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MARKET REPORT ISSUE III 2017

Cushman & Wakefield | RED facilitated the sale of EY’s headquarter on Osvald Helmuths Vej 4 to the Danish Building and Property Agency for DKK 1.085 M.


EXECUTIVE SUMMARY

A CONTINUOUS HIGH ACTIVITY IN ALL SEGMENTS

INVESTMENT MARKET

We continue to experience high investment activity across all segments and we still expect the transaction volume to reach another post-crisis high this year. Investments in residential properties are still a major driver for the activity, but we have also seen noticeably higher activity within the industrial segment.

Nordic corporation leaders are focused on strategies to attract and retain talented employees, and at the same time, they must continually find ways to reduce occupancy costs. The overriding challenge is to balance these goals, which are often in opposition to one another and put to test when acquiring office space.

OFFICE

Investments in properties on the high street market in Copenhagen continue to boost the overall retail volume. The high street market is particularly attractive to foreign investors, and in the article in this report, we will explain some of the most important factors encouraging foreign investors to enter the Copenhagen high street market. We expect the optimism on the high street market to continue as the Danish economy continues to progress, demographic conditions are favorable coupled with Copenhagen retail shopping streets being the most attractive within the Nordics.

Lastly, we strongly recommend to visit our website and try our dynamic analysis tool, where we continuously update the data to reflect the latest development.

ISSUE III 2017 2 / 31

2016 Q2

2017 Q2

CHANGE

4.15% 738 € 7.70%

4.00% 885 € 6.80%

-15 bp +147 € -90 bp

2016 Q2

2017 Q2

CHANGE

Prime yield (Copenhagen High Streets) 3.50% 3.00% -50 bp Secondary yield (Copenhagen Side Streets) 4.75% 4.00% -75 bp Investment volume in million 202 € 94 € -108 € INDUSTRIAL 2016 Q2 2017 Q2 CHANGE Prime yield (Copenhagen Area) Prime yield (Triangle Area) Investment volume in million

7.00% 7.25% 161 €

6.25% 6.50% 885 €

-75 bp -75 bp +724 €

TRANSACTION VOLUME (BN DKK)

Q3 2016 - Q2 2017 - DKK 74.7 BN ~ EUR 10.0 BN 25.8

18.5

5.5 Land

6.3 Hotel

7.8

Retail

Industrial

Nicholas Thurø Managing Partner Cushman & Wakefield | RED

Office

8.6 Residential

In this issue we have a new Occupier section in which the focus is on a new survey in the Nordics conducted by Cushman & Wakefield. The survey finds that

Enjoy the report!

Prime yield (Copenhagen City) Investment volume in million Vacancy (Copenhagen City) RETAIL

2.2 Other


CONTENT ISSUE III FOCUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 MACROECONOMICS

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

INVESTMENT MARKET OFFICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 RESIDENTIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 RETAIL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 INDUSTRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 OCCUPIER MARKET OFFICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 RETAIL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 RETAIL - FOOTFALL ANALYSIS

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

APPENDIX - DANISH TRANSLATION DANSK VERSION AF FOKUS ARTIKEL

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

ISSUE III 2017 3 / 31


EUROMONEY 2017 - WINNER OF 4 AWARDS

2017 2016

ISSUE III 2017 4 / 31


ISSUE III FOCUS

ISSUE III 2017 5 / 31


DANSK VERSION PÅ SIDE 30

ISSUE III FOCUS HIGH STREET CONTINUES TO BE AN ATTRACTIVE MARKET The attention often falls on Copenhagen, when foreign investors with a high street focus look for new investment opportunities in Europe. Despite the fact that we increasingly observe that investors look outside Copenhagen for investments opportunities in the retail segment, the high street market in Copenhagen continues to be the retail investment market driver. There are three particularly attractive factors that results in foreign investors dominating the high street market in Copenhagen, and it seems as if the trend is not just a temporary hype.

THE OPTIMISM CONTINUES ON THE HIGH STREET MARKET Over the past few years, the high street transactions in Copenhagen have accounted for between 35% and 56% of the retail volume in Denmark. Year to date retail volume in 2017, high street transactions in Copenhagen constitute 56%. Thus, the high street segment in Copenhagen still occupies a large part. We expect the optimism to continue on the high street market. According to Claus Bælum, Partner and Head of Capital Markets in RED, one reason is the positive Danish macroeconomic conditions: “The strong Danish economy combined with an increasing consumer confidence and a continued wish to settle in the city, plays an important role in the propensity to invest in the high street segment in Copenhagen. The high streets are not getting larger, however, the catchment area is”. The increased interest in retail properties in the two primary shopping streets in Copenhagen, Strøget and Købmagergade, is seen especially among foreign investors. But what factors drive foreign investors to enter the Copenhagen high street market? We will take a closer look at this in this article.

ISSUE III 2017 6 / 31

FOCUS

TRANSACTION VOLUME 2012-2017 - HIGH STREET TRANSACTIONS SHARE OF RETAIL 9 BN DKK

8.6 BN DKK

7.9 BN DKK

7.7 BN DKK 42%

35%

56% 58%

3.9 BN DKK 2.5 BN DKK

58%

64%

42%

56%

65%

44%

44%

36%

2012

2013

2014

HIGH STREET TRANSACTIONS

2015

2016

2017 YTD

REMAINING RETAIL TRANSACTIONS

THE DRIVERS

1. FAVORABLE LOAN CONDITIONS

In the past five years alone, high street properties worth more than DKK 19.7 bn have been sold and 68% were acquired by foreign investors. Now, we also observe that foreign to foreign transactions are increasing significantly i.e. transactions where the buyer as well as the seller are foreign. Year to date high street volume in 2017, foreign to foreign transactions accounted for 85%. By comparison, we observed no foreign to foreign transactions in neither 2012 nor 2013, while in 2014-2016, 48% of the high street volume consisted of foreign to foreign transactions. In our opinion there are three particular factors that make foreign investors dominate the high street market in Copenhagen:

Not surprisingly, one of the main reasons is the access to inexpensive financing, which has followed in the wake of the interest rate development. The Danish mortgage system offers the lowest lending costs in Europe for the first 60% of the purchase price, and the foreign investors are usually property funds with a desire to leverage their investments.

2. STILL HIGHER YIELDS ON HIGH STREET PROPERTIES IN COPENHAGEN COMPARED TO OTHER EUROPEAN CITIES Another important factor is that the yield on high street properties in Copenhagen is still higher compared to other European

HIGH STREET TRANSACTION VOLUME - DANISH INVESTORS VS. FOREIGN INVESTORS 4.5 BN DKK 3.6 BN DKK

5.0 BN DKK 4%

DANISH FOREIGN

36%

2.8 BN DKK 62%

1.6 BN DKK

96%

2012

MACROECONOMICS

2.2 BN DKK

64%

44% 56%

39%

61%

38%

2013

2014

INVESTMENT MARKET

2015

OCCUPIER MARKET

2016

100%

2017 YTD

APPENDIX


cities. Data from Cushman & Wakefield shows that the yield of high street properties in Copenhagen currently is 50 basis points higher than in cities such as Paris and London. This combined with the Danish mortgage system results in a substantially higher return on invested capital. Previously, as the graph below also shows, there was a major difference in the yield for prime high street in Copenhagen compared to Paris and London. However, in recent years, this gap has become smaller as high street properties in Copenhagen are considered very safe assets, due to low re-letting risks and a very liquid and transparent transaction market. Moreover, it seems as several foreign investors regard Copenhagen as a metropolis with a growing international significance, which also explains why the gap between the yield for prime high street in Copenhagen compared to Paris and London has become smaller. “With a growing population, growing catchment area and a very attractive city centre, which is becoming more and more popular amongst tourists, customers and shops, Copenhagen has a very strong investment profile in the eyes of Hines”, says Peter Epping, Managing

PRIME NIY - HIGH STREET 6.00%

5.00%

4.00%

3.00%

HIGH STREET TRANSACTION VOLUME - INVESTORS INVESTMENT PROFILE 5.0 BN DKK

3.6 BN DKK

2012

2013

2014

COPENHAGEN

FOCUS

2015 PARIS

2016

2017 LONDON

MACROECONOMICS

OPPORTUNISTIC 64%

65%

1.6 BN DKK 38% 56% 6% 2012

2.8 BN DKK 2.2 BN DKK

60%

61% 64%

14%

36%

22%

18%

2013

2014

Director and Fund Manager at the global property fund, Hines.

3. VALUE CREATION Several international investors also observe attractive opportunities for value creation in the high street market, which is why the Copenhagen high street market is permeated by several professional international investors with both high street property development skills and experience from other major cities. For example, in 2014 the international investment company Avignon Capital, acquired Købmagergade 26, which at that time could be considered an opportunistic investment. Avignon Capital invested in a new large ground floor, which was completed in 2016, and let out to the international clothing brand Superdry. This has increased the value of the property due to the significant rental uplift.

HIGH STREET EVOLUTION: FROM OPPORTUNISTIC & VALUE-ADD TO CORE

0.00%

VALUE ADD

22%

2.00%

1.00%

CORE

4.5 BN DKK

In recent years, core investments have represented a fairly large proportion of the total investment volume in the high street

INVESTMENT MARKET

29% 11%

2015

2016

27% 9% 2017 YTD

segment. The graph above shows the development in high street transactions, divided into risk classes. This is a natural consequence as foreign value-add and opportunistic funds are selling their properties, after finalizing the value-add development, on to other funds focusing more on a core profile. Avignon Capital’s sale of Købmagergade 26 in the beginning of the year to Hines is an example of this.

OUTLOOK At RED we are still convinced that there is good reason to be optimistic in relation to the high street market. The Danish economy continues to progress, demographic conditions are favorable coupled with Copenhagen retail shopping streets being the most attractive within the Nordics. For investors with a Nordic high street strategy, Copenhagen is the most liquid market and also the market with the greatest concentration of international tenants. In addition to this, the Danish mortgage system still offers the opportunity to gain an attractive yield – even after several years with declining yields. The interest rate sensitivity is still present, however, investors can solve this by choosing to finance based on a long term interest rate.

OCCUPIER MARKET

APPENDIX

ISSUE III 2017 7 / 31


MACROECONOMICS

ISSUE III 2017 8 / 31


MACROECONOMIC OVERVIEW DENMARK CONTINUES TO DISPLAY A COMPETITIVE ECONOMIC FOUNDATION The Danish economy is continuously strengthening its position. Purchasing power is rising amongst the Danes, as employment is improving along with higher wages. This improvement, coupled with low inflation rates, results in greater spending power for consumers. With interest rates at an all-time low, Denmark has seen a rise in commercial and private real estate prices.

MACROECONOMIC VARIABLES KEY VARIABLE

A YEAR AGO

MOST RECENT

GDP Growth Rate y/y

0.60%

2.50%

Inflation Rate y/y

0.10%

1.50%

Unemployment Rate - Denmark

6.28%

5.90%

Unemployment Rate - Copenhagen Region

6.10%

5.50%

10 year Government Bond

0.08%

0.35%

-0.52%

-0.63%

2.56%

2.47%

Short Term Mortgage Rate - 1 and 2 year bonds Long Term Mortgage Rate - 30 year bonds

TREND

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

In general, economists are confident, that the economic drivers in Denmark are strong enough to handle future uncertainties in the economy. The Danish economy continues its modest, but steady strengthening. The Danish National Bank has characterized the ongoing upturn as balanced and broadly based. The growth in GDP has been steady and less volatile since 2013, with a significant upturn in Q1 and Q2 2017.

INFLATION GROWTH 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00%

In the first six months of 2017, Denmark’s GDP grew 2.6% compared to the same period last year. Compared to the rest of EU and the US, the Danish economy outperformed both economies during the first six months of 2017, as the EU posted a growth of 2.1%, while the US economy grew by 2.0%. Inflation rates in Denmark reached 1.5% in Q2 trailing twelve months. This is the same level as the inflation in the EU, and the first time since February 2016, that Denmark didn’t have a lower inflation rate than the EU. In the 12 months from Q3 2015 until Q2 2016, inflation rates in Denmark only rose by 0.1%. Interest rates in Denmark have continued to reach all-time lows since Q2

FOCUS

MACROECONOMICS

-0.50% -1.00%

2010

2011

2012

2013

DENMARK

2014

2015

2016

2017

EUROPE (28 COUNTRIES)

Source: Eurostat

2012. Economists frequently discuss the development of interest rates in Denmark, and expectations from the Danish National Bank is that we might see rising interest rates in the near future. Due to the stability of the economic drivers, the increase is expected to happen in a controlled manner though. The domestic demand continues to develop positively, mainly driven by low interest rates, higher dis-

INVESTMENT MARKET

posable income, as well as higher private savings and wealth deposits. Employment went up with 11,000 people from Q1 2017 to Q2 2017, reducing the unemployment to 170,000 people, which equals 5.9% of the workforce. The rise in employment has been steady since late 2012, where unemployment reached 230,000 people. The decline in unemployment is solely driven by the private sector, and primarily within the areas of construction and commerce.

OCCUPIER MARKET

APPENDIX

ISSUE III 2017 9 / 31


THE LETTING OF BANK In continuation of the development of POSTGAARDEN, Cushman & Wakefield | RED prepares the second half of the block, BANK, for retail and food & beverage. A local bank’s former hall is being redeveloped to house large restaurants and will also be divided into several leases for the purpose of retail. The municipality is prepared to redo the surrounding streets, which is expected to make BANK a new shopping attraction in the secondary area.

ISSUE III 2017 10 / 31

FOCUS

MACROECONOMICS

INVESTMENT MARKET

OCCUPIER MARKET

APPENDIX


INVESTMENT MARKET

ISSUE III 2017 11 / 31


INVESTMENT MARKET - OFFICE A CONTINUOUS HIGH LEVEL OF INVESTMENT ACTIVITY FROM DANISH INVESTORS Following a transaction volume of DKK 2.4 bn Q1, the investment activity in Q2 almost tripled and reached approx. DKK 6.6 bn. Danish investors have continued their previous trajectory and are once again the most active investors accounting for 71% of the transaction volume in Q2. Especially property funds had a busy quarter as they accounted for 30% of the transaction volume and were the most active investor segment. However, looking over the trailing twelve months, real estate companies accounted for 30%, while property funds came second with 25%. The Danish building and property agency contributed to the total transaction volume by acquiring EY’s 55,000 sqm office building in Frederiksberg, Flintholm at DKK 1.1 bn. EY, AIG and Eniro will continue as tenants for the time being, but it will eventually become available to The Danish building and property agency. Novo A/S acquired a approx. 9,000 sqm office property in Hellerup for DKK 420 M from the institutional investor, PKA. Novo A/S has been one of the tenants since 2010, but because of the risk of future space shortage, the company decided to buy the property. We have experienced prime yield compression in the last couple of years and now the prime office yields in CBD have fallen 25 basis points to 3.75 % this quarter.

ISSUE III 2017 12 / 31

FOCUS

INVESTOR BREAKDOWN – Q3 2016 - Q2 2017 Private Investors 5% Real Estate Companies 30% Others 20%

18.5 BN DKK

Institutional Investors 20%

Property Funds 25%

DANISH INVESTORS - 77 %

0%

20%

FOREIGN INVESTORS - 23 %

40%

60%

80%

100%

Source: Cushman & Wakefield | RED

PRIME YIELDS SUBAREA

Q3 2015

Q3 2016

Q3 2017

Copenhagen City (CBD)

4.75%

4.15%

3.75%

Copenhagen E & W

5.75%

5.50%

4.75%

Frederiksberg

5.75%

5.50%

4.75%

Harbour areas

4.75%

4.15%

3.75%

South Harbour

6.00%

5.75%

5.50%

Ørestad

5.75%

5.50%

5.50%

Copenhagen N & NW

6.50%

6.50%

6.00%

South and West of Copenhagen

7.25%

7.25%

7.00%

North of Copenhagen

5.25%

5.00%

5.00%

MACROECONOMICS

INVESTMENT MARKET

OCCUPIER MARKET

APPENDIX


INVESTMENT MARKET - RESIDENTIAL RESIDENTIAL INVESTORS SEEKING NEW OPPORTUNITIES OUTSIDE COPENHAGEN The residential market continues to be the largest investment segment measured by transaction volume. Altogether, the residential transaction volume reached a total of DKK 25.8 bn in the past 12 months (Q3 2016 – Q2 2017), in which the first half of 2017 accounted for approx. 11.9 bn. This might indicate that the segment is reaching a natural limit, after many years with huge growth in total transaction volume. In 2016, we saw a total of 25.4 bn of residential transactions, where 31.1% of those transactions involved properties outside of Copenhagen. In 2017, that number had increased to 44.5%. Currently, there is a limit for new residential construction in Copenhagen, with most of Nordhavn, Carlsberg Byen, Ørestad, being bought and build. Lower supply combined with high investment activity has forced investors to look outside of Copenhagen, such as Aarhus, Aalborg and smaller cities in Denmark. The investment volume in Q2 2017 was propped by two transactions. Ø-Huset, a new residential project in Ørestaden bought by Heimstaden for DKK 0.9 bn, with the permission to build 300 apartments and limited retail on 27,300 sqm and SEB also sold a portfolio of residential properties located north of Copenhagen, to Core Property Management. The properties accumulate to 30,876 sqm, with a price estimated at DKK 0.5-1.0 bn.

FOCUS

MACROECONOMICS

INVESTOR BREAKDOWN – Q3 2016 - Q2 2017 Others 5% Institutional Investors 9% Real Estate Companies 39% Private Investors

25.8

15%

BN DKK

Property Funds 32% DANISH INVESTORS - 42 %

0%

20%

FOREIGN INVESTORS - 58 %

40%

60%

80%

100%

Source: Cushman & Wakefield | RED

PRIME YIELDS

PRIME MARKET RENT DKK/SQM SUBAREA

Q3 2017

SUBAREA

Q3 2017

Copenhagen City

2,000 - 2,200

Copenhagen Area - rent control

1.50 - 3.00%

Copenhagen E, W & N

1,700 - 1,900

Copenhagen Suburb - rent control

3.00 - 4.00%

Frederiksberg

2,000 - 2,200

Copenhagen Area - market rent

3.60%

North Harbour

2,000 - 2,200

Copenhagen Suburb - market rent

4.50%

South Harbour

1,600 - 1,800

Copenhagen S

1,500 - 1,700

North of Copenhagen

1,700 - 1,900

INVESTMENT MARKET

OCCUPIER MARKET

APPENDIX

ISSUE III 2017 13 / 31


INVESTMENT MARKET - RETAIL LOW ACTIVITY ON COPENHAGEN HIGH STREETS RESULTED IN QUIET Q2 The investment activity in the retail segment was low in Q2 2017, as we only registered transactions with a combined volume of DKK 0.7 bn, which is the lowest since Q3 2016. The volatility in each quarter is mostly due to a few large investments affecting the total transaction volume. The non-existing activity on the high street is one of the reasons for the low transaction volume in Q2 2017. In Q1 2017, the global property fund Hines acquired five prime high street assets in Copenhagen at a price of approx. DKK 0.9 bn. Hines’ acquisition of high street assets shows how a single transaction can effect the total transaction volume. This quarter we have not observed any pri-me high-street assets sold or bought. However, BRFKredit has sold its distressed 20,000 sqm shopping center, Gallerierne in Hillerød north of Copenhagen, to a group of private investors for approx. DKK 110 M. The retail segment has historically been dominated by foreign investors, however, this quarter it has been more evenly divided. Property funds are still the most active investors in this segment with a 64% share of the transaction volume the last 12 months. In recent years, prime yields have been downward sloped. However, this quarter prime yields have been stable compared to the previous quarter. As seen below, the prime yields on Strøget and Strøget area are still at 3.00% and 4.00% respectively.

INVESTOR BREAKDOWN – Q3 2016 - Q2 2017 Others Institutional Investors

4%

7% Real Estate Companies 8% Property Funds 64%

7.8 BN DKK

Private Investors 17%

DANISH INVESTORS - 29 %

0%

20%

FOREIGN INVESTORS - 71 %

40%

60%

80%

100%

Source: Cushman & Wakefield | RED

PRIME YIELDS STREET/SUBMARKET

Q3 2015

Q3 2016

Q3 2017

Strøget (incl. Vimmelskaftet)

3.75%

3.50%

3.00%

Strøget area

4.75%

4.50%

4.00%

Østerbrogade

5.50%

5.25%

5.25%

Nørrebrogade

6.00%

5.50%

5.50%

Købmagergade

3.75%

3.50%

3.00%

Lyngby

5.50%

5.25%

4.75%

5.00%

4.50%

4.00%

SHOPPING CENTRES Copenhagen

ISSUE III 2017 14 / 31

FOCUS

MACROECONOMICS

INVESTMENT MARKET

OCCUPIER MARKET

APPENDIX


INVESTMENT MARKET - INDUSTRIAL POST-CRISIS HIGH TRANSACTION VOLUME Q2 2017 resulted in a post-crisis high transaction volume of DKK 6.6 bn, which corresponds to 76% of the total transaction volume in the past 12 months. This is clearly a segment foreign investors find lucrative, as they account for 93% of the investment activity this quarter. Looking at the activity of the last 12 months, foreign investors accounted for 85% of the investment activity.

INVESTOR BREAKDOWN – Q3 2016 - Q2 2017 Real Estate Companies Institutional Investors 3% Others 2% 5% Private Investors 5%

86%

One of the largest deals took place, when NREP Logistics Property Fund was founded in April by NREP with numerous Danish and international institutional investors. Eight industrial properties with a total size and price of approx. 329,000 sqm and DKK 2.45 bn. were added to the fund’s portfolio in Q2 2017. Another noticable transaction took place when Lemvigh-Müller sold a 75,000 sqm industrial portfolio consisting of properties in Køge, Odense and Kolding in a sale & leaseback (S&L) transaction to the English property fund, M&G Real Estate for approx. DKK 440 M. The prime yields for logistics properties are facing a downward pressure. The Copenhagen area, the Triangle Area and the Aarhus area in Jutland, have all experienced a drop in the yield level of -25 basis points and are now at 6.00%, 6.25% and 6.50%, respectively.

Property Funds

8.6 BN DKK

DANISH INVESTORS - 15 %

0%

FOREIGN INVESTORS - 85 %

20%

40%

MACROECONOMICS

80%

100%

Source: Cushman & Wakefield | RED

PRIME YIELDS

PRIME MARKET RENT DKK/SQM SUBAREA

Q3 2017

SUBAREA

Q3 2017

Copenhagen Area

575

Copenhagen Area

6.00%

Triangle Area

475

Triangle Area

6.25%

Aarhus Area

425

Aarhus Area

6.50%

Modern logistics properties with long leases

Modern logistics properties with long leases

FOCUS

60%

INVESTMENT MARKET

OCCUPIER MARKET

APPENDIX

ISSUE III 2017 15 / 31


THE SALE OF 5 FORMER UNIVERSITY PROPERTIES IN CENTRAL COPENHAGEN Købmagergade 44-46 is one of the five properties in central Copenhagen which are offered for sale by Freja Ejendomme in cooperation with Cushman & Wakefield | RED. The five properties are located at: Bispetorvet 1-3 Købmagergade 44-46 (picture) Købmagergade 50 Sankt Peders Stræde 19 Studiestræde 34 For information about the properties: frejaejendomme.red-cushmanwakefield.dk

ISSUE III 2017 16 / 31

FOCUS

MACROECONOMICS

INVESTMENT MARKET

OCCUPIER MARKET

APPENDIX


FOCUS

MACROECONOMICS

INVESTMENT MARKET

OCCUPIER MARKET

APPENDIX

ISSUE III 2017 17 / 31


11 RESIDENTIAL PROPERTIES ON AMAGERBROGADE Akelius acquired 11 residential properties on Amagerbrogade with 128 condominiums from Capman and Keystone at a total price of DKK 370 M.

ISSUE III 2017 18 / 31

FOCUS

MACROECONOMICS

INVESTMENT MARKET

OCCUPIER MARKET

APPENDIX


TRANSACTIONS

ISSUE III 2017 19 / 31


TRANSACTIONS OFFICE STREET NAME STREET NAME

LOCATION LOCATION

DATE DATE

SIZESIZE (SQM) TYPE NAME (SQM) PRICE PRICEVENDOR VENDOR TYPE VENDOR VENDOR NAME (M DKK) (M DKK)

BUYER TYPE BUYER TYPE

BUYER NAME BUYER NAME

15 Commercial Properties CPH Area Hedeager 1-5 & Kystvejen 29 Århus Rådhuspladsen 4 CPH W Holmens Kanal 2 CPH City Linnés Allé 2 Høje-Taastrup Albanigade 30 Odense Marielundvej 46 Herlev Rytterkasernen 11 Odense Klostermarken 12 Viborg Dag Hammarskjolds Allé 28 CPH E Osvald Helmuths Vej 4 Frederiksberg Overgaden Oven Vandet 60A CPH City 11 Commercial Properties Denmark (Søkvæsthuset) Tuborg Havnevej 19 Hellerup Store Kongensgade 22 CPH City Ottiliavej 7 Valby

Q3 2016/Q2 Q3 2016/Q1 Q3 2016/Q1 Q3 2016/Q1 Q3 2015/Q4 Q2 2015/Q4 Q2

88,250 1,800 Institutional investor Danica Real estate company Wihlborgs A/S 23,600 555.0 Real Estate Company C.W. Obel Institutional Investor PensionDanmark 14,000 560 Institutional investor Alm. Brand Ejendomsinvest A/S Property fund Standard Life Aberdeen 49,065 1,400.0 User Danske Bank Property Fund Standard Life Investments 8,184 180 User Det Danske Hedenselskab Institutional investor PensionDanmark 4,300 52.3 Institutional Investor Danica Pension Private Investor Karsten Bill Rasmussen 23,478 Est. 155 Property fund Cromwell Private investor Rent Estate 8,385 61.0 Institutional Investor Danica Pension Private Investor Karsten Bill Rasmussen 10,939 139 User Det Danske Hedenselskab Institutional investor PensionDanmark 1,596 63.0 Private Investor Fritz Henrik Schur Public Institution The Turkish Embassy 37,000 1,085 User EY Public institution Bygningsstyrelsen 8,826 161.0 Public Institution The Danish Armed Forces Private Investor Lajboschitz N/A 1,600 Institutional investor Danica Unknown investor Lennart Unknown investor

Q2 2015/Q4 Q2

8,912 1,244 33,000

Store Kongensgade Pakhusene Århus 62 Ø

CPH City Aarhus

2015/Q4 Q2

1,772 Est. 30052.2Developer Private Investor Domis Private Investor 10,621

Real Estate Company Institutional investor Jeudan PFA Pension

Stormgade 10 9B Vesterbrogade

CPH CPHCity W

2015/Q4 Q2

2,374 10,103

25872.0UserPublic Institution JyskeFreja BankEjendomme

Property Fund company Artha Kapitalforvaltning Real estate Jeudan

Strømmen Holmboes6 Allé 2

Nørresundby Horsens

2015/Q4 Q2

11,404 12,034

A/S A/S 16873.5RealUser estate company Kirk RTX og Thorsen

Private Investor Property fund

Kolding Åpark 8

Kolding

Q2

6,250

143 Private investor

KPC

Institutional investor

PensionDanmark

Rigensgade 11

CPH City

Q2

2,530

101 User

Awapatent

Real estate company

Jeudan

Albani Torv 2

Odense

Q2

5,617

KPC

Institutional investor

PensionDanmark

420 Institutional investor PKA 48.5 Real Estate Company JL Ejendom 378 User H. LUNDBECK A/S

89 Private investor

User Novo A/S Other Fund Erik & Susanna Olesens AlmenInstitutional investor velgørende JØP & DIPFond

K/SNIAM Strømmen

RETAIL STREET NAME

LOCATION

DATE

SIZE (SQM) PRICE (M VENDOR TYPE DKK)

4 Properties on Købmagergade

CPH City

Q3

Amagertorv 19

CPH City

Q3

2,368

Gallerierne Shoppingcentre

Hillerød

Q2

20,064

3,145

VENDOR NAME

BUYER TYPE

BUYER NAME

460 Property fund

Meyer Bergman

Property fund

Hines

222 User

Lilly Brudekjoler

User

Richemont Group

BRFkredit

Private investor

Private investor

Est. 110 Other

HOTEL HOTEL NAME

LOCATION

Strand- & Badehotel Marienlyst (49.9%)

Helsingør

Grand Hotel

CPH W

DATE

PRICE PER ROOM (DKK)

PRICE (M DKK)

VENDOR NAME

BUYER NAME

Q3

1,250,000

Est. 100

Private investor

Artha Kapitalforvaltning

Q2

1,550,000

Est. 250

Arp-Hansen Hotel Group A/S Midstar

INDUSTRIAL STREET NAME

DATE

SIZE (SQM)

Ejby Industrivej 4 & Fabriksparken 11-15 Glostrup

Q3

20,000

NREP Logistic Property Fund

Denmark

Q2

Est. 329,000

Værftsvej 10

Køge

Q2

36,776

Est. 230 User

Nordager 1

Kolding

Q2

34,361

Blangstedgårdsvej 23

Odense

Q2

22,488

Ground Handling Property - CPH Airport

Kastrup

Q2

4,750

Ullsvej 5

Køge

Q2

14,716

Amerikavej 7

Fredericia

Q2

21,000

ISSUE III 2017 20 / 31

LOCATION

FOCUS

MACROECONOMICS

PRICE VENDOR TYPE (M DKK)

VENDOR NAME

BUYER TYPE

Kaupthing Bank

Institutional investor Nordea

NREP

Property fund

NREP

Dki Logistics

Property fund

NREP

213 User

Lemvigh-Müller

Property fund

M&G Real Estate

132 User

Lemvigh-Müller

Property fund

M&G Real Estate

100 Property fund

MG Real Estate

Property fund

Pareto Securities

93 User

Lemvigh-Müller

Property fund

M&G Real Estate

91 User

DSV

Property fund

Pareto Securities

OCCUPIER MARKET

APPENDIX

96 Other Est. 2,450 Property fund

INVESTMENT MARKET

BUYER NAME


LAND STREET NAME

PURPOSE

LOCATION

DATE

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

PRICE VENDOR NAME (M DKK)

BUYER NAME

Rødovre Port

Residential

Rødovre

Q3

37,500

Est. 5,300

Engvej 167

Residential

CPH S

Q3

12,000

Est. 5,404

Est. 200 Bricks Est. 65 PFA Pension

Gefion Group Gefion Group

Engvej 167

Hotel

CPH S

Q3

11,500

Est. 5,404

Est. 62 PFA Pension

Gefion Group

Hørspinderigrund

Residential

Kolding

Q2

20,400

Est. 4,850

Est. 99 Fischer Ejendomme

Ares Management

Trekroner Syd

Big box

Roskilde

Q2

20,000

Est. 4,500

Est. 90 Roskilde Municipality

Buffin Real Estate

RESIDENTIAL STREET STREET NAME NAME

LOCATION DATE DATE LOCATION

Residential Portfolio Hedeager 1-5 & Kystvejen 29 Teglholmen Holmens Kanal 2

Denmark Århus CPH SW CPH City

Q3 2016/Q2 Q3 2016/Q1

AC Meyers Vænge Albanigade 30

CPH SW Odense

Q3 2016/Q1

18,660 4,300

Residential Portfolio Rytterkasernen 11

OdenseCPH

Q3 2016/Q1

Est. 19,000 8,385

Lokesvej 7-9 Dag Hammarskjolds Allé 28

Aarhus Q3 CPH E Area 2015/Q4

13,000 1,596

Residential Overgaden Portfolio Oven Vandet 60A (Søkvæsthuset) Amager Boulevard 115

CPH S CPH City

Q3 2015/Q4

14,858 8,826

CPH S Store Kongensgade 22Bundgaards CPH City Axel Strøbyes Vej, Poul Valby Vej og Valby Maskinparksvej Store Kongensgade 62 CPH City Cortex Park Odense

Q3 2015/Q4 Q3

8,776 1,244 Est. 10,000

2015/Q4 Q3 CPH City Aarhus Area 2015/Q4 Q3 Nørresundby 2015/Q4 Aarhus Q3

1,772 13,500 2,374 7,200

Stormgade Søren Frichs 10 Vej 53 Strømmen 6Portfolio Residential Masnedøgade 28

SIZE SIZE(SQM) (SQM) 151,000 23,600 21,500 49,065

11,404 Est. 5,345

PRICE VENDOR VENDOR TYPE TYPE PRICE (M DKK) DKK) (M 2,925 555.0 790 1,400.0

VENDOR NAME NAME VENDOR

BUYERTYPE TYPE BUYER

BUYERNAME NAME BUYER

Property fund Ares Management Real estate company Real Estate Company C.W. Obel Institutional Investor Teglbroen P/S (PenSam, KPC Developer Real estate company og SjælsøBank Management) Property Fund User Danske

Heimstaden PensionDanmark Heimstaden Standard Life Investments

Est.52.3 670 Developer Højgaard A/S Institutional Investor MT Danica Pension

Property fund Private Investor

Est.61.0 600 Private investor Group Institutional Investor Qapartments Danica Pension

Real estate company Karsten Kjøbenhavns Boligejendomsselskab Private Investor Bill Rasmussen

Est.63.0 377 Developer Private Investor

Property fund Public Institution

370 Property fund 161.0 Public Institution

Innovater Fritz Henrik Schur

PatriziaBill Rasmussen Karsten Catella The Turkish Embassy

CapMan Real estate company Lennart Akelius Lajboschitz Residential Property AB The Danish Armed Forces Private Investor

336 Real estate company Jeudan 48.5 Real Estate Company JL Ejendom Est. 300 Property fund Europa Capital

User Other Fund Property fund

Est.52.2 243 Est.72.0 210

Real Estate Company Jeudan Private investor Niels Thorborg Property Fund Artha Kapitalforvaltning Property fund Core Bolig Private Investor Strømmen Real estate company K/S Tækker Group

Private Investor Real estate company Public Institution Developer

Private Investor Humlebo Gruppen Freja Ejendomme Innovater

User investor Est.73.5 187 Private

RTX A/Sinvestor Private

DIS Erik & Susanna Olesens AlmenCapman Fond velgørende

CPH E

Q3

3,670

Est. 145 Developer

Vision Properties

Property fund

Thylander

CPH City

Q3

2,626

Est. 123 Developer

Ejendomsvisioner

Private investor

Bo Ladegaard Bendtsen

Tavervej 40-78 & 65-139

Klarup

Q3

6,786

Est. 105 Property fund

SF Management

Private investor

Erik Sørensen

Marchalls Allé

Aalborg

Q3

5,520

Private investor

Private investor

Magnus Kjøller

Wagnersvej 18, Offenbachsvej 2-20 og Mozartsvej 17

CPH SW

Q3

5,535

Other

Private investor

Private investor

Stadionvej 15-37

Glostrup

Q3

7,161

CPH

Q3

2,885

Est. 84 Developer

Linde Alle 18

Ballerup

Q3

2,873

Est. 78 Real estate company Friheden Gruppen A/S

Fiolgade 13

Helsingør

Q3

2,700

70 Developer

CPH S

Q2

27,400

880 Developer

CPH Area

Q2

30,876 Est. 500-1,000 Institutional investor SEB

Property fund

Core Bolig

Køge

Q2

14,782

135 Private investor

Private investor

Private investor

Houmannsgade 43-45 & Allegade 1-5

Horsens

Q2

11,893

133 Institutional investor Pensam

Private investor

Private investor

Borchsgade 6A

Roskilde

Q2

2,554

93 Private investor

Private investor

Private investor

Åbrinken

Odense

Q2

4,840

88 Real estate company Humlebo Gruppen

Private investor

Niels Thorborg

Frederiks Allé 75A-C

Aarhus

Q2

2,860

82 Private investor

Private investor

Property fund

Capman

Stadionvej 15-37

Glostrup

Q2

7,161

81 Private investor

Private investor

Real estate company Elverhøj Investment Group

Store Regnegade 24 & 26

Student Housing Portfolio

Ø-Huset Residential Portfolio Torvebyen 6

FOCUS

MACROECONOMICS

Est. 99 Private investor 95 Other

93 Real estate company Elverhøj Investment Group Property fund

INVESTMENT MARKET

TK Development

Core bolig

Private investor

Koncenton

Property fund

Ares Management

Seguro Management

Property fund

Core bolig

Skanska AB

Real estate company Heimstaden

Private investor

Private investor

OCCUPIER MARKET

APPENDIX

ISSUE III 2017 21 / 31


OCCUPIER MARKET

ISSUE III 2017 22 / 31


OCCUPIER MARKET - OFFICE OCCUPIER STRATEGY DRIVERS - NORDIC SURVEY Nordic corporation leaders are focused on strategies to attract and retain talented employees and on enhancing their productivity through innovation and operational excellence. At the same time, they must continuously find ways to reduce occupancy costs. The overriding challenge is to balance these goals, which are often in opposition to one another and put to test when acquiring office space. This is the main picture that emerged from a new survey conducted by Cushman & Wakefield Research and Insight in the Nordics. The survey examined not only location and workplace strategy as corporate value drivers, but also office rental decision’s alignment with the wider business strategy. The results suggest these are only partly aligned due to the view that real estate is only to some degree a strategic tool and therefore sometimes allowing pressure on cost to take priority over other strategic challenges. These findings are echoed in a wider global study, also carried out by Cushman & Wakefield. The global survey, dominated by large multi-national corporations, show an on-going tension, and misalignment, between the aspirations of corporate real estate managers and their practical decision-making. The misalignment is due to that too often, attempts to advance corporate strategic goals must take a back seat to cost savings targets. However, without over-interpreting the results it suggests better alignment between real estate and wider business strategies in the Nordics compared to what is demonstrated globally. This, if that is the case, implies strength in ability to implement corporate strategies, also in occupancy decisions, yet still with room for improvement to be made.

FOCUS

MACROECONOMICS

KEY STRATEGIC CHALLENGES OF YOUR COMPANY (SELECT TOP 3)? 53% - Pressure on cost 50% - Talent sourcing and retention 44% - Operational excellence

“53% SEE PRESSURE ON COST AS

35% - Regulatory environment

A KEY CHALLENGE”

35% - Innovation 29% - Customer relations 18% - Corporate brand/Identity

“50% SEE TALENT SOURCING AND

15% - Sustainability

RETENTION AS KEY STRATEGIC”

15% - Global expansion 6% - Economic/policial volatility

DO YOU CONSIDER YOUR REAL ESTATE AS A STRATEGIC TOOL? 60%

HAVE YOU ALREADY IMPLEMENTED AGILE WORKPLACE STRATEGIES INCLUDING DESK SHARING? 32%

32%

21% 29%

15%

11% Yes

To some degree

No

Yes, in several locations

We are

Not yet,

Not

testing

but con-

planning

one/some templating to do so location(s)

ABOUT THE SURVEY: The 37 Nordic respondents were predominantly from large firms with above 200 employers operating from more than 5 office locations across several countries. Survey responses came from leaders in several business sectors, technology/media/ telecoms and finance/insurance representing the two largest sectors. The report can be found here: cw-red.dk/occupier-strategy-drivers-nordic-2017

INVESTMENT  MARKET

OCCUPIER MARKET

APPENDIX

ISSUE III 2017 23 / 31


OCCUPIER MARKET - OFFICE LOWEST VACANCY RATE SINCE THE FINANCIAL CRISIS The positive trends in the Danish economy is continuing to influence the occupier market for offices. In Denmark the vacancy rate decreased to 7.40% in Q3 2017 - especially driven by CBD, where the vacancy rate is down 70 bp to a level of 6.10% according to Ejendomstorvet.dk. Office hotels and communities have become more popular for smaller Danish companies during the past years, due to the sharing of facilities in a multiuser property. However, the continuous growth in the Danish economy has resulted in a general increase in the workforce among these companies and they are growing out of their leases in office hotels and require their own office lease. This is one of the reasons vacancy rates are falling in all of Copenhagen. Furthermore, we have witnessed that an increasing number of international companies choose to place their offices in Copenhagen or Denmark in general.

SIGNIFICANT LEASES STREET NAME

LOCATION

DATE

SIZE (SQM) LANDLORD

TENANT

Hellerupvej 5

Hellerup

2017/Q3

Bregnerødvej 144

Birkerød

2017/Q2

2,345 Nectar Asset Management

NKT Photonics A/S

Rued Langgaards Vej 6

CPH S

2017/Q2

1,825 C.W. Obel Ejendomme

CBRE A/S

Strandvejen 70, 2. sal

CPH Area

2017/Q2

1,356 C.W. Obel Ejendomme

Weoffice ApS

Stefansgade 9, 2.

CPH N

2017/Q2

1,293 TDC A/S

Københavns Akademi

Njalsgade 21G, 8. og 9.

CPH S

2017/Q2

908 ELF Ejendomme

Deloitte

Rued Langgards Vej 6

CPH S

2017/Q2

802 C.W. Obel Ejendomme

Appstract Consulting

Finsensvej 80, 1.

Frederiksberg 2017/Q2

764 CEJ Ejendomsadministration

CCDENT Aps

Tuborg Boulevard 12

CPH Area

2017/Q2

1,100 PKA

Stena Weco

Stationsparken 37

CPH Area

2017/Q3

1,100 Fokus Asset Management

Biogen

Bygmestervej 10, 2.

CPH NV

2017/Q2

1,000 Fokus Asset Management

Designer & Friends

Bygmestervej 10, 1.

CPH NV

2017/Q2

800 Fokus Asset Management

Danske Hospitalsklovne

Rued Langgaards Vej 6

CPS S

2017/Q2

845 C.W. Obel Ejendomme

F-Secure

836 Private Investor

Tiger of Sweden

VACANCY RATES AND UNEMPLOYMENT Office vacancy rates compared to unemployment in Copenhagen 12,00% 5.00%

15

4.50% 10,00% 4.00%

10

3.50% 8,00% 3.00%

5

6,00% 2.50%

Vacancy Copenhagen Vacancy raterate Copenhagen CityCity

Vacancy Copenhagen area Vacancy raterate Copenhagen Area

Unemployment Copenhagen Area

Source: Statistics Denmark & Ejendomstorvet.dk

PRIME RENT DKK/SQM SUBAREA

Q3 2017

Copenhagen City (CBD)

1,800

Copenhagen E & W

1,300

Frederiksberg

1,350

Harbour areas

1,850

South Harbour

1,300

Ørestad

1,400

Copenhagen N & NW

1,250

South and west of Copenhagen

1,000

North of Copenhagen

1,300

*Base rents ex. service charges

ISSUE III 2017 24 / 31

FOCUS

MACROECONOMICS

INVESTMENT  MARKET

OCCUPIER MARKET

APPENDIX

Q3 2017

Q2 2017

Q1 Q32017 2016

Q3 Q12016 2016 Q4 2016

Q1 Q32016 2015 Q2 2016

Q3 2015 Q1 2015 Q4 2015

Q1 2015 Q3 2014 Q2 2015

Q3 2014 Q1 2014 Q4 2014

Q1 2014 Q32014 2013 Q2

Q3 2013 Q12013 2013 Q4

-10

Q2 Q32013 2012

0.00% 0,00%

Q4 Q12012 2012 Q1 2013

-5

Q2 Q32012 2011 Q3 2012

1.00% 2,00% 0.50%

Q4 2011 Q1 2011 Q1 2012

0

Q2 2011 Q3 2010 Q3 2011

2.00% 4,00% 1.50%

Q1 2010 Q1 2011

We expect to see the vacancy rate fall even further due to the lack of supply in CBD and will force the rent to increase.


OCCUPIER MARKET - RETAIL NO OBSERVED CHANGE IN RENT LEVELS DUE TO LOW ACTIVITY The area for retail in Copenhagen is quite small geographically. Købmagergade and Strøget, the two primary pedestrian streets that meet in the junction of the square of Amagertorv, are subject to interest from many international retailers. However, some companies might find it beneficial to be located outside the traditional high streets, the so-called secondary area, which in Copenhagen is an area typically surrounding the streets of Grønnegade, Kronprinsensgade and Pilestræde. The aforementioned streets are neither long nor wide and neither are the rest of the streets in the area. Hence, the secondary area in Copenhagen is also geographically limited just as the high streets of Copenhagen are. Even though the number of available opportunities in this area can be counted on just one hand the rent level does not seem to change significantly as a change will require an observation, which just rarely appears as the leases do not often change hands.

SIGNIFICANT LEASES STREET NAME

LOCATION

DATE

SIZE (SQM)

NEW TENANT

Ryesgade 16

Aarhus C

2017/Q3

438

Sephora

Niels Hemmingsens Gade 21

CPH City

2017/Q2

N/A

Aamanns 1921

Store Strandstræde 14

CPH City

2017/Q2

85

Le Labo

Store Strandstræde 16

CPH City

2017/Q2

66

Winterspring

Østerbrogade 79

CPH E

2017/Q2

N/A

Madklubben

PRIME RENT DKK/SQM - ZONE A SUBAREA

Q2 2017

Q3 2017

CHANGE

Strøget (incl. Vimmelskaftet)

23,500

23,500

0.00%

Strøget area - side streets

10,000

10,000

0.00%

Købmagergade

22,000

22,000

0.00%

Østerbrogade

4,000

4,000

0.00%

Gammel Kongevej

4,000

4,000

0.00%

VACANCY RATES AND CONSUMER CONFIDENCE Retail vacancy rates compared to consumer confidence in Copenhagen 5,00% 5.00%

15

4,50% 4.50% 4,00% 4.00%

10

3,50% 3.50% 3,00% 3.00%

5

2,50% 2.50%

FOCUS

MACROECONOMICS

2.00% 2,00%

0

1.50% 1,50% -5

1.00% 1,00%

Vacancy Vacancy rate rate Copenhagen Copenhagen City City

Vacancy Vacancy rate rate Copenhagen Copenhagen area area

-10

Q3 2017

0.00% 0,00%

Q4 2014 Q3 2015 2014 Q1 Q2 2015 Q3 Q1 2015 2015 Q4 2015 Q1 2016 Q3 2015 Q2 2016 Q3 2016 Q1 2016 Q4 2016 Q1 2017 Q3 2017 2016 Q2

0.50% 0,50%

Q1 Q1 2010 2010 Q2 2010 Q3 Q3 2010 2010 Q4 2010 Q1 2011 Q1 2011 Q2 2011 Q3 2011 Q3 2011 2011 Q4 Q1 2012 Q1 2012 2012 Q2 Q3 2012 Q4 Q3 2012 2012 Q1 2013 Q2 Q1 2013 2013 Q3 2013 Q4 2013 Q3 2013 Q1 2014 Q2 2014 Q1 2014 2014 Q3

At RED we continuously working with exciting retail projects and after completing the development of five new stores in Store Strandstræde, we continue the expansion of the secondary area in Copenhagen by introducing the market to a brand new opportunity: BANK, which is the development of four retail spaces and two restaurants in the buildings formerly housing a local bank situated in the rear part of Postgaarden.

Consumer confidence index

Source: Statistics Denmark & Ejendomsstorvet.dk

INVESTMENT  MARKET

OCCUPIER MARKET

APPENDIX

ISSUE III 2017 25 / 31


FOOTFALL ANALYSIS LARGE FLUCTUATIONS IN FOOTFALL COUNTS OBSERVED IN Q2 The Copenhagen high streets have fluctuated quite a lot in footfall counts in Q2 2017 compared to Q2 2016. This can be seen in the change of pedestrians on Østergade, which is expected to be even higher when the construction on Kongens Nytorv is completed and the relocation of the main stairs at the Metro, which will force the pedestrians towards Strøget.

4.

4,400 Kultorvet

ager Købm

It is interesting to observe the stable footfall count on Frederiksberggade after the opening of JD Sports. However, due to the ongoing construction and development of the City Hall Square, we might first see a positive effect when the site is completed and the new metro line is in use.

e

With the opening of the high end retailer, Hermés, on the corner of Amagertorv and Læderstræde, it will be exciting to see what effect it will have on the footfall and if it will draw more pedestrians towards Strædet.

gad

The overall decrease on Købmagergade could be caused by both the terrible summer weather and the redevelopment of Postgaarden.

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

Vimme

e

ad

Nyg

Gammeltorv 3.

5,200 e

ad

F

ISSUE III 2017 26 / 31

FOCUS

sb

rik

e red

MACROECONOMICS INVESTMENT  MARKET Rådhuspladsen

g erg

OCCUPIER MARKET

APPENDIX


FOOTFALL COUNTS IN Q2 2016 AND Q2 2017

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

5.

4,600

10.

NO.

STREET NAME

Q2 2016

Q2 2017

CHANGE

1 2

Østergade

3,157

4,204

1,046

Amagertorv/Østergade

5,780

5,157

-623

3

Frederiksberggade

5,154

5,192

39

4

Frederiksborggade/Købmagergade

5,248

4,357

-891

5

Rundetårn

5,484

4,623

-861

6

Købmagergade/Silkegade

5,199

4,347

-853

7

Vimmelskaftet/Amagertorv

6,253

6,779

526

8

Købmagergade/Valkendorfsgade

3,845

5,148

1,303

9

Købmagergade/Løvstræde

5,120

4,745

-375

10

Pilestræde/Kronprinsensgade

2,480

3,245

765

3,200

9.

4,700 8.

Kgs. Nytorv

5,100

ade

1. sterg Ø

4,200 6.

4,300 Købm ager

gade

e

gad

Øster 2.

ertorv

Amag

7.

6,800

5,200

elskaftet

AVERAGE FOOTFALL COUNT 8,000 6,000 4,000 2,000 0

Summer months

Christmas shopping 2014

FOCUS

MACROECONOMICS

INVESTMENT  MARKET

OCCUPIER MARKET

2015

Total average 2016

APPENDIX

ISSUE III 2017 27 / 31


TUBORG BOULEVARD 12 - HELLERUP In this modern and impressive office property at Tuborg Havn, Cushman & Wakefield | RED has let out leases to Lundgrens, Nordic IT and Stena Weco.

ISSUE III 2017 28 / 31

FOCUS

MACROECONOMICS

INVESTMENT  MARKET

OCCUPIER MARKET

APPENDIX


APPENDIX - DANISH TRANSLATION

ISSUE III 2017 29 / 31


ENGLISH VERSION AT PAGE 6

UDGIVELSE III FOKUS STRØGEJENDOMME FORTSAT EFTERTRAGTEDE INVESTERINGSOBJEKTER Opmærksomheden falder stadig ofte på København, når udenlandske investorer med high street investeringer for øje ser efter nye investeringsmuligheder i Europa. På trods af, at vi i retail-segmentet i stigende grad ser, at investorerne også kigger udenfor København, er high street markedet i København fortsat driveren på retail-investeringsmarkedet i Danmark. Der er især 3 attraktive forhold, der gør, at udenlandske investorer dominerer strøgmarkedet i København, og det lader til, at trenden ikke blot er en midlertidig hype.

OPTIMISMEN FORTSÆTTER PÅ HIGH STREET MARKEDET I løbet af de seneste år har high street transaktionerne i København tegnet sig for mellem 35% og 56% af transaktionsvolumen indenfor retail i Danmark. Af den foreløbige retailvolumen i 2017 (år til dato) udgør high-street transaktionerne i København 56%. Således fylder high street-segmentet i København stadig en stor del. Hos RED forventer vi fortsat optimisme på high street markedet. Ifølge Claus Bælum, Partner og Head of Capital Markets hos RED, skal årsagen blandt andet findes i positive danske makroøkonomiske forhold: ”Den stærke danske økonomi kombineret med stigende forbrugertillid og en forsat tilflytning til byen, spiller tilsammen en vigtig rolle for investeringslysten i de københavnske strøgejendomme. Strøggaderne bliver ikke større, men det gør oplandet.” Den øgede interesse for butiksejendomme på de to primære handelsstrøg i København, Strøget og Købmagergade, ses især blandt udenlandske investorer. Men hvilke faktorer har drevet de udenlandske investorer til at gøre indtog på det københavnske strøgmarked? Dette kigger vi nærmere på i denne artikel.

TRANSAKTIONSVOLUMEN 2012-2017 - HIGH STREET TRANSAKTIONERS ANDEL AF DEN SAMLEDE RETAIL-VOLUMEN

30 / 31

FOCUS

7,9 MIA KR.

7,7 MIA KR. 42%

35%

56% 58%

3,9 MIA KR. 2,5 MIA KR.

58%

64%

42%

56%

65%

44%

44%

36%

2012

2013

2014

HIGH STREET TRANSAKTIONER

2015

2016

2017 ÅTD

RESTERENDE ANDEL AF RETAIL TRANSAKTIONER

DE UNDERLIGGENDE FAKTORER

1. GUNSTIGE LÅNEFORHOLD

Alene inden for de seneste fem år er der blevet handlet for mere end 19,7 mia. kr. strøgejendomme, hvoraf 68% er købt af udenlandske investorer. Nu ser vi tilmed, at rene udenlandske transaktioner stiger markant, dvs. transaktioner hvor både køber og sælger er udenlandske. Af den foreløbige high street-volumen i 2017 (år til dato) udgør rene udenlandske transaktioner 85%. Til sammenligning så vi ingen rene udenlandske transaktioner i hverken 2012 eller 2013, imens vi i 2014-2016 sammenlagt så, at 48% af high-street volumen bestod af rene udenlandske transaktioner. Der er efter vores mening især 3 faktorer, der gør, at udenlandske investorer dominerer strøgmarkedet i København:

Ikke overraskende er en af de væsentligste årsager den gode adgang til billig finansiering, som er fulgt i kølvandet på renteudviklingen. Det danske realkreditsystem tilbyder de laveste finansieringsomkostninger i Europa for de første 60% af købesummen, og de udenlandske investorer er oftest ejendomsfonde med et ønske om at geare deres investeringer. 2. STADIG HØJERE AFKAST PÅ KØBENHAVNSKE STRØGEJENDOMME IFT. ANDRE EUROPÆISKE STORBYER Et andet væsentligt forhold er, at afkastet på strøgejendomme i København stadig er højere i forhold til andre europæiske storbyer. En rapport udarbejdet af RED

HIGH STREET TRANSAKTIONSVOLUMEN - DANSKE INVESTORER VS. UDENLANDSKE INVESTORER 4,5 MIA KR. 3,6 MIA KR.

5,0 MIA KR. 4%

DANSKE UDENLANDSKE

36%

2,8 MIA KR. 62%

1,6 MIA KR.

96%

56%

MACROECONOMICS

39%

2,2 MIA KR.

64%

44%

2012

ISSUE III 2017

9 MIA KR.

8,6 MIA KR.

61%

38%

2013

2014

INVESTMENT  MARKET

2015

OCCUPIER  MARKET

2016

100%

2017 ÅTD

APPENDIX


viser, at high street afkastet i København pt. er ca. 50 basispoint højere end eksempelvis i Paris og London. Dette kombineret med det danske realkreditsystem er medvirkende til et væsentligt højere afkast på den investerede kapital. Af grafen nedenfor fremgår det også, at der tidligere har været stor forskel på high street prime afkastet i København i forhold til Paris og London. I de senere år er denne forskel imidlertid blevet mindre i takt med, at strøgejendommene i København vurderes som meget sikre aktiver, på grund af lav genudlejningsrisiko og et meget likvidt og transparent transaktionsmarked. Desuden tyder det på, at flere udenlandske investorer i højere grad betragter København som en metropol med en voksende international betydning, hvilket også er med til at forklare hvorfor der er mindre forskel på high street prime afkastet i København i forhold til de europæiske storbyer: ”Med en voksende befolkning, voksende opland og meget attraktiv bykerne, som bliver mere og mere populær blandt turister, kunder og butikker, har København en stærk investeringsprofil i Hines’ øjne”, siger Peter Epping, Managing Director og Fund Manager hos det globale ejendomsinvesteringsselskab Hines.

PRIME NIY - HIGH STREET 6,00%

5,00%

HIGH STREET TRANSAKTIONSVOLUMEN - INVESTORERS INVESTERINGSPROFIL 5,0 MIA KR.

3,6 MIA KR.

1,00%

0,00% 2012

2013

2014

KØBENHAVN

FOCUS

2015 PARIS

2016

2017 LONDON

MACROECONOMICS

OPPORTUNISTISK 64%

65%

1,6 MIA KR. 38% 56% 6% 2012

2,8 MIA KR. 2,2 MIA KR.

60%

61% 64%

14%

36%

22%

18%

2013

2014

3. MULIGHED FOR VÆRDISKABELSE Flere internationale investorer kan ligeledes se yderst interessante muligheder for værdiskabelse i strøgmarkedet. Derfor er det københavnske strøgmarked præget af flere professionelle internationale investorer med både specifik retail-kompetence og erfaring fra andre storbyer i udvikling af strøgejendomme. Eksempelvis opkøbte det internationale investeringsselskab Avignon Capital Købmagergade 26 i 2014, som på det tidspunkt kunne betragtes som en opportunistisk investering. Avignon Capital har siden da øget værdien af Købmagergade 26 blandt andet i forbindelse med udviklingen af en ny stor stueetage i ejendommen, som blev færdig i 2016 og udlejet til det internationale tøjmærke Superdry. Siden overtagelsen er huslejen derved steget markant.

STRØGETS UDVIKLING: FRA OPPORTUNISTISK OG VALUE ADD TIL CORE

2,00%

VALUE ADD

22%

4,00%

3,00%

CORE

4,5 MIA KR.

I grafen ovenfor ses udviklingen indenfor strøghandler, herunder hvor stor en del, der er købt som core-investeringer, og hvor mange med udvikling for øje. Core-investeringer udgør nu en ganske stor andel af det samlede investeringsvolumen inden

INVESTMENT  MARKET

29% 11%

2015

2016

27% 9% 2017 ÅTD

for high street-segmentet. Dette er en naturlig konsekvens af, at de udenlandske fonde sælger deres ejendomme videre efter endt værdiudvikling til andre fonde, som fokuserer mere på en ”core” profil. Avignon Capitals salg af Købmagergade 26 til Hines i starten af året er et eksempel på netop dette.

FORVENTNINGER Hos RED mener vi fortsat, at der er gode grunde til optimisme på high street markedet. Den danske økonomi er fortsat sund, de demografiske forhold er gunstige og de københavnske strøggader er de mest attraktive i Norden. For investorer med en nordisk high-street strategi er København det mest likvide marked og det marked med den største koncentration af internationale lejere. Derudover giver det danske realkreditsystem stadig mulighed for at opnå fornuftige afkast på egenkapitalen – selv efter flere års faldende afkast på ejendommen. Rentefølsomheden er til stede, men denne kan investorerne delvist afdække ved at vælge en finansiering baseret på en lang rente.

OCCUPIER  MARKET

APPENDIX

ISSUE III 2017 31 / 31


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Market Report 2017 Issue III  
Market Report 2017 Issue III