 25.

An unexpected investor type was most active in the retail segment In recent years, property funds have been the most active type of investors in the retail segment,

Figure 26: Retail - Transaction volume 2012-2019 20 17.1

15

BN DKK

43%

10

8.7

8.5 7.3

42%

25%

41%

43%

5

12%

8.6

7.7 59% 4.1

45% 2.5 35% 0

58%

75%

72%

59%

57%

41%

65%

28%

2012

2013

2014

2015 Foreign

Source: C&W | RED

2016 Danish

2017

2018

2019

20182018

2019 2019

ATP/Danica

Figure 27: Retail - Geographic breakdown of foreign investments 2012-2019

6

5

3

RETAIL

BN DKK

4

2

1

0 2012 2012 Source: C&W | RED

20132013

2014 2014

2015 2015 Greater Copenhagen

2016 2016

2017 2017 Rest of Denmark

63

1.4 BN DKK

COPENHAGEN Danish 28% Foreign 72%

33%

RETAIL - VOLUMEN & INVESTORER 2019 RETAIL - VOLUME &COPENHAGEN INVESTORS 2019 1.4

0.2

BN DKK

33%BN DKK

GREATER COPENHAGEN Danish 28% Foreign 72% 56% Danish

Foreign 44%

6%

0.2 0.5 BN DKK

6% BN DKK

RETAIL VOLUME

4.1

GREATER COPENHAGEN OTHER ZEALAND Danish 56% Danish Foreign 44% 92%

Danish 72% Foreign 28%

BN DKK

Foreign 8%

13%

0.5 0.6 BN DKK

13%

BN DKK

OTHER ZEALAND Danish 92% AARHUS Foreign 8% Danish 100% Foreign 0%

15%

1.4 BN DKK

AARHUS

33%

COPENHAGEN COPENHAGEN

1.4Danish 28% BN DKK Foreign

33%

72%

1.4

Danish 28% Foreign 72% COPENHAGEN Danish 28% Foreign 72%

BN DKK

JUTLAND

0.6 1.4 BN DKK

15%

BN DKK

33%

AARHUS

GREATER COPENHAGEN

Danish 100% JUTLAND Foreign 0% & FUNEN Danish 100% Foreign 0%

33%

GREATER GREATER COPENHAGEN COPENHAGEN

0.2

0.2

6%

6%

BN DKK

Danish 56%

BN DKK Foreign

44%

0.2

Danish 56% GREATER Foreign 44% COPENHAGEN Danish 56%

COPENHAGEN

Foreign 44%

BN DKK

1.4 BN DKK

33%

6%

ZEALAND

JUTLAND & FUNEN Danish 100% Foreign 0%

FUNEN

0.5

0.5

13%

13%

BN DKK

OTHER ZEALAND

OTHER ZEALAND

Danish 92%

BN DKK Foreign

8%

0.5

Danish 92% OTHER Foreign 8% ZEALAND Danish 92% Foreign 8%

BN DKK

13%

Source: C&W | RED

64 // RED - Danish Investment Atlas 2020

AARHUS

0.6

0.6

15%

15%

BN DKK

AARHUS

Danish 100% Danish 100%

BN DKK Foreign

0%

Foreign 0% AARHUS Danish 100%

København er fortsat det foretrukne retail investeringsmarked Med en transaktionsvolumen på 1,4 mia. kr. er 33% af den samlede volumen genereret af transaktioner i København og Frederiksberg Kommune, hvilket gør København til det geografiske område i Danmark med højest aktivitet. Volumenen på Fyn og den øvrige del af Jylland (ekskl. Aarhus) nåede 1,4 mia. (33%), hvilket blandt andet er drevet af transaktioner af mindre lokale shoppingcentre i Horsens, Silkeborg og Viborg. Aarhus står for 15% af volumen, hvilket hovedsageligt kommer fra transaktionen af Regina-bygningen til lidt over en halv milliard.

Copenhagen remains the preferred retail investment market With a transaction volume of DKK 1.4 bn, 33% of the retail transaction volume is generated from transactions in the municipality of Copenhagen and Frederiksberg, which makes Copenhagen the geographical area with most activity. This is followed by Funen and Jutland (excl. Aarhus) with DKK 1.4 bn of the volume (33%), which inter alia comes from transactions involving local shopping centres in Horsens, Silkeborg and Viborg. Aarhus represents 15% of the volume, which is mainly generated from the transaction involving the Regina building for approx. DKK 0.5 bn.

Retail - transations (BN DKK) Area

2018

2019

Change

Copenhagen

3.5

1.4

-61%

Greater Copenhagen

0.6

0.2

-58%

Other Zealand

0.4

0.5

23%

Aarhus

1.5

0.6

-57%

Jutland & Funen

2.6

1.4

-46%

Total

8.6

4.1

-52%

Source: C&W | RED

Retail - Top 5 investors 2019* Origin

Volume (in M DKK)

No. of transactions

1

Industriens Pension

DK

540

1

2

CapMan

FI

300

1

3

Orange Investment Managers

NL

224

1

4

KFI Erhvervsdrivende fond

DK

223

4

5

Bank of Montreal

IE

200

*if possible portfolios are split into individual transactions

1 Source: C&W | RED

Retail - Top 5 investors 2012-2019* Investor

Origin

Volume (in M DKK)

No. of transactions

1

ATP

DK

7,600

19

2

Patrizia

DE

2,900

10

3

ECE

DE

2,900

1

4

Central Group

TH

2,700

1

5

Aberdeen Standard Investments

UK

2,600

25

*if possible portfolios are split into individual transactions

Source: C&W | RED

65

RETAIL

Investor

RETAIL - TOP 5 TRANSAKTIONER 2019 RETAIL - TOP 5 TRANSACTIONS 2019 Photo: Niels Nygaard

1: REGINA BUILDING The largest retail transaction of the year was Industriens Pension’s acquisition of the Regina-Building located on the corner of Søndergade and Sønder Allé in the city center of Aarhus. Aberdeen Standard Investments held the property for three years before they sold it to Industriens Pension at an estimated price of DKK 540 m. The property is a combined retail, office and residential property with a total area of 12,200 sq m. The Regina-Building was erected in 1919 and has recently been thoroughly renovated.

Price DKK:

Investor:

540,000,000

Industriens Pension

Sq m:

12,200

Vendor:

Aberdeen Standard Investments

Photo: Capman

2: KØBMAGERGADE 42 The property on the corner of Købmagergade and Klareboderne on the high streets of Copenhagen was sold to the Finnish property fund CapMan in November 2019. Købmagergade 42 was acquired from a private investor at an estimated price of DKK 300 m. As part of the fund’s value-add strategy CapMan plans to refurbish and develop the property into offices and retail to make it more functional, but with respect of the old property (property erected in 1896). Previously the property was used for offices, retail and education.

66 // RED - Danish Investment Atlas 2020

Price DKK:

Investor:

300,000,000

CapMan

Sq m:

Vendor:

3,641

Private investor

Photo: IPE Real Assets

3: VIMMELSKAFTET 46-48 With an investment in a prime retail property, located on Vimmelskaftet 46-48 on the high streets of Copenhagen, the Canadian investor, Bank of Montreal, entered the Danish real estate market in 2019. The property is a combined retail (2,000 sq m) and residential property (1,600 sq m), fully let to e.g. Espresso House and Det Gamle Apotek. Bank of Montreal acquired the property in an off-market transaction from Aberdeen Standard Investments at a price of approximately DKK 200 m.

Price DKK:

Investor:

200,000,000

Bank of Montreal

3,792

Vendor:

Aberdeen Standard Investments Photo: PR

4: BYTORV HORSENS In the summer of 2019 Scandinavian Shopping Center Partners (SSCP) acquired Bytorv Horsens in Jutland from Jyske Realkredit at a price of approximately DKK 190 m. Bytorv Horsens is a regional center with 35 retail units and tenants such as H&M, Sport24 and Deichmann. SSCP plans to fully refurbish and develop the shopping center. Internally, the focus will be on new F&B (food and beverage) units and new anchor tenants. Externally, the focus will be on making the property appear more modern.

Price DKK:

Investor:

190,000,000

Scandinavian Shopping Center Partners

Sq m:

Vendor:

5,927

Jyske Realkredit ApS

Photo: C&W // RED

5: KØBMAGERGADE 25 In August 2019 the German property fund Aachener Grundvermögen acquired the property on Købmagergade 25 on the high streets of Copenhagen from the Finnish property fund CapMan. The property is a combined residential and retail property with a total area of 1,394 sq m. During CapMan’s four years of ownership they have renovated and upgraded the property thoroughly. The price of the property was DKK 179 m.

Price DKK:

Investor:

179,000,000

Aachener Grundvermögen

Sq m:

Vendor:

1,394

CapMan

67

RETAIL

Sq m:

RETAIL - LEJEMARKEDET RETAIL - OCCUPIER MARKET Strøget og Købmagergade udgør stadig de primære handelsgader i København, og selvom flere internationale detailhandelsvirksomheder nu etableres i sekundære gader, er der endnu en betragtelig forskel på de lejeniveauer, vi kan registrere. Selv Frederiksberggade, som vi anslår at være den mindst attraktive strækning på Strøget, kan oppebære et højere lejeniveau end nogen sekundære handelsgader i byen.

Faldende tomgang på Amagertorv og Frederiksberggade Tomgangsprocenten for de primære handelsgader er mere eller mindre uændret i forhold til samme periode sidste år, selvom enkelte strækninger på disse gader faktisk har oplevet en relativ stor udvikling ( figur 28). Mest bemærkelsesværdigt er det, at tomgangsprocenten er faldet med 4,93 og 4,36 procentpoint på henholdsvis Amagertorv

Strøget and Købmagergade are still the primary high streets in Copenhagen, and even if several international retail companies are now opening stores in secondary streets, there remains a significant difference in the rent levels registered. Even Frederiksberggade, which we view as the least attractive part of Strøget, can maintain higher rent levels than any secondary high street in the city.

Decreasing vacancy rates in Amagertorv and Frederiksberggade The vacancy rates for the primary high streets remain more or less unchanged compared to the same period last year, even if some parts along these streets have actually experienced a relatively great deal of development ( figure 28). Most notably, the vacancy rates have decreased by 4.93 and 4.36 percentage points at Amagertorv and Frederiksberggade, respectively. Amagertorv and Frederiksberggade represent the two

68 // RED - Danish Investment Atlas 2020

og Frederiksberggade. Amagertorv og Frederiksberggade repræsenterer også markedets to yderpoler i lejemæssig forstand, og det er således positivt, at hver ende af markedet oplever en positiv udvikling samtidig. Udviklingen er dog primært drevet af enkeltstående udlejninger, herunder den netop igangsatte ombygning af Frederiksberggade 2, som er udlejet til en endnu unavngiven lejer, og åbningen af Gina Tricot i Amagertorv 19. Omvendt ser det ud på Østergade, hvor tomgangsprocenten er steget med 4,04 procentpoint trods de nylige åbninger af ARKK Copenhagen og Design Letters, begge i Østergade 1, Cartier i Østergade 3-5 og Zadig & Voltaire i Østergade 7-9. Stigningen er her et udtryk for, at Topshop er flyttet. Også Købmagergade har oplevet en kraftig stigning i tomgangsprocenten, hvilket primært skyldes føromtalte flytning af Gina Tricot og flytningen af Diesel til Østergade 12. Derudover

er udviklingen af Købmagergade 44-46 og 50 endnu ikke tilendebragt, hvorfor den planlagte tomgang i disse ejendomme har en negativ effekt på den samlede opgørelse.

opposites of the market in terms of the occupier market, and it is thus positive that each end of the market is experiencing a positive development at the same time. Although, it should be mentioned that the development is mostly driven by few individual leases, including the recently started reconstruction of Frederiksberggade 2, which is rented to an unnamed party, and the opening of Gina Tricot on Amagertorv 19. On Østergade the situation is reversed, however, as the vacancy rates have increased by 4.04 percentage points despite the new openings of ARKK Copenhagen and Design Letters, both on Østergade 1, Cartier on Østergade 3-5 and Zadig & Voltaire on Østergade 7-9. The increase in the vacancy rate here has to do with Topshop moving to another location. Købmagergade has also seen a big increase in vacancy rates, and this is mainly due to the abovementioned move of Gina Tricot and Diesel moving to Østergade 12. In addition, the devel-

opment of Købmagergade 44-46 and 50 is not yet finished, and therefore the expected vacancy rates in these properties impact the overall vacancy rate negatively.

Fortsat international lejerinteresse på primære og sekundære beliggenheder Til trods for at tomgangsprocenten for de primære strøggader i København synes uændret, har der været en stor tilflytningsfrekvens i markedet generelt. I 2019 har vi oplevet et væsentligt antal butiksåbninger med internationale varemærker på primære såvel som sekundære handelsgader, herunder senest føromtalte Cartier og Zadig & Voltaire samt også Levi’s, Chloé, Stella McCartney, Sandro, Axel Arigato og Bottega Veneta, som alle slog dørene op i henholdsvis 3. og 4. kvartal af 2019. Det er en positiv tendens, som vi forventer, fortsætter i det kommende år.

Foreign occupier demand continues for both primary and secondary locations in Copenhagen Despite the vacancy rates for the primary high streets in Copenhagen being more or less unchanged, there have been a great number of stores moving to the area in general. In 2019, we saw a significant number of store openings from international brands on both primary and secondary high streets, including aforementioned Cartier and Zadig & Voltaire, but also Levi’s, Chloé, Stella McCartney, Sandro, Axel Arigato and Bottega Veneta, who all opened in the 3rd and 4th quarter of 2019. This is a positive trend, and we expect it to continue in the coming year.

Figure 28: Retail - Prime rent and vacancy levels Q1 2020 Rent level DKK - Zone A

Vacancy - Q1 2020

Change in vacancy 20192020 (%-points)

Amagertorv

33,000

3.73%

-4.93

Østergade

30,000

8.25%

4.04

Købmagergade

26,000

19.66%

6.15

Vimmelskaftet

22,000

17.76%

2.56

Nygade

22,000

10.17%

-0.75

Frederiksborggade

16,000

10.85%

0

Frederiksberggade

15,000

26.06%

-4.36

Kronprinsensgade

11,000

N/A

N/A

Berlingske

9,000

N/A

N/A

Grønnegade

8,000

N/A

N/A

Østerbrogade

5,000

N/A

N/A

Gammel Kongevej

4,000

N/A

N/A

Nørrebrogade

3,000

N/A

N/A

Lyngby

8,500

N/A

N/A

RETAIL

Street name

RED arranged the lease of Løvstræde 3 to the Danish ceramic brand Yonobi.

RETAIL - STRØGTÆLLING RETAIL - HIGH STREET FOOTFALL

FREDERIKSBORGGADE/KØBMAGERGADE

KULTORVET

Average footfall counts per hour 2019 1

Østergade (Hugo Boss)

4.141

2

Østergade/Pilestræde

7.120

3

Amagertorv/Købmagergade

5.129

4

Amagertorv

5.970

5

Amagertorv/Vimmelskaftet

5.047

6

Nygade/Vimmelskaftet

4.911

7

Federiksberggade

4.422

8

Købmagergade/Kronprinsensgade

5.196

9

Rundetårn

4.892

10

Frederiksborggade/Købmagergade

4.651

11

Pilestræde/Kronprinsensgade

3.374

12

Grønnegade/Ny Østergade

2.932

RUNDETÅRN PILESTRÆDE/KRONPRINSENSGADE

KØBMAGERGADE/KRONPRINSENSGADE

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.

AMAGERTORV/KØBMAGERGADE AMAGERTORV

AMAGER TORV/VIMMELSKAFTET

NYGADE GAMMELTORV

FREDERIKSBERGGADE

Effekten af den nye Cityring Vores observationer understøtter endnu ingen entydig udvikling i trafikken på Østergade, og vi vurderer, at det kan skyldes for-

ØSTERGADE/NY ØSTERGADE

ØSTERGADE/PILESTRÆDE

The Metro City Ring, M3, opened in the autumn and led to much speculation about the potential changes in consumers’ walking patterns in and around Strøget (Copenhagen’s main pedestrian high street). Two new metro stations have opened at Rådhuspladsen (Copenhagen’s main square) and Gammel Strand, and both of these are located near Strøget’s one end, Frederiksberggade, and the middle of Strøget, Amagertorv, which is where Købmagergade starts. The most interesting metro opening, however, is the one at Kongens Nytorv, which is one of just two hubs on the new metro line. Metroselskabet (the company behind the Metro) also expects that Kongens Nytorv will be the most used metro station in 2025.

The effect of the new Metro City Ring From what we can see, there are no preliminary indications of any evident development

skellige årsager; for selvom Kongens Nytorv formodes at lægge plads til den nu travleste metrostation, har indgangen til Østergade været præget af anlægsbyggeri i forbindelse med cityringens åbning. Metroopgangen blev rykket tættere på Østergade, og fodgængerovergangen blev først i november efter åbningen flyttet til den i dag mere hensigtsmæssige placering ved gadens munding; og selvom dette naturligvis er til fordel for Østergade på lang sigt, har det formentlig haft en generende effekt for fodgængere i ombygningsperioden. Flytningen af fodgængerovergangen har nu skabt en akse, der binder Østergade, og dermed Strøget, sammen med Kongens Nytorv og en af Danmarks mest besøgte turistdestinationer: Nyhavn. Det er ikke vores vurdering, at Østergade endnu har oplevet den fulde effekt af den nylig åbnede metrolinje.

in the footfall on Østergade, and it is our assessment that this may be due to various factors. Even if Kongens Nytorv is expected to become the busiest metro station, the entrance to Østergade has been characterised by construction work related to the opening of the City Ring. The Metro entrance was moved closer to Østergade, and the road crossing was only moved to the start of Østergade in November and even if this is an advantage for Østergade in the long run, it has presumably been a nuisance for the pedestrians in the area during the construction period. The moving of the road crossing has now created an axis that connects Østergade (and thereby Strøget) with Kongens Nytorv and one of Denmark’s most popular tourist attractions: Nyhavn. We do not believe that Østergade has experienced the full impact of the newly opened metro line yet.

71

RETAIL

Metro-cityringen, M3, åbnede i efteråret, hvilket medførte meget spekulation omkring potentielt ændrede bevægelsesmønstre hos forbrugere i og omkring Strøget. På Rådhuspladsen og Gammel Strand er to nye metrostationer blevet indviet, og i umiddelbar nærhed af de to findes henholdsvis Strøgets ene ende, Frederiksberggade, og Strøgets midte, Amagertorv, hvorfra Købmagergade udspringer. Den mest interessante stationsudvidelse må dog være Kongens Nytorv, som er et af blot to knudepunkter på den nye metrolinje, og Metroselskabet forventer derfor også, at Kongens Nytorv bliver den suverænt mest benyttede metrostation i 2025.

RETAIL - HIGHLIGHTS RETAIL - HIGHLIGHTS Udvikling af sekundære strøggader I efteråret 2009 færdiggjorde det danske ejendomsselskab, Jeudan, ombygningen af ejendommen Berlingske Karré på Gammel Mønt, Sværtegade, Pilestræde og Antonigade. Efter ombygningen var tilendebragt, åbnede amerikanske The North Face, finske Marimekko og svenske Lexington side om side i de gamle trykkerilokaler mod Gammel Mønt. På karréens modsatte side var tyske Marc O’Polo åbnet ved siden af italienske Marlboro Classics, og mod Antonigade havde spanske Camper slået dørene op. Ombygningen af Berlingske Karré var en naturlig fortsættelse af den udvikling, som nabokarréen, Galleri K, havde igangsat år forinden.

Dette var en generel udvikling, der siden har tilført en stor mængde kvadratmeter i markedet, arealer specifikt indrettet til moderne detailhandel. Udviklingen har samtidig sikret en potentielt større geografisk spredning af konceptbutikkerne; for selvom The North Face, Marimekko og Camper efterfølgende er flyttet til henholdsvis Købmagergade og Strøget, synes det nemlig ikke videre sandsynligt, at alle disse virksomheder havde valgt en sekundær placering i årene før 2009, hvis ikke området, ejendommen og lokalerne var indrettet specifikt til formålet.

Fortsat høje tomgangsprocenter i strøggaderne Når vi opgør tomgangsprocenten for Københavns primære handelsgader, Købmagergade og Strøget, skal tomgangen således ses i lyset af den udvikling, der er foregået i den forgangne tiårige periode – fra 2009 til 2019. Ved årsskiftet i år er tomgangen for butiksarealer i stueetagen på Strøget, Købmagergade samt Frederiksborggade fra Kultorvet til Nørre Voldgade på 13,89 %, hvilket svarer til 9.338 m². Meget er blevet skrevet om udbuddet af ledige butikslokaler i København det forgangne år, og vi underkender ikke, at den aktuelle tomgangsprocent vidner om et marked, der er mere udfordret, end det tidligere har været.

Dog er det interessant at betragte den aktuelle tomgang relativt til den samlede arealtilvækst i markedet for butiksejendomme i Indre By i København.

15.137 m² nye butiksarealer i Indre By de sidste 10 år Vores opgørelse viser, at der i en tiårig periode fra 2009 til 2019 i Indre By er blevet tilført 15.137 m² butikslokaler i stueetagen, udviklet til formålet og indrettet derefter. Til sammenligning udgjorde Købmagergade samt Frederiksborggade fra Kultorvet til Nørre Voldgade i 2009 samlet blot 15.225 m². Således er der i løbet af 10 år blevet

tilført nyt butiksareal svarende til, hvad Købmagergade i sin helhed udgjorde i 2009 ( figur 29).

Den opgjorte arealtilførsel omfatter konvertering af erhvervsareal, udbygning af ejendomme samt opførelse heraf, og store projekter som føromtalte Berlingske Karré samt også Postgården udgør naturligvis en stor del af denne tilføjelse; men også særligt konverteringer af tidligere banklokaler udgør en væsentlig andel. Projekter færdiggjort før 2009 er ikke omfattet af opgørelsen, og endnu uindviede projekter er ligeledes ikke registreret.

Den aktuelle tomgangsprocent på Københavns primære handelsgader skal således ses i lyset af, at det samlede butiksareal i middelalderbyens attraktive områder er blevet udvidet med en størrelse som i alt overstiger det areal, som Købmagergade samt Frederiksborggade fra Kultorvet til Nørre Voldgade udgjorde frem til året 2009.

Det er således ikke vores vurdering, at en høj tomgangsprocent i markedets primære gader absolut er udtryk for en generelt faldende efterspørgsel blandt lejerne. Vi vurderer derimod, at netop den øgede butiksmasse potentielt har mættet markedet på nuværende tidspunkt.

Figure 29: Added retail space in a 10-year period (2009-2019) 80,000

75,378

70,000 60,000

Købmagergade & Frederiksborggade

60,241

Strøget

50,000 40,000 30,000 20,000 10,000 0

Area added

2009

2019

72 // RED - Danish Investment Atlas 2020

Over a 10-year period, a combined area of 15,137 retail sq m have been added to the Copenhagen high street, which equals an increase of 25%. The added retail space amounts to roughly the combined retail space in Købmagergade and Frederiksborggade in 2009.

RED arranged the lease of Niels Hemmingsens Gade 28 to the Danish interieur store Kitchen Living Dining

This was part of a general trend that has added a great amount of square meters to the market specifically designed for modern retail. The development has also ensured a greater potential geographical distribution of concept stores. Even though The North Face, Marimekko and Camper have subsequently moved to Købmagergade and Strøget, respectively, it does not seem very likely that all of these companies would have chosen a secondary location in the years prior to 2009 if

the area, property and premises were not designed specifically for that purpose.

Still high vacancy rates in the Copenhagen high streets When we look at the vacancy rates for Copenhagen’s primary high streets, Købmagergade and Strøget, the vacancy rates should be seen in the context of the development that has taken place over the past decade - from 2009 to 2019. At the end of 2019, the vacancy rate in retail areas for ground floor locations on Strøget, Købmagergade and Frederiksborggade from Kultorvet to Nørre Voldgade was at 13.89%, equivalent of 9,338 sq m. A lot has been written about the supply of available retail leases in Copenhagen in the last year, and we are not dismissing the fact that the current vacancy rates indicate that the market is faring worse than before. However, it is interesting to view the current vacancy rates in the context of the combined growth in area size of the market for retail properties in central Copenhagen.

Additional 15,137 sq m retail in Copenhagen the past 10 years Our analysis highlights that in a 10-year period (2009-2019), a total amount of 15,137 sq m ground floor retail space was added to Copenhagen high

streets. In comparison, in 2009, Købmagergade and Frederiksborggade from Kultorvet to Nørre Voldgade had a total retail area that only amounted to 15,225 sq m. Thus, in the last decade, the new retail areas that have been added exceeds the total retail area of Købmagergade in 2009 ( figure 29).

The new areas in the calculation include conversions, expansions of existing properties and new construction. Major projects, such as Berlingske Karré and Postgården represents a great part of these new areas. However, another significant proportion of the new areas comes from the conversion of banks. The projects completed before 2009 are not included in these calculations, and neither are projects that have not been initiated.

The current vacancy rates in Copenhagen’s primary high streets should be viewed in the context of the aforementioned retail space increase of 15,137 sq m the past 10 years in the Copenhagen high streets. Therefore, we do not assess that a high vacancy rate in the primary high streets are an absolute indication of a general decrease in demand from tenants. Rather, we believe that the increased retail space has potentially saturated the market for the time being.

73

RETAIL

Development of secondary high streets In the autumn of 2009, the Danish real estate company, Jeudan, finished the reconstruction of the property Berlingske Karré on Gammel Mønt, Sværtegade, Pilestræde and Antonigade. Subsequently, the American company The North Face, the Finnish company Marimekko and the Swedish company Lexington all became neighbours in the old printing facility facing Gammel Mønt. On the other side of the shopping arcade, the German company Marc O’Polo opened next to the Italian one, Marlboro Classics, and the Spanish company Camper opened a store facing Antonigade. The reconstruction of Berlingske Karré was a natural continuation of the development that the neighbouring shopping arcade, Galleri K, had begun years before.

RETAIL - FORVENTNINGER TIL 2020 RETAIL - EXPECTATIONS FOR 2020 Krisebilledet indenfor retail er ikke sort-hvidt Investorerne udviste i 2019 en mere tøvende adfærd end tidligere, hvilket er tydeligt ud fra transaktionsvolumen, der faldt markant i forhold til 2018. Dette skyldes især, at de internationale ejendomsfonde er blevet mere tøvende i forhold til at investere i retail-ejendomme, og at antallet af store transaktioner er faldet. Hertil ses, at lejerne fortsat kæmper med at skabe den rette omni-channel-strategi, der kan understøtte deres fysiske butikker, hvilket har medført øget tomgang mange steder, hvor lejerne ikke har kunnet skabe tilstrækkelig omsætning til at drive en rentabel forretning.

Det er dog vores opfattelse, at risikoen er meget aktiv-specifik, og at der stadig i 2020 vil være investorer til bl.a. de absolut stærkeste strøgbeliggenheder med stærke lejere. Ligeledes vurderer vi også på lejermarkedet, at der fortsat i 2020 vil være lejeefterspørgsel på de bedste placeringer, såsom Amagertorv i København. På den anden side er det også klart, at der på dele af strøggaderne såsom Frederiksberggade vil gå længere tid, før investorerne og lejerne for alvor begynder at se fremgang. For sekundært beliggende retail, forventes både investor- og lejerinteressen at være lav i det kommende år.

Indenfor shoppingcenter-segmentet forventer vi tilsvarende et mere nuanceret billede, hvor sekundære centre vil være vanskeligt omsættelige, mens stærke, veldrevne centre fortsat vil kunne tiltrække investorer. Fælles for alle shoppingcentre er dog, at der fortsat skal arbejdes meget aktivt med at skabe oplevelser, F&B og andre services, der er med til at tiltrække kunder og fastholde dem i længere tid, for derved at holde centrene attraktive.

RED INVESTOR SURVEY RED foretager to gange årligt en forventningsundersøgelse blandt de største og mest aktive investorer i Danmark. Det sås særligt fra 2018 til 2019, at de adspurgte investorer var blevet markant mere pessimistiske indenfor retail – både for så vidt angår den forventede efterspørgsel fra lejernes side og prisudviklingen. Primo 2020 forventer 54% af investorerne fortsat lavere lejeefterspørgsel og ringere udlejningsvilkår, hvilket er en minimal stigning på 4% fra sidste år. Derimod forventer 14% af investorerne en forbedring af lejeefterspørgslen, hvilket er højere end sidste års 4% ( figur 30). Den store overraskelse i år er imidlertid, at hele 18% forventer lavere afkast på retailaktiver i løbet af 2020, hvorimod kun 4% for-

ventede lavere afkast i 2019. Derudover forventer en lavere andel af investorerne stigende afkast i løbet af 2020, hvilket tyder på en mere optimistisk holdning til retailsegmentet i forhold til sidste år ( figur 31).

FORVENTNINGER TIL 2020 Vi forventer at der fortsat vil være mange udfordringer indenfor retailsegmentet i 2020, men at det vil være et mere nuanceret billede vi vil se. I 2020 forventer vi at se: F ørste års afkast på de bedste strøgbeliggenheder i København med stærke lejere og gode lejekontrakter vil være uændret i niveauet 3%, mens der vil være et opadgående pres på afkastet, så snart aktivet har en svagere placering eller kræver mere aktiv asset management; også på strøgbeliggenheder.

Fortsat fokus på at skabe mere attraktive shoppingcentre for kunderne for at skabe et flow gennem F&B, oplevelser, og andre services.

Transaktionsvolumenen i 2020 vil forventeligt blive højere end i 2019 trods usikkerheden i markedet.

Figure 30: Investor Confidence Index - Retail occupier demand

Figure 31: Investor Confidence Index - Retail yields

With regard to the occupier market for retail space during 2020, the demand on the occupier market will:

With regard to the development of yields for retail properties during 2020, market yields will:

4%4%

100% 100%

100% 100%

100% 100% 14% 14%

Improve Improve Show Show little little oror nono change change

46% 46%

32% 32%

100% 100% 23% 23%

Remain Remain stable stable

48% 48%

Worsen Worsen

Decline Decline 59% 59%

50% 50%

54% 54%

Q1 Q1 2019 2019 Q1 Q1 2020 2020

74 // RED - Danish Investment Atlas 2020

Increase Increase

48% 48% 18% 18% 4%4% Q1 Q1 2019 2019 Q1 Q1 2020 2020

The perceived retail crisis is not black and white The investors in 2019 were more hesitant than before, which is clear from the transaction volume that decreased significantly compared to 2018.

This was particularly due to foreign property funds becoming more hesitant when it comes to retail investments and the fewer large transactions. On top of this, we are still witnessing that tenants are struggling to create the right omnichannel strategy that can support their physical stores. This has resulted in an increase in vacancy rates in places where tenants have not succeeded in generating sufficient revenues to run a profitable business.

However, in our view, the risk is very asset specific, and we believe that investments in e.g. the absolute best Copenhagen high street locations with strong tenants will continue in 2020. Similarly, when it comes to the tenants, it is our assessment that the demand from tenants for the best locations, such as Amagertorv in Copenhagen will continue in 2020. On the other hand, it is also clear that some parts of the Copenhagen high streets such as Frederiksberggade, will need more time before investors and tenants really begin to see progress. Regarding secondary locations, it is expected that interest from both investors and tenants will be low in 2020.

In the shoppingcentre segment, we also expect a more nuanced picture to emerge, where secondary centres will be difficult to sell while strong, well-run shopping centres will remain attractive to investors. What applies to all shopping centres, however, is that they will need to keep actively working to create experiences, F&B and other services that attract customers and maintain the attractiveness of the shopping centres.

creasing yields over the course of 2020. This indicates a more optimistic view of the retail segment compared to last year ( figure 31).

RED INVESTOR SURVEY

Â&#x2020; T he net initial yields on the best Copenhagen high street locations with strong tenants and strong leases will be unchanged at around 3%, while there will be an upward pressure on the yields as soon as the assets are in less attractive locations or if they require more active asset management - this also applies to Copenhagen high street locations. Â&#x2020; A continued focus on creating more attractive shopping centres for customers, in order to create a flow between F&B, experiences and other services. Â&#x2020; The transaction volume in 2020 will presumably be higher than in 2019, despite the uncertainty surrounding the market.

Twice a year, RED conducts a survey of expectations among the largest and most active investors in Denmark. From 2018-2019, it was evident that investors had become much more pessimistic about retail - both in terms of the expected demand from tenants and the yield development. In 2020, 54% of the investors expect lower demand from tenants and worse rent conditions, which is a minimal increase of 4% from last year. On the other hand, 14% of the investors expect more demand for leases, which is higher than the 4% last year ( figure 30). The great surprise of this year, however, is that a whole 18% expect lower yields on retail assets over the course of 2020, compared to the 4% who expected that in 2019. In addition, a lower proportion of investors are expecting in-

EXPECTATIONS FOR 2020 We expect that the retail segment will continue to be challenged in 2020, but it will be a more nuanced picture. In 2020, we expect to see:

RETAIL

The Cushman & Wakefield | RED Investor Confidence index The Index for Denmark include responses from 70 of the most active investors in Denmark in the years 2019 and 2020. The index monitors expectations from highly active investors in the Danish market for the next six months.

The broad coverage reflects the interest for non-biased objective analyses 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.

75

RETAIL - TRANSAKTIONER OG NØGLETAL RETAIL - TRANSACTIONS AND KEY FIGURES Retail - Top 30 transactions 2019 Asset name

Area

Date

Size sq m

Price DKK

Investor

Vendor

1

Regina Building

Aarhus C

April

12,200

540,000,000

Industriens Pension

Aberdeen Standard Investments

2

Købmagergade 42

CBD

November

3,641

300,000,000

CapMan

Private investor

3

Vimmelskaftet 46-48

CBD

January

3,792

200,000,000

Bank of Montreal

Aberdeen Standard Investments

4

Bytorv Horsens

Horsens

August

5,927

190,000,000

Scandinavian Shopping Center Partners

Jyske Realkredit

5

Købmagergade 25

CBD

August

1,394

179,000,000

Aachener Grundvermögen

CapMan

6

Otto Mønsteds vej 1

Aalborg SV

February

6,444

103,000,000

KFI Erhvervsdrivende fond

Private investor

7

City 3

Slagelse

February

9,545

99,200,000

Private investor

Private investor

8

2G Shopping

Glostrup

April

11,867

95,000,000

Park Street Nordicom

Jyske Bank

9

Asger Jorns Allé 2 st. og 12 st.

Copenhagen S

April

2,650

94,387,340

Rema Butiksejendomme

NREP

10

Vonsildvej 1

Kolding

March

4,680

77,750,000

Jysk Holding

HESØ Group

11

5210 Shopping

Odense NV

November

4,814

72,210,000

Private investor

Private investor

12

Butikscentret Hasseris Bymidte

Aalborg

March

3,314

53,500,000

Private investor

DNP Ejendomme

13

Færch-huset

Holstebro

February

6,387

48,740,000

Fritz Henrik Schur

Private investor

14

Strandvejen 22A

Copenhagen E

August

1,857

45,000,000

Private investor

Sampension

15

Frederikssundsvej 86

Copenhagen NW

April

2,896

45,000,000

KFI Erhvervsdrivende fond

Rema Butiksejendomme

16

Drejervej 2

Copenhagen NW

May

1,170

43,750,000

Lidl Danmark

Private investor

17

Skansevej 4

Hillerød

March

1,056

41,200,000

ATP

Private investor

18

Støberigade 27

Copenhagen SW

July

1,069

40,425,000

KFI Erhvervsdrivende fond

KPC

19

A.L.Passagen 1-17 mfl.

Kolding

April

3,494

40,000,000

Private investor

Private investor

20

Bredgade 24A

Herning

October

2,031

39,700,000

Private investor

Private investor

21

Højengen 3

Kokkedal

September

2,115

39,394,582

SG Nordic

Ejendomsselskab

22

Industrivej 56

Roskilde

June

1,800

39,100,000

Ejendomsselskab

Private investor

23

Esrumvej 145

Helsingør

October

1,200

36,000,000

Private investor

Rema Butiksejendomme

24

Roskildevej 323A

Taastrup

February

4,001

35,000,000

Private investor

NCC

25

Nordcentret

Frederiksværk

September

5,064

35,000,000

Private investor

Private investor

26

Regimentsvej 2

Farum

April

1,007

35,000,000

KFI Erhvervsdrivende fond

Rema Butiksejendomme

27

Gammel Lyngvej 2B

Køge

July

4,114

31,500,000

User

Pears

28

Wendorfsvej 4

Fredensborg

October

2,542

30,000,000

Private investor

Ejendomsselskab

29

Gammelby Ringvej 2

Esbjerg

October

1,200

30,000,000

Private investor

Institutional Investor

30

Gammelgårdsvej 93

Farum

October

2,665

28,000,000

Private investor

Pears

76 // RED - Danish Investment Atlas 2020

Retail - Prime rent and vacancy levels Q1 2020 Street name

Rent level DKK Zone A

Amagertorv

33,000

3.73%

-4.93

Østergade

30,000

8.25%

4.04

Købmagergade

26,000

19.66%

6.15

Vimmelskaftet

22,000

17.76%

2.56

Nygade

22,000

10.17%

-0.75

Frederiksborggade

16,000

10.85%

0

Frederiksberggade

15,000

26.06%

-4.36

Kronprinsensgade

Vacancy - Q1 2020

Change in vacancy 2019-2020 (%-points)

11,000

N/A

N/A

Berlingske

9,000

N/A

N/A

Grønnegade

8,000

N/A

N/A

Østerbrogade

5,000

N/A

N/A

Gammel Kongevej

4,000

N/A

N/A

Nørrebrogade

3,000

N/A

N/A

Lyngby

8,500

N/A

N/A

Retail - Yield levels Q1 2020 Street name

Yield level*

Copenhagen - Prime high street (Amagertorv, Købmagergade and Østergade)

3.00%

Copenhagen - High street (Vimmelskaftet, Nygade and Frederiksborggade)

3.25%

Copenhagen - Secondary high street (Frederiksberggade)

3.75%

Copenhagen - High street area (Kronprinsensgade)

4.00%

Copenhagen - Østerbrogade

4.25%

Copenhagen - Gl. Kongevej

4.25%

Copenhagen - Nørrebrogade

4.75%

Copenhagen area - Lyngby

4.50%

*In case of share transactions, this will impact yields, due to defered taxes.

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).

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

Source: C&W | RED

RED assisted Axel Arigato in opening their first store in Denmark on PilestrĂŚde 16.

RETAIL

In 2015, RED acted as advisor on the sale of the former conservatory at Niels Brocks Gade 1 to the Swedish real estate company Balder. Balder has since developed the property into a five-star luxury hotel and RED is acting as ongoing advisor for the client.

HOTEL // HOTEL Investeringsmarkedet 2019 // Investment market 2019................................ 80 Volumen & Investorer 2019 // Volume & Investors 2019................................ 82 Top 5 transaktioner 2019 // Top 5 transactions 2019...................................... 84 Highlights // Highlights........................................................................................... 86 Forventninger til 2020 // Expectations for 2020.............................................. 88

HOTEL

Transaktioner og pipeline // Transactions and pipeline................................. 90

HOTEL - INVESTERINGSMARKEDET 2019 HOTEL - INVESTMENT MARKET 2019

Positiv udvikling i hotelsegmentet På trods af at den overordnede transaktionsvolumen er faldet med 21% fra 2018 til 2019, var der positiv udvikling i hotelsegmentet, hvor volumen steg fra 2,0 mia. kr. til 3,7 mia. kr. svarende til en stigning på 87% ( figur 32). Hotelsegmentet er dermed det eneste segment, der i 2019 vækster i forhold til 2018. Listen over transaktioner viser samtidigt, at investorerne fortsat har appetit på store og velbeliggende hotelejendomme.

Transaktionsvolumen for hotelsegmentet i Danmark har generelt være præget af enkelte store handler, og 2019 var ingen undtagelse. De tre handler, hhv. Admiral Hotel i København K, Marienlyst Strandhotel i Helsingør og Hotel Crown Plaza i Ørestaden udgjorde tilsammen ca. 68% af hotelvolumen, svarende til 2,5 mia. kr. Dette var ligeledes gældende i 2017, hvor salget af hotel Bella Sky til 1,6 mia. kr. sammen med Comwell i Nordhavn til 775 mio. kr. udgjorde en stor del af volumen og i 2018 var det salget af Scanport

Positive development in the hotel segment Despite the overall transaction volume declined by 21% from 2018 to 2019, there was a positive development in the hotel segment, where volumes grew from DKK 2.0 bn to DKK 3.7 bn - an increase of 87% ( figure 32). The hotel segment is thus the only property segment that grew in 2019 compared to 2018. The transactions of 2019 also reveal that investors continue to have an appetite for large hotel properties on prime locations.

The transaction volume for the hotel segment in Denmark has traditionally been characterised by a few large individual transactions, and 2019 was no exception. The three largest transactions involved Admiral Hotel in central Copenhagen, Marienlyst Strandhotel in Helsingør and Crown Plaza in Copenhagen S which together accounted for 68% of the hotel volume, or DKK 2.5 bn. This trend was also seen in 2017 where the sale of Hotel Bella Sky for DKK 1.6 bn and Comwell in Nordhavn for DKK 775 m represented a large part of the transaction

82 // RED - Danish Investment Atlas 2020

ved Lufthavnen til 720 mio. kr., som dominerede hotelsegmentet.

udelukkende er de største transaktioner, som lokker den udenlandske kapital til.

Foruden de tre største hotelhandler i 2019, er de resterende hotelhandler primært i København, men også større provinsbyer som Roskilde, Lyngby, Fredericia og Esbjerg er at finde på transaktionslisten. Dette vidner om, at hotelinvesteringer også er attraktive udenfor København, hvor hotellerne f.eks. tilbyder konferencefaciliteter, såfremt hotellerne er udlejet til stærke operatører.

Ejendomsselskaber og ejendomsfonde køber hoteller i København Af den samlede transaktionsvolumen i 2019 stod ejendomsselskaber og ejendomsfonde for 80% af handlerne, fordelt med 62% til ejendomsselskaberne og 18% til ejendomsfondene ( figur 33).

Det skal her bemærkes, at hoteltransaktioner udgør et væsentligt mindre marked end eksempelvis kontor og bolig, og er fordelt på få, men store handler, hvorfor datagrundlaget ikke bør tolkes som et udtryk for en entydig tendens.

De udenlandske investorer dominerer De tre største hotelhandler i 2019 blev alle foretaget af svenske investorer; Midstar som både købte Marienlyst Strandhotel og kort tid derefter Admiral Hotel, og svenske Niam som købte Crown Plaza Hotel. For så vidt angår de 14 resterende hoteltransaktioner i 2019, er disse alle købt af danske investorer. Der tegner sig generelt et billede af, at hotelhandler under 100 mio. kr. primært handles af danske investorer, og at det nærmest

volume - and in 2018, it was the selling of Scanport

by Copenhagen Airport for DKK 720 m which dominated the volume for the hotel segment.

Besides the three largest hotel transactions in 2019, the remaining hotel transactions are mainly to be found in Copenhagen, but there were also some in larger cities outside of Copenhagen, such as Roskilde, Lyngby, Fredericia and Esbjerg. This indicates that hotel investments are also attractive outside of Copenhagen, provided such hotels are leased to strong operators.

Foreign investors dominate the market The three largest hotel transactions in 2019 were all made by Swedish investors. Midstar first bought Marienlyst Strandhotel and shortly after Admiral Hotel, and Niam bought Crown Plaza Hotel in Copenhagen S. The 14 remaining hotel transactions in 2019 were all made by Danish investors.

Overall, it is noticed that hotel transactions under DKK 100 million mainly involved Danish investors,

74% af investeringerne er foretaget i København og Storkøbenhavn ( figur 34). Af signifikante handler uden for København kan Marienlyst Strandhotel på ca. 520 mio. kr. og Scandic portføljen (Aarhus & Roskilde) på 200 mio. kr. nævnes.

while it was almost exclusively international capital behind the largest transactions.

Real estate companies and property funds are buying hotels in Copenhagen Of the total transaction volume in 2019, real estate companies and property funds were behind 80% of the transactions - 62% and 18%, respectively ( figure 33). Here it should be noted that hotel transactions represent a significantly smaller market than, for example, the office and residential segments, and it consists of fewer but larger transactions. Therefore, the underlying data should not be interpreted as a clear trend.

74% of the investments were made in Copenhagen and the Greater Copenhagen area ( figure 34). When it comes to significant transactions outside of Copenhagen, noteworthy properties include Beach Hotel Marienlyst which was sold for DKK 520 m and the Scandic portfolio (Aarhus and Roskilde) which was sold for DKK 200 m.

Figure 32: Hotel - Transaction volume 2012-2019

5.1

5

20% 4 3.7 23%

3.0

BN DKK

3

2.6

24%

0

76%

73%

1.5

1.3

1.2 1

2.0

80%

2

61%

77%

49%

37%

66% 34% 2012

2013

63%

51%

27%

2014

2015

2016

Danish

Source: C&W | RED

Figure 33: Hotel - Investor type breakdown 2019

HOTEL VOLUME

3.7 BN DKK

39%

2017

2018

2019

Foreign

Figure 34: Hotel - Geographic breakdown 2019

Real estate company 62% Property fund 18% Private investor 8% Other 7% Institutional investor 5%

HOTEL VOLUME

3.7 BN DKK

Copenhagen 69% Rest of Dennmark 26% Greater Copenhagen 5% Source: C&W | RED

Source: C&W | RED

HOTEL VOLUME

3.7 BN DKK

Real estate company 62% Property fund 18% Private investor 8% Other 7% Institutional investor 5% Source: C&W | RED

3.7 3.7

HOTEL VOLUME

BN DKK

BN DKK

Real estate company 62% Copenhagen 69% Property fund 18% 26% Rest of Dennmark Private 8% Greaterinvestor Copenhagen 5% Other 7% Source: C&W | RED Institutional investor 5% Source: C&W | RED

83

HOTEL

HOTEL VOLUME

HOTEL - VOLUMEN & INVESTORER 2019 HOTEL - VOLUME & INVESTORS 2019

HOTEL VOLUME

2.5 BN DKK

COPENHAGEN Danish 9%

3.7

Danish 23% Foreign 77%

BN DKK

Foreign 91%

69%

0.2 BN DKK

JUTLAND

GREATER COPENHAGEN Danish 100% Foreign 0%

5%

2.5 BN DKK

COPENHAGEN Danish 9%

2.5

Foreign 91%

69%

BN DKK

COPENHAGEN Danish 9% Foreign 91%

69%

1.0 BN DKK

REST OF DENMARK

GREATER COPENHAGEN

Danish 44% Foreign 56%

26%

0.2 BN DKK

GREATER COPENHAGEN Danish 100%

0.2

Foreign 0%

5%

BN DKK

5%

GREATER COPENHAGEN Danish 100% Foreign 0% COPENHAGEN

ZEALAND

3.0 BN DKK

AARHUS Danish 58% FUNEN Foreign 42%

17%

1.0 BN DKK

REST OF DENMARK Danish 44%

1.0

Foreign 56%

26%

BN DKK

REST OF DENMARK Danish 44% Foreign 56%

26%

1.9 BN DKK

84 // RED - Danish Investment Atlas 202011%

JUTLAND & FUNEN

Source: C&W | RED

Danish 57% Foreign 43%

3.0 BN DKK

17%

AARHUS Danish 58%

3.0

Foreign 42%

BN DKK

AARHUS Danish 58% Foreign 42%

Svenske investorer dominerer årets hotelinvesteringer i København Den mest aktive investor i 2019 var det svenske hotelinvesteringsselskab Midstar, som med købet af Admiral Hotel og Marienlyst Strandhotel stod for ca. 52% af den samlede volumen, svarende til en samlet handelspris på ca. 1,9 mia. kr. Den næststørste investor var svenske Niam med købet af kontor- og hotelkomplekset Copenhagen Towers, hvor Hotel Crown Plaza med 336 værelser var en betydelig del af investeringen.

Hotel transactions (BN DKK) Area

2018

2019

Change

Copenhagen

0.7

2.5

255%

Greater Copenhagen

0.8

0.2

-75%

Rest of Denmark

0.5

1.0

94%

Total

2.0

3.7

87%

Source: C&W | RED

Swedish investors are dominating hotel investments in Copenhagen The most active investor in 2019 was Swedish Midstar, an asset management company focused on hotel real estate investments. With the acquisition of Admiral Hotel and Marienlyst Strandhotel, Midstar was behind 52% of the total transaction volume, or a total of DKK 1.9 billion in transactions. The second-largest investor was another Swedish company, Niam, which bought the office and hotel complex Copenhagen Towers - which includes Hotel Crown Plaza with 336 rooms.

Hotel - Top 5 investors 2019* Investor

Origin

Volume (in M DKK)

No. of transactions

1

Midstar

SE

1,920

2

2

NIAM

SE

550

1

3

PFA Ejendomme A/S

DK

188

1

4

Cofoco

DK

115

1

5

Thylander Gruppen

DK

95

*if possible portfolios are split into individual transactions

1 Source: C&W | RED

Hotel - Top 5 investors 2012-2019* Origin

Volume (in M DKK)

No. of transactions

1

Nordic Choice Hotels

NO

3,300

5

2

Midstar

SE

2,700

4

3

Wenaasgruppen

NO

1,600

1

4

KLP Ejendomme

NO

1,000

2

5

AB Balder

SE

900

6

*if possible portfolios are split into individual transactions

Source: C&W | RED

85

HOTEL

Investor

HOTEL - TOP 5 TRANSAKTIONER 2019 HOTEL - TOP 5 TRANSACTIONS 2019 Photo: Copenhagen Admiral Hotel

1: COPENHAGEN ADMIRAL HOTEL The largest hotel transaction of the year was the Swedish hotel investment company Midstar’s acquisition of Copenhagen Admiral Hotel in November 2019 at a price of approximately DKK 1.4 bn. The hotel, which has 366 rooms, is a former dockside warehouse close to the royal palace, Amalienborg. The property was erected in 1878 and converted into a hotel in 1978. The hotel is currently undergoing a major renovation, which is expected to be finished during 2020. Copenhagen Admiral Hotel was previously owned by a number of private investors.

Price DKK:

Investor:

1,400,000,000

Midstar

Sq m:

Vendor:

17,893

Private investor

Photo: Skyfish Thomas Rockall Muus

2: CROWN PLAZA COPENHAGEN The iconic property complex Copenhagen Towers, located in the Ørestaden area, was sold to the Swedish investor Niam in September 2019. Copenhagen Towers consists of three towers, comprising two office buildings and a hotel building. The four-starred hotel, Crown Plaza Copenhagen, was sold at a price of DKK 550 m. The hotel has 366 rooms and a total area of 23,900 sq m. With rewards such as “World’s Greenest Hotel” and “Most Cutting Edge Green Hotel in the World” the hotel is perceived as a role model within green hotel operations.

86 // RED - Danish Investment Atlas 2020

Price DKK:

Investor:

550,000,000

NIAM

Sq m:

Vendor:

23,900

Solstra

Photo: Konference.dk

3: BEACH HOTEL MARIENLYST One of the oldest and best seafront hotels in Denmark, Beach Hotel Marienlyst, changed owners in August 2019. The hotel investment company Midstar acquired the seafront hotel from the Danish property fund Artha Kapitalforvaltning at an estimated price of DKK 520 m. The change of owners also included a change of operator, so that ESS Group, who already operates several other seafront hotels, now operates Beach Hotel Marienlyst. The hotel currently has 225 rooms and have received approval on an expansion of 55 new rooms.

Investor:

520,000,000

Midstar

Sq m:

Vendor:

17,348

Artha Kapitalforvaltning

In the summer of 2019 the Danish real estate investor, Michael Kaa Andersen, acquired two Scandic Hotels from private investors. The two hotels are located in Aarhus and Roskilde and have 151 and 98 rooms respectively. The hotel located in Roskilde has recently been thoroughly renovated and conference facilities have been added. Scandic has operated both hotels since 1989 and will continue to do so under the new ownership. The total selling price of the two hotels were approximately DKK 200 m.

Price DKK:

Investor:

200,000,000

Private investor

Sq m:

Vendor:

12,957

Private investor

Photo: Scandic Jesper Rais

4: SCANDIC PORTFOLIO

Photo Zleep Hotel

Photo: Zleep Hotel

5: LUNDTOFTEGĂ&#x2026;RDSVEJ 12 Driven by international megatrends, including a growing demand for experiences and tourism, the Danish pension fund, PFA Ejendomme, invested in their fifth hotel project in Denmark in December 2019. Benjamin Capital sold the hotel project to PFA Ejendomme at a price of DKK 187.5 m. When the hotel project, located in Kongens Lyngby, opens in the summer of 2020 it will consist of a hotel with 78 rooms, 34 hotel apartments and a fitness center.

Zleep Hotels and Fitness World will be operators in the property.

Price DKK:

Investor:

187,500,000

PFA Ejendomme A/S

Sq m:

Vendor:

5,460

Benjamin Capital

87

HOTEL

Price DKK:

HOTEL - HIGHLIGHTS HOTEL - HIGHLIGHTS

Hotelsegmentet står stærkt i et faldende marked Året 2019 bød på flere store hotelhandler, og hotelinvesteringer stod overordnet stærkt i et marked, hvor vi generelt har oplevet en faldende transaktionsvolumen. En årsag til den fortsat høje transaktionsvolumen for hoteller i København kan delvist tilskrives den særdeles positive udvikling i turisme – og dermed gunstige underlæggende efterspørgselsforhold for operatørerne og mulighed for omsætning for hotellerne i København ( figur 35).

Hotelomsætningen i Danmark er vokset med ca.

32% siden 2013. Generelt går det godt for de danske hoteller, hvilket blandt andet kommer til udtryk ved, at antallet af konkurser for store hoteller er faldende. I årene 2013 – 2018 er blot 4 hoteller i Danmark med en omsætning over 15 mio. kr. begæret konkurs.

Forbliver København en attraktiv turistdestination?

Turismen i Danmark og specielt i København er vokset kraftigt de seneste 15 år, hvilket blandt andet afspejler sig i antallet af overnatninger, der for København er fordoblet siden 2003. Denne

The hotel segment is in good shape in a declining market Several major hotel transactions took place in 2019, and hotel investors were quite dominant in a market with an overall decreasing transaction volume. One of the reasons for the continued high transaction volume for hotels in Copenhagen can be attributed to the positive development in the tourism industry - and thus, favourable underlying demand for hotel operators and ample opportunities to increase turnover for hotels in Copenhagen ( figure 35).

In Denmark, hotels have increased their turnover by approximately 32% since 2013, and generally speaking Danish hotels are faring well. Among

88 // RED - Danish Investment Atlas 2020

fordobling af hotelovernatninger har lagt et større pres på hotelkapaciteten – specielt i de travle sommermåneder. På trods af en stor stigning i antal overnatninger, har København de sidste 10 år ikke udvidet antallet af hotelværelser i samme omfang som turismen er vokset, hvilket kan tilskrives, at hotelbranchen var under pres i årene efter finanskrisen, samt at der ofte er en forsinkelse på udbuddet af ejendomme, da byggeprocesser kan tage op til 3 år fra begyndelse til færdigt hotel.

Den positive udvikling i antallet af turister har været konstant stigende med en vækst på 5-6% pr. år, og udviklingen viser i øjeblikket ingen tegn på en afkøling. Vi ser, at middelklassen på verdensplan løftes økonomisk og i takt dermed stiger turismen; med en tredobling i antallet har særligt de kinesiske turister indtaget de Københavnske hoteller de seneste 10 år. De fleste turister kommer dog fortsat fra de nærliggende lande, Norge, Tyskland, Sverige og England, og udgør i alt 45% af de udenlandske turister i København.

Airbnb – slut med ulovlig hoteldrift Airbnb har siden platformens indtog på det danske marked været udsat for megen kritik, særligt

other things, this is depicted by the declining number of major hotel bankruptcies as from 20132018, only four hotels in Denmark with a turnover in excess of DKK 15 m filed for bankruptcy.

Will Copenhagen remain an attractive tourism destination?

Tourism in Denmark, and especially in Copenhagen, has grown rapidly for the last 15 years, which is reflected by the number of bed nights sold by Copenhagen’s hotels which have doubled since 2003. This doubling of bed nights have put pressure on the hotel capacity - especially during the busy summer months. Despite a large increase in the number of bed nights, in the last ten years, Copenhagen has not increased the number of hotel

fra hotelbranchen som argumenterede for unfair markedsvilkår, mens mange danskere var glade for at tjene lidt ekstra penge ved at udleje deres bolig, mens de var på ferie.

Der findes ikke officielle data på antallet af Airbnb overnatninger, men tal offentliggjort af Airbnb selv indikerer, at platformen allerede i 2017 og tilsvarende i 2018 formidlede ca. 500.000 årlige overnatninger i København, hvilket uden tvivl har gjort indhug i kundegrundlaget for de Københavnske hoteller.

Den politiske indflydelse gør sig dog nu gældende på Airbnb-markedet, hvor en ny lovgivning, der har til formål at begrænse udlejning via Airbnb, er trådt i kraft. Således er der nu et loft på 70 dage årligt for udlejning af sin bolig gennem Airbnb og andre udlejningsportaler, ligesom Airbnb har indvilliget i at indberette brugerne til SKAT. Det må dog antages at Airbnb har absorberet en del af den voksende turisme i København, og på trods af en udlejningsbegrænsning på 70 dage, forventer vi ikke, at dette vil have en signifikant betydning for de fleste Airbnb-udlejere.

rooms to the same extent that tourism has grown.

This is due to the hotel industry being under pressure in the years following the financial crisis and also because new supply of properties are delayed, as it can take up to three years to complete the development of a large hotels.

The number of tourists have been growing at a constant rate of 5-6% per year, and at the moment, there are no indications that tourism activity will cool down. Worldwide, the middle class is getting richer and tourism increases as the middle class increase their disposable income. In particular, the Chinese tourists have been fond of Copenhagen in the past ten years, where the number of Chinese tourists almost tripled in number during

that period. Most tourists, however, are still from nearby countries such as Norway, Germany, Sweden and the UK, and together they represent 45% of the international tourists visiting Copenhagen.

Airbnb - no more illegal hotel operations Airbnb has faced a lot of criticism since it arrived on the Danish market, especially from the hotel industry, which has argued against Airbnb on the grounds of unfair competition â&#x20AC;&#x201C; meanwhile many Danes were happy to earn some extra money from renting their homes during holidays.

There are no official statistics on the number of sold Airbnb bed nights, but numbers released by Airbnb indicates that in 2017 and 2018 they facilitated approximately 500,000 yearly accommodations via the platform. There is no doubt that this has taken away business from Copenhagenâ&#x20AC;&#x2122;s hotels.

Airbnb and other portals, and Airbnb has also agreed to report user earnings to the Danish Tax Authorities. It must still be assumed that Airbnb has absorbed some part of the growing tourism in Copenhagen, and despite rentals now being limited to 70 days per year, we do not expect that this will have a significant impact on the overall accommodations booked via Airbnb.

Politicians have now decided to act, and new legislation is now in effect which aims to limit Airbnb exploitation. As a consequence, you can now only rent out your home for 70 days per year via

Figure 35: Hotel - Copenhagen City monthly bednights 2014-2019 2,500,000

2,000,000

1,500,000

1,000,000

2019M10

2019M07

2019M04

2019M01

2018M10

2018M07

2018M04

2018M01

2017M10

2017M07

2017M04

2017M01

2016M10

2016M07

2016M04

2016M01

2015M10

2015M07

2015M04

2015M01

2014M10

2014M07

2014M04

2014M01

500,000 2014M01 2014M04 2014M07 2014M10 2015M01 2015M04 2015M07 2015M10 2016M01 2016M04 2016M07 2016M10 2017M01 2017M04 2017M07 2017M10 2018M01 2018M04 2018M07 2018M10 2019M01 2019M04 2019M07 2019M10

Not seasonally adjusted

Seasonally adjusted

89

HOTEL

Source: Statistics Denmark

HOTEL - FORVENTNINGER TIL 2020 HOTEL - EXPECTATIONS FOR 2020

Kapaciteten stiger – følger efterspørgslen med?

Et tilbagevendende tema i 2019 var udsigterne til en stor tilførsel af værelser på hotelmarkedet og i hvilken grad, det vil påvirke belægningsprocenterne på særligt de københavnske hoteller. Primo 2020 er der planlagt nye hoteller og udvidelser af eksisterende hoteller med en tilførsel på ca. 8.615 værelser frem til 2024 alene i København. Med en nuværende samlet kapacitet på ca. 17.000 værelser, er der også tale om en kraftig udvidelse – men følger efterspørgslen med ( figur 37)?

Antallet af overnatninger i København steg i 2019 for tiende år i træk og i 2030 forventes antallet af turister i København at være næsten fordoblet fra det aktuelle niveau på ca. 8,8 mio. gæster til ca. 16 mio. gæster. Dette følger en stigning på ca. 75% de foregående 10 år, hvilket har ledt til flere kritiske røster, der ønsker en opbremsning i stigningen på den politiske dagsorden.

mere realistisk at opretholde den høje belægning ( figur 36).

Gamle kendinge og nye brands Efterspørgslen efter egnede lokaler er fra hoteloperatørernes side høj. Den stammer fra både etablerede, skandinaviske hotelkæder, men også mange nye aktører på markedet. Scandic har med flere nyåbninger og fortsat 3 hoteller i pipeline vist, at de satser på København, og også nye navne som 25hours Hotels og Locke gør deres entre i København i de kommende år.

Hotelproduktet er blevet mere alsidigt og kan passes ind flere og flere steder. Lokaler ned til 4.000 m2 efterspørges af nogle operatører og gerne i kombination med coworking, f&b, fitness og andre funktioner. Vi forventer derfor at se flere nye aktører på markedet i de kommende år – små som store.

Trods tilførslen af en stor mængde hotelværelser de seneste år, kan der ikke konstateres en nedgang i belægningsprocenten, der fortsat er høj og stabil omkring 78-79% i København. Med begrænsningen af Airbnb bliver det for hotellerne

FORVENTNINGER TIL 2020

Hotel capacity is growing - will there be a demand for it?

A recurring theme in 2019 was the prospect of a large number of new hotel rooms and to what extent this would affect occupancy rates, particularly for the hotels in Copenhagen. In the beginning of 2020, the pipeline of new hotels and hotel expansions will add approximately 8,615 rooms to Copenhagen by 2024. With a current total capacity of approximately 17,000 rooms, this is a huge expansion - but will there be a demand for it (figure 37)?

Despite the addition of a many new hotel rooms over the last few years, there are no signs of decreasing occupancy rates, which remains high and stable at around 78-79% in Copenhagen. With the limitations imposed on Airbnb, it also becomes more realistic for the hotels to maintain these high occupancy rates (figure 36).

The number of accommodations sold in Copenhagen increased in 2019 for the tenth year in a row, and in 2030, the number of tourists visiting Copenhagen is expected to be almost double of what it is now - an increase from the current approximately 8.8 million visitors to 16 million. This follows an increase of approximately 75% in the past ten years and has resulted in several critical voices appealing for politicians to take action to slow this down.

90 // RED - Danish Investment Atlas 2020

operatører og lange lejekontrakter i de større provinsbyer er fortsat interessante for en række investorer, mens en mere afsides beliggenhed og managementkontrakter fortsat er vanskelige at sælge.

Det er ikke vores forventning, at dette billede vil ændre sig i 2020. Investorerne har deres ”fallback” scenarie for øje, når de køber hoteller, og kvadratmeterprisen skal derfor være på linje med beliggenheden, hvorfor det kun er de københavnske hoteller, der kan sælges til de relativt lave afkast.

Faldet i afkastkravet for kontorejendomme i 2019 vil smitte af på afkastkravet for hotelejendomme, og det er ikke urealistisk, at vi vil registrere, handler med hotelejendomme til afkast, der bevæger sig under 4%.

Mens afkastene falder og værelsespriserne stiger i København, er investeringsaktiviteten fortsat begrænset i provinsen. Hoteller med stærke

Familiar names and new brands There is a high demand for suitable premises from hotel operators. This demand comes from both established Scandinavian hotel chains but also from many new players on the market. With several new openings and three more hotels in the pipeline, Scandic has demonstrated that they see good value in Copenhagen, and there are also new names coming to Copenhagen in the years ahead such as 25Hours Hotels and Locke.

The hotel segment has become more versatile and more and more locations are becoming suitable. Premises all the way down to 4,000 sq m are demanded by some operators, and ideally together with co-working spaces, f&b, fitness facilities

and other functions. Therefore, we expect to see several new players of all sizes entering the market in the years ahead.

EXPECTATIONS FOR 2020 While yields are decreasing and room prices are increasing in Copenhagen, there is still only limited investments seen outside of the major urban areas. Hotels with strong operators and long leases in the large provincial cities remain interesting to several investors, while management contracts in more remote locations remain difficult to sell.

We expect this to be the case in 2020 as well. Investors are keeping an eye on their fallback scenarios when they buy hotels, and the price per square meter must therefore match the location.

This is why it is only hotels in Copenhagen that can be sold at relatively low yields. The declining yield for office properties in 2019 will also impact the yield demand for hotel properties, and it is not unrealistic that we will register transactions involving yields below 4%.

Figure 36: Hotel - Occupancy rate - Copenhagen City 2016-2019 100%

80%

60%

2019M11

2019M08

2019M05

2019M02

2018M10

2018M07

2018M04

2018M01

2017M10

2017M07

2017M04

2017M01

2016M10

2016M07

2016M04

2016M01

40% 2016M01 2016M02 2016M03 2016M04 2016M05 2016M06 2016M07 2016M08 2016M09 2016M10 2016M11 2016M12 2017M01 2017M02 2017M03 2017M04 2017M05 2017M06 2017M07 2017M08 2017M09 2017M10 2017M11 2017M12 2018M01 2018M02 2018M03 2018M04 2018M05 2018M06 2018M07 2018M08 2018M09 2018M10 2018M11 2018M12 2019M01 2019M02 2019M03 2019M04 2019M05 2019M06 2019M07 2019M08 2019M09 2019M10 2019M11

Source: Statistics Denmark

Tendency

Occupied rooms

Figure 37: Tourism & hotel rooms - Copenhagen 2008-2024 250 By 2024, it seems that the number of hotel rooms and hotel booking will reach the same levels of 2008. It therefore seems that we are not to expect an oversupply of hotel rooms in the long term.

150

100

50 2008

2009

2010

2011

2012

Source: C&W | RED & Statistics Denmark

2013

2014

2015

2016

Tourism

2017

2018

2019

2020

2021

2022

2023

2024

Hotel rooms

91

HOTEL

2008 = INDEX 100

200

HOTEL - TRANSAKTIONER OG PIPELINE HOTEL - TRANSACTIONS AND PIPELINE

In 2015, RED acted as advisor on the sale of the former conservatory at Niels Brocks Gade 1 to the Swedish real estate company Balder.

Balder has since developed the property into a five-star luxury hotel and RED is acting as ongoing advisor for the client.

Hotel - Top 5 transactions 2019 Asset name

Area

Date

Size sq m

Price DKK

Investor

Vendor

1

Admiral Hotel

Copenhagen K

November

17,893

1,400,000,000

Midstar

Private investor

2

Crown Plaza Copenhagen

Copenhagen S

September

30,000

550,000,000

NIAM

Solstra

3

Beach Hotel Marienlyst

Helsingør

August

17,348

520,000,000

Midstar

Artha Kapitalforvaltning

4

Scandic Portfolio

Across Nation

June

12,957

200,000,000

Private investor

Private investor

5

LundtoftegĂĽrdsvej 12

Kongens Lyngby

December

5,460

187,500,000

PFA Ejendomme

Benjamin Capital

92 // RED - Danish Investment Atlas 2020

Hotel - New developments in Copenhagen 2020-2024 No. of rooms

Year

CABINN Copenhagen II

610

2020

Comfort Copenhagen Airport Hotel

605

2020

Hilton Copenhagen City (Strandgade 7)

400

2020

Nordic Choice Hotels - Tietgensgade 37

390

2020

Wakeup Borgergade (Expansion)

270

2020

Cityhub Copenhagen

215

2020

Zleep Hotel Copenhagen area

211

2020

Bryggen Guldsmeden

210

2020

A&O Hostels. Sydhavnen

200

2020

Zoku Lofts, Ørestad Nord

160

2020

Go Gotel Lergravscej

140

2020

Ascot Apartments (Convertion to hotel)

120

2020

Zleep Hotel Lyngby

120

2020

100

2020

Scandic Nørreport Total in 2020

3,751

Scandic Spectrum Copenhagen - Kalvebod Brygge

632

2021

Comwell - Nordhavn

484

2021

Teglholmen (Rooms & apartments)

407

2021

Hotel Følager, gl. Køgelandevej

369

2021

Scandic Copenhagen Airport

357

2021

5-øren Guldsmeden Hotel

270

2021

25hours hotel Rundetårn

243

2021

Stay Seaport II

120

2021

Total in 2021

2,882

Ørestad Syd Hotel

450

2022

Ibis Styles - Ørestad

186

2022

Total in 2022

636

Radisson Blu Scandinavia (Expansion - apartments)

434

2023

Hotel på Holmen

300

2023

Joyn, Engholmene (Apartment Hotel)

248

2023

Locke - Postbyen (Apartment Hotel)

236

2023/2024

Total in 2023

1,218

Papirøen - Christianshavn

128

Total in 2024

128

In Total

2024

8,615

93

HOTEL

Hotel and adress

In 2017, RED acted as advisor on the letting of Spectrum to Scandic hotels on behalf of the owner, HM2, and RED is acting as ongoing advisor for the client.

HOTEL

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