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YEAR BOOK 2015 Property Investment Market


EXECUTIVE SUMMARY Kære læser, RED Property Advisers udsender hermed 2. udgave af ”Property Investment Market”, der ser tilbage på det seneste års transaktioner på det danske erhvervsejendomsmarked. I et marked, der stadig bliver mere internationaliseret og professionaliseret, er kravene til transparens og adgang til ejendomsdata kraftigt stigende. Vi håber med nærværende publikation igen at kunne bidrage med en let tilgængelig oversigt over aktiviteten på markedet i 2015, der transaktionsmæssigt var et særdeles stærkt år. Interessen fra internationale investorer var stor, hvor specielt København var et yderst likvidt marked. 2015 var også året, hvor udenlandske investorer søgte mod andre landsdele. Nettokapitalstrømmen til Europa var fortsat positiv, hvilket har genereret stor interesse på det danske investeringsejendomsmarked. Disse kapitalstrømninger kombineret med det lave renteniveau og det fordelagtige danske realkredits system har i stigende grad øget konkurrencen i markedet, hvilket har givet anlæg til yderligere prisstigninger gennem hele 2015 inden for de 3 hovedsegmenter – retail, bolig og kontor. God læselyst!

Dear Reader, RED Property Advisers hereby presents the 2ndedition of “Property Investment Market”. The report reflects on the transactions of the previous year in regards to the Danish real estate market. In a market, which is becoming more internationalized and professionalized, the demand for transparency and accessibility to market data is rapidly growing. With this publication we hope to contribute with a simple and easily accessible overview of the market activity in 2015, which in terms of transactions was yet a considerable strong year. The attention from the international investors was intense, and Copenhagen in particular was a highly liquid market. 2015 was also the year with an increasing interest among international investors for other parts of Denmark. The net inflow of capital to Europe was still positive, which has contributed to a wide interest in the Danish real estate market. The global capital inflow, the low interest rate, and the favorable Danish mortgage system have increased the level of competition, which has given rise to growing prices in the 3 main investment segments - retail, residential and office. Enjoy the report!


INVESTERINGSMARKEDET 2015 / INVESTMENT MARKET 2015

INVESTERINGSVOLUMEN 2015 Investment volume 2015



TOTAL INVESTMENT 2015

50.9

Den samlede investeringsvolumen var i 2015 ca. 50,9 mia. kr. med en klar overvægt af investeringer på Sjælland. Det københavnske marked har været genstand for stor efterspørgsel i de traditionelle segmenter; kontor, retail og bolig, men også opkøb af grunde til nybyggeri var stærkt stigende.

BN DKK*

The total investment volume in 2015 was approx. DKK 50.9 bn, with a strong dominance of investments on Zealand. In the Copenhagen market we have experienced a high demand in the traditional segments; retail, residential and office, but also acquisitions of land for new constructions became increasingly popular.

22% 3%

Retail

8%

10.6 BN DKK

Office Residential

23%

Land Other (incl. mixed use)

44%

8% 10%

19%

38.7 BN DKK

36%

9%

42%

1.6 BN DKK

19%

SOURCE: RED PROPERTY ADVISERS *DKK 59.2 BN IF INCLUDING THE SHARE ACQUISITION OF 49% OF DADES BY TRYGHEDSGRUPPEN AND NOVO A/S

30%

27%


INVESTERING - SEGMENTER OG TRANSAKTIONSSTØRRELSER Investment - Segments and transaction sizes

Mængden af udenlandsk kapital i Danmark har aldrig været højere med et in-flow på hele 18,8 mia. kr. svarende til en stigning på mere end 74% sammenholdt med 2014-niveauet. Som det har været kendetegnet de senere år, har specielt strøgejendomme og boligudlejningsejendomme været i udenlandske investorers søgelys, men 2015 var året, hvor de også søgte mod kontorsegmentet.

In 2015 the residential segment was the largest segment unlike 2014, where the office segment was dominating. This was due to the significant increase in transaction volume for residential properties compared to 2014. An increase coursed by a spillover effect from increasing prices in the the private markets combined with the low interest rate, that have made sell-off cases and conversions from office to residential extremely attractive.

INVESTED CAPITAL IN COMMERCIAL REAL ESTATE BY ORIGIN 35,000 30,000 25,000

M DKK

Boligsegmentet var i 2015 det største segment modsat 2014, hvor kontorsegmentet var dominerende. Dette skyldtes i høj grad en enorm stigning i transaktionsvolumen for boligejendomme sammenholdt med 2014. En stigning forårsaget af en afsmittende effekt fra ejerbolig markedets stigende priser kombineret med den lave rente, der har gjort frasalgscases samt konverteringer fra kontor til bolig yderst attraktivt.

20,000 15,000 10,000 5,000 0

2012

2013

Danish Investors SOURCE:

2014

2015

Foreign Investors

RED PROPERTY ADVISERS

The amount of foreign capital in Denmark has never been higher with an in-flow of DKK 18.8 bn - equivalent to an increase of more than 74% compared to the 2014-level.

TRANSACTION VOLUME - BREAKDOWN IN PRICE RANGE PRICE RANGE*

NO. OF

VOLUMES

IN M DKK

TRANSACTIONS

IN M DKK

0-5

2,067

3,338

5 - 10

370

1,896

10 - 20

230

2,403

20 - 50

128

3,974

50 - 100

64

4,391

100 - 200

42

5,615

200 - 300

21

4,926

300 - 400

7

2,397

400 - 500

2

842

500 - 1,000

13

8,632

< 1,000

8

12,521

TOTAL

2,952

50,935

TRANSACTION VOLUME IN DIFFERENT SEGMENTS 2015

Other

RED PROPERTY ADVISERS

17%

Land 9%

50.9 BN DKK

Residential 38%

*IF POSSIBLE PORTFOLIOS ARE REGISTERED AS SINGLE TRANSACTIONS

SOURCE:

Retail

9%

SOURCE:

RED PROPERTY ADVISERS

Office 27%


INVESTERINGSMARKEDET 2015 / INVESTMENT MARKET 2015

DANMARK SOM INVESTERINGSMARKED Denmark as investment market Danmark har med sin stabile økonomi, fastkurspolitik over for Euroen og lave renteniveau vist sig at være et attraktivt marked for udenlandsk kapital, der efterspørger høj sikkerhed og gunstig demografisk udvikling. De fundamentale makroøkonomiske parametre er stærke, og i en række mere kvalitative undersøgelser indtager Danmark og København en førerposition. Dertil kommer det stærke danske realkreditsystem, der beviste sin robusthed under krisen og giver investorer mulighed for at låne til lave marginer og med en høj grad af sikkerhed.

DENMARK

Denmark has with its stable economy, fixed exchange rate policy to the Euro, and the record low interest rate level; proven to be an attractive market for foreign investors, who demand low risk and a positive demographical development. The fundamental macroeconomic parameters are strong and in a number of more qualitative studies, Denmark and Copenhagen take on leading positions. There to it is to be mentioned the strong mortgage system which showed its robustness during the financial crisis giving investors the possibility to borrow at low margins and a high degree of security.

CURRENCY RATES

BN DKK

18.8

FOREIGN CAPITAL WAS INVESTED IN DENMARK

JAN 2016

USD

683.81

EUR

746.31

SOURCES: DANISH NATIONAL BANK

NO.

BEST FOR BUSINESS

BEST FOR TALENTS

EASE OF DOING BUSINESS

PROSPERITY INDEX

1

DENMARK

SWITZERLAND SINGAPORE

NORWAY

2

NEW ZEALAND

DENMARK

SWITZERLAND

3

NORWAY

LUXEMBOURG

4

IRELAND

NORWAY REPUBLIC OF KOREA

NEW ZEALAND

5

SWEDEN

NETHERLANDS HONG KONG

SWEDEN

6

FINLAND

FINLAND UNITED KINGDOM

CANADA

7

CANADA

GERMANY UNITED STATES

AUSTRALIA

8

SINGAPORE

CANADA SWEDEN

NETHERLANDS

9

NETHERLANDS

BELGIUM NORWAY

10

UNITED KINGDOM

SINGAPORE FINLAND

SOURCES: FORBES, IMD(ASSOCIATED WITH UN), WORLD BANK & LEGATUM INSTITUTE

NEW ZEALAND DENMARK

DENMARK

FINLAND IRELAND


RETAIL - INVESTERING Retail - Investment INVESTOR BREAKDOWN FOR RETAIL PROPERTIES IN 2015

Investeringsvolumen for retailejendomme er steget fra 7,3 mia. kr. i 2014 til 8,5 mia. kr. i 2015, hvoraf udenlandske investorer har stået for knap 70% af handlerne. Det største investorsegment på retailmarkedet i 2015 var de udenlandske fonde efterfulgt af brugere, qua salget af Illum til lejeren, Central Group. Retail segmentet har været drevet af stor efterspørgsel på strøgejendomme i København, men modsat tidligere år har interessen fra udenlandske investorer spredt sig til andre større byer.

Other

Institutional Investors

8%

4% Real Estate Companies 12%

The investment volume for retail properties went up from DKK 7.3 bn in 2014 to DKK 8.5 bn in 2015, whereof foreign investors have contributed with almost 70% of the volume. The largest investor segment on the Danish retail market in 2015 was the foreign property funds followed by users, due to the sales of Illum to the tenant, Central Group. The retail segment was driven by large demand at the Copenhagen high street market, but unlike previous years, the interest from foreign investors has spread out to other larger cities in Denmark.

8.5 BN DKK

Users 38%

Property Funds 38%

SOURCE:

RED PROPERTY ADVISERS

M DKK

RETAIL TRANSACTIONS AND FOREIGN INVESTORS SHARE

10,000

100%

9,000

90%

8,000

80%

7,000

70%

6,000

60%

5,000

50%

4,000

40%

3,000

30%

2,000

20%

1,000

10%

4.1

BN DKK

BETWEEN FOREIGN INVESTORS

IN 2015*

0%

0 2012

2013

Retail Transaction Volume SOURCE:

THE COPENHAGEN RETAIL MARKET HAS BECOME AN INTERNATIONAL MARKET WITH A TRANSACTION VOLUME OF

RED PROPERTY ADVISERS

2014

2015

Foreign Investors Share * IN 2014 THE TRANSACTIONVOLUME BETWEEN FOREIGN INVESTORS WAS DKK 1.25 BN.


INVESTERINGSMARKEDET 2015 / INVESTMENT MARKET 2015

TOP 5 RETAIL TRANSAKTIONER 2015 Top 5 retail transactions 2015 De udenlandske fonde har igen i år været yderst ak-

2

1

tive på større retail transaktioner, hvor de 5 største transaktioner har været med udenlandske købere. BlackRock videresolgte Danmarks bedst beliggende butiksejendom, Illum, til det thailandske selskab Central Group, der i forvejen var lejer af stormagasinet. Patrizia fulgte op på flere års massive investeringer på det danske marked med deres køb af Galleri K. Modsat tidligere år blev der i retailsegmentet handlet en del større aktiver uden for København, herunder Århus’ mest markante strøgejendom, Regina-ejendommen.

The foreign property funds have once again been active in larger retail transactions, where the 5 largest transactions have been conducted by foreign investors. BlackRock has sold the best located property in Denmark, the department store Illum, to the Thai investor Central Group, which already was the tenant. Patrizia followed through on several years of heavy investments in the Danish market with their acquisition of Galleri K. Unlike previous years several large investments were made outside Copenhagen, among others the Regina-property in Aarhus.

Address: Price: Sqm.: Investor: Vendor: Comments:

Illum, Copenhagen 2,700 M DKK 44,600 Sqm. Central Group BlackRock

The best located property in Denmark, the shopping centre, Illum, located in the heart of Copenhagen. Exited by BlackRock after 4 years of ownership.

Address: Price: Sqm.: Investor: Vendor: Comments:

Galleri K, Copenhagen 1,400 M DKK 16,700 Sqm. Patrizia Bank Of Ireland

Iconic retail property located next to Illum, at one of Europe’s longest pedestrian street, Strøget, with international retailers such as H&M, Urban Outfitters and Topshop as tenants.

3

4

Strædet, Køge Address: 560 M DKK Price: 25,500 Sqm. Sqm.: Citycon Investor: TK Development Vendor: In connection with the development Comments:

Address: Søndergade 53/Sønder Alle 9-11/ Amaliegade 20, Aarhus 275 M DKK Price: 10,200 Sqm. Sqm.: Standard Life Investor: Confidential Vendor: The first investment Comments:

Address: Price: Sqm.: Investor: Vendor: Comments:

by Standard Life outside Copenhagen. The property is arguably the most iconic retail property in Aarhus.

street property located at the main pedestrian street in Copenhagen, Strøget.

project Køge Kyst by the philanthropic fund RealDania, TK Development acquired the land and developed the pedestrian area and has recently sold the project to Citycon.

5

Vimmelskaftet 32-34 250 M DKK 2,295 Sqm. M&G Real Estate GEC Gads fond

The first Danish investment by M&G Real Estate. Vimmelskaftet 32-34 is a high


KONTOR - INVESTERING Office - Investment INVESTOR BREAKDOWN FOR OFFICE PROPERTIES IN 2015

Kontorsegmentet var det største investeringssegment i 2014 og udgør stadig næsten 30% af volumen, og efterspørgslen er bestemt ikke blevet mindre. Kontormarkedet er igennem 2015 blevet stadig mere attraktivt med transaktioner også uden for København. Segmentet er stadig domineret af danske pensionskasser, men både større ejendomsselskaber såvel som internationale fonde har været aktive.

Others 10% Institutional Investors

Private Investors

36%

10%

Investments in office properties represented the largest segment in 2014 and the segment still contributes with almost 30% of the total volume with no signs of demand slowing down. Throughout 2015, the office investment market has become increasingly more attractive among investors with a new tedency of investments also placed outside Copenhagen. The segment is still dominated by Danish pension funds, but also large real estate companies as well as international funds have been active.

13.5 BN DKK

Real Estate Companies 18% Property Funds 25% SOURCE:

OFFICE TRANSACTIONS AND FOREIGN INVESTORS SHARE

RED PROPERTY ADVISERS

GEOGRAPHICAL DISTRIBUTION FOR OFFICE PROPERTIES IN 2015

16.000

100% 90%

14.000

80% 12.000 70% 10.000

M DKK

60%

8.000

2,138

50%

M DKK

40%

6.000

10,877

30%

M DKK

4.000 20% 2.000

0

M DKK

0% 2012

2013

Office Transaction Volume SOURCE:

448

10%

RED PROPERTY ADVISERS

2014

2015

Foreign Investors Share SOURCE:

RED PROPERTY ADVISERS


estors

INVESTERINGSMARKEDET 2015 / INVESTMENT MARKET 2015

TOP 5 KONTOR TRANSAKTIONER 2015 Top 5 office transactions 2015 Med A. P. Møller Mærsks salg af deres kommende domicil på Amerika Plads blev der i 2015 sat en ny nedre grænse for afkast i kontorsegmentet. Den

1

2

Address: Lautrupparken 40-42, Niels Bohrs Allé 185, Lauritzens Plads 1 Price: 1,200 M DKK Sqm.: 89,000 Sqm. Investor: PensionDanmark Vendor: Kombit Comments: Portfolio consisting of 3 large

Sankt Petri Passagen Address: Est. 1,200 M DKK Price: 45,000 Sqm. Sqm.: Industriens Pension Investor: Carlyle Group Vendor: Comments: Located in the heart of Copenhagen

prominente ejendom Sankt Petri Passagen, der bl.a. huser advokatfirmaet Bruun&Hjejle, Mensch og Google, blev i starten af 2015 solgt til Industriens Pension for 1,2 mia. kr. Danske Bank startede en frasalgsstrategi af deres ejendomme, hvor de i december solgte deres ejendomme i Ejby og Glostrup i en sale and leaseback transaktion med svenske Wihlborgs Fastigheter som køber.

With A. P. Moeller Maersk’s sale of their upcoming domicile on Amerika Plads, a new lower yield bound on office investments for 2015 was set. The prominent property Sankt Petri Passagen, which among others is home to the law firm Bruun&Hjejle, Mensch and Google, was in the beginning of 2015 sold to Industriens Pension for DKK 1.2 bn. Danske Bank started a sell-off strategy of their properties, where they sold the back-office properties in Ejby and Glostrup to the Swedish investor Wihlborgs Fastigheter.

3

office buildings with long lease agreements with KMD.

4

Girostrøget and Ejby Industrivej 795 M DKK 110,000 Sqm. Wihlborgs Fastigheter Danske Bank

Address: Østbanegade 123 - Tietgens Have Price: Est. 750 M DKK Sqm.: 42,000 Sqm. Investor: Niam Vendor: Private investor Comments: Mixed property

Sale-and-leaseback transaction of Danske Bank’s offices in Glostrup and Ejby.

with more than 30,000 sqm. office space acting as head-quarter for the Danish tax authorities. Retail units and grocery stores are located at the ground floor.

Address: Price: Sqm.: Investor: Vendor: Comments:

with tenants such as the law firm Bruun&Hjejle, Mensch and Google.

5D

Address: Price: Sqm.: Investor: Vendor: Comments:

Amerika Plads 29 585 M DKK 16,000 Sqm. Jeudan A.P. Moeller Maersk

Future Maersk Domicile acquired by Jeudan with a 12-year non-termination period with A.P. Moeller Maersk as tenant.


BOLIG - INVESTERING Residential - Investment Boligsegmentet var i 2015 det største investeringssegment og udgjorde 38% af de samlede ejendomsinvesteringer i Danmark. Nyopførte boligudlejningsejendomme opdelt i ejerlejligheder er efterspurgt af de internationale investorer, mens den ældre boligmasse primært er i høj kurs blandt nationale investorer.

INVESTOR BREAKDOWN FOR RESIDENTIAL PROPERTIES IN 2015

Real Estate Companies

The demand for condominiums on the private market lead to price increases of 7.8% in Denmark as a whole and 9.4% in Copenhagen. Combined with the low interest rate, this has influenced the price on residential investment properties.

M DKK

RESIDENTIAL TRANSACTIONS AND FOREIGN INVESTORS SHARE 100%

18.000

90%

16.000

80%

14.000

70%

12.000

60%

10.000

50%

8.000

40%

6.000

30%

4.000

20%

2.000

10%

2013

Residential Transaction Volume SOURCE:

19.3 BN DKK

Private Investors 17%

Property Funds 57%

SOURCE:

RED PROPERTY ADVISERS

4,228 M DKK

14,560 248 M DKK

0% 2012

RED PROPERTY ADVISERS

2014

3%

GEOGRAPHICAL DISTRIBUTION FOR RESIDENTIAL PROPERTIES IN 2015

20.000

0

Institutional Investors

2%

21%

Efterspørgslen fra boligsøgende efter ejerlejligheder ledte til prisstigninger på 7,8% for hele landet og 9,4% i København, hvilket kombineret med den lave rente har haft en afsmittende effekt på prisen for boligudlejningsejendomme.

In 2015 the residential segment was the largest investment segment and contributed 38% of the total commercial real estate investments in Denmark. Newly built rental properties divided into condominiums are in high demand by international investors, while the old building mass is particularly popular among domestic investors.

Other

2015

Foreign Investors Share SOURCE:

RED PROPERTY ADVISERS

268 M DKK

M DKK


s

INVESTERINGSMARKEDET 2015 / INVESTMENT MARKET 2015

TOP 5 BOLIG TRANSAKTIONER 2015 Top 5 residential transactions 2015 For boligsegmentet oplevede man en række større

1

porteføljesalg, hvor den største anslås at være DNB Nords frasalg af deres danske boligportefølje

2

bestående af ca. 1000 ejerlejligheder til en estimeret salgspris på 2,2 mia. kr. Køberen var en ny udenlandsk investor, Coller Capital, hvilket bevidner om en stadig stigende international interesse på det danske marked.

For the residential segment we witnessed several portfolio deals with the largest being DNB Nord’s sale of their Danish residential portfolio consisting of approx. 1,000 condominiums at an estimated sales price of 2.2 bn DKK. The buyer was a new foreign investor in the Danish market; Coller Capital, which proves a still increasing international interest for the Danish market.

Address: Price: Sqm.: Investor: Vendor: Comments:

Portfolio in all of Denmark Est. 2,200 M DKK 93,000 Sqm. Coller Capital DNB Nord

Portfolio consisting of 1000 apartments across the country at an estimated price of DKK 2.2 bn.

consisting of 81 properties whereof 76 are located in Aarhus and the remaining part in the Copenhagen area - a total of approx. 900 condominiums.

4

3

Address: Price: Sqm.: Investor: Vendor: Comments:

Address: Portfolio in Aarhus Price: Est. 1,200+ M DKK Sqm.: 75,000 Sqm. Investor: COSMO Ejendomme Vendor: Distressed (Niels Jørgen Cramer) Comments: Residential portfolio

Øresundskysten 1,200 M DKK 57,000 Sqm. Balder Skanska Residential project

located on Amager consisting of 430 apartments.

Address: Price: Sqm.: Investor: Vendor: Comments:

5

CBD Portfolio 760 M DKK N/A N/A N/A Portfolio consisting of

newly built condiminiums in 4 different residential properties located i the centre of Copenhagen.

Address: Artha Kapital Portfolio, Copenhagen Price: 700 M DKK Sqm.: 29,593 Sqm. Investor: Pears Vendor: Artha Kapital Comments: The British family-office Pears acquired the entire property portfolio from Artha Kapital consisting of 26 residential properties.

NOTE: FURTHER TO THE ABOVE FIVE TRANSACTIONS THERE HAVE BEEN TWO TRANSACTIONS IN THE LEVEL OF DKK 1+ BN HOWEVER DETAILS FOR THESE HAVE NOT BEEN DISCLOSED


THE PROFESSIONAL AND EXPERIENCED CONSULTANCY IN THE COMMERCIAL REAL ESTATE MARKET

RED Property Advisers P/S Amaliegade 3, 5. floor 1256 København K 33 13 13 99 red@red.dk red.dk MDE, Chartered Surveyors MRICS

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