RED Danish Investment Update Q1 2019 by Cushman & Wakefield RED

DANISH INVESTMENT UPDATE 2019

INDHOLD CONTENTS

EXECUTIVE SUMMARY // EXECUTIVE SUMMARY Opbremsning i salget af boligejendomme præger transaktionsvolumen // Slowdown in the sale of residential properties impacts transaction volumes �� 4

MAKROØKONOMI // MACROECONOMICS København er fortsat sikker havn for ejendomsinvestorerne // Copenhagen continues to be a safe haven for commercial real estate investors �� 6

KONTOR // OFFICE Investeringsmarkedet // Investment market ��10 Lejemarkedet // Occupier market �� 12 Transaktioner og udlejninger // Transactions and leases ��14

BOLIG // RESIDENTIAL Investeringsmarkedet // Investment market ��18 Lejemarkedet // Occupier market ��20 Transaktioner og udlejninger // Transactions and leases �� 22

RETAIL // RETAIL Investeringsmarkedet // Investment market ��26 Lejemarkedet // Occupier market ��28 Strøgtælling // Footfall analysis �� 30 Transaktioner og udlejninger // Transactions and leases ��32

INDUSTRI & LOGISTIK // INDUSTRIAL & LOGISTICS Investeringsmarkedet // Investment market ��36 Transaktioner // Transactions ��38

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

EXECUTIVE SUMMARY EXECUTIVE SUMMARY

Opbremsning i salget af boligejendomme præger transaktionsvolumen Slowdown in the sale of residential properties impacts transaction volumes Første kvartal af 2019 viser en transaktionsvolumen på 9,4 mia. kr. ( figur 1), svarende til en nedgang på ca. 40% sammenlignet med første kvartal af 2018, hvor der blev handlet ejendomme for 15,9 mia. kr. Denne nedgang i volumen er primært drevet af en markant nedgang i transaktionsvolumen på boligejendomme på 47%. Høje prisforventninger og usikkerhed omkring fremtidig lovgivning Tilbageholdenheden kan formentlig tilskrives en kombination af sælgernes høje prisforventninger og usikkerheden omkring de fremtidige regler for lejefastsættelsen i boligejendomme omfattet af paragraf 5, stk. 2. En forøgelse af beløbsgrænsen for renoveringer af lejligheder vil kunne give prisfald på op til 15-20% for de ejendomme, som bliver hårdest ramt. Indtil der er politisk klarhed omkring de fremtidige regler, forventer RED, at investorerne vil være mere tilbageholdende.

The first quarter of 2019 shows a transaction volume of DKK 9.4 bn ( figure 1), corresponding to an approximate 40% drop compared to the first quarter of 2018, when a total of DKK 15.9 bn was traded in commercial real estate. This decrease in volume is primarily driven by a significant 47% decrease in residential property transactions. High price expectations and uncertainty about future legislation Investor restraint may assumably be ascribed to a combination of the sellers' high price expectations and current uncertainty regarding the future rent assessment rules in housing properties covered by paragraph 5, section 2. Increasing the amount limit for renovations of flats could result in price reductions of up to 15-20% for the properties most affected. Until there is political certainty on the future rules, RED expects investors to be more reluctant.

Bolig er fortsat det største segment På trods af denne nedgang, er bolig med 43% af den samlede transaktionsvolumen i første kvartal, fortsat det største ejendomssegment, mens kontor ligeledes fortsat indtager andenpladsen med 25% af volumen ( figur 2). Industriejendomme har, med en andel på 13% af volumen i første kvartal af 2019, overtaget pladsen som det tredjestørste segment fra retailsegmentet, primært drevet af den internationale investor M7’s køb af en større dansk industri- og logistikportefølje. Stor mængde kapital, men de udenlandske investorer afventer Udenlandske investorer købte danske ejendomme for knap 3,4 mia. kr. i første kvartal 2019, mod 7,4 mia. kr. i første kvartal 2018, svarende til godt en halvering. Dermed står de udenlandske investorer for 36% af den samlede transaktionsvolumen mod 46% i første kvartal

Residential remains the largest segment Despite this decline, with 43% of the total transaction volume in the first quarter, residential remains the largest property segment, while office is also still the second largest with 25% of the total volume ( figure 2). With a share of 13% of the total volume in the first quarter of 2019, industrial properties have taken over as the third largest segment from the retail segment, primarily driven by the international investor M7's purchase of a large Danish industrial and logistics portfolio. Large amount of capital but the foreign investors remain hesitant Foreign investors acquired Danish properties at a total of just under DKK 3.4 bn in the first quarter of 2019, compared to DKK 7.4 bn in the first quarter of 2018, corresponding to a near 50% drop. Thus, foreign investors account for 36% of the total transaction volume against 46% in the first quarter of 2018 and the downward trend is

4 // RED - Danish Investment Update Q1 2019

2018 og den nedadgående tendens fortsættes dermed fra 2018 ( figur 3). Der er mere kapital til investering i fast ejendom end nogensinde før, men de internationale investorer har svært ved at finde ejendomme i København og Aarhus, som de vurderer fair prissat. Dette medfører, at kapitalen akkumuleres og investorerne afventer. Uagtet at de udenlandske investorer har købt mindre i første kvartal 2019 sammenlignet med samme kvartal sidste år, præger de fortsat listen over de investorer, som foretager de største investeringer. Således er der fem udenlandske investorer at finde på listen over de mest aktive investorer i første kvartal 2019, med Heimstaden som den mest aktive investor, med køb for 700 mio. kr., efterfulgt af engelske M7 og Aberdeen Standard Investment og tyske Patrizia og Deka ( figur 4). God læselyst!

thus continued from 2018 ( figure 3). There is more capital for investment in real estate than ever before, but international investors find it difficult to find properties in Copenhagen and Aarhus, which they consider fairly priced. This means that capital is accumulated and investors are adopting a wait-and-see attitude. Albeit foreign investors have acquired less in Q1 2019 compared to Q1 last year, they still characterise the list of investors who made the largest investments. Thus, five foreign investors are on the list of the most active investors in Q1 2019, with Heimstaden as the most active investor, with purchases for DKK 700 m, followed by English M7 and Aberdeen Standard Investment and German Patrizia and Deka ( figure 4). Enjoy the report! Nicholas Thurø Managing partner, Cushman & Wakefield

Figure 1: Transaction volume Q1 2019 Other 1% Hospitality 3% Land 6%

9.4

Industrial 13%

Residential 43%

BN DKK

Office

Estimates of smaller transactions below DKK 35 M are weighted evenly on all segments.

25%

Source: C&W | RED

Figure 2: Geographic distribution

Figure 3: Danish and foreign investors

Triangle Region

Copenhagen

43%

Other Jutland 16% Other Zealand 6% Funen 4% Aarhus

9.4 BN DKK

4% Greater Copenhagen 23%

Where it has not been possible to identify specific geographic regions, portfolios are weighted evenly on all regions.

Figure 4: Top 5 investors Q1 2019

Source: C&W | RED

36%

64%

Foreign

Danish

Source: C&W | RED

Figure 5: Investment Market Indicators Office

Investor

Transactions (DKK M)

Q2 2018

Q2 2019

Trend

Prime yield (Copenhagen City)

3.75%

4.00%

+25 bp

Investment volume in M DKK

3,556

2,171

-1,385

Vacancy (Copenhagen City)

5.60%

6.00%

+25 bp

Heimstaden

700

Retail

420

Prime yield (Copenhagen High Streets)

3.00%

4.00%

1,363

0,798

-0,565

Prime yield (Copenhagen Area)

5.75%

Prime yield (Triangle Area)

6.00%

Investment volume in M DKK

1,447

1,149

-0,298

Aberdeen Standard Investment

350

Secondary yield (Copenhagen Side Streets)

Patrizia

348

Investment volume in M DKK

Deka

Source: C&W | RED

336

Industrial

Source: C&W | RED 5

MAKROÃ&#x2DC;KONOMISK OVERBLIK MACROECONOMIC OVERVIEW Figure 6: Real Danish GDP development 1.0%

0.5%

0.0%

Q2 2017

Q3 2017 Q4 2017

Q1 2018

Q2 2018

Q3 2018

Q4 2018

-0.50%

-1.00%

-1.50% Source: C&W | RED

Figure 7: Key variables Key variable

A year ago

Most recent

GDP Growth Rate y/y

4.18%

0.90%

Inflation Rate y/y

1.70%

1.10%

Unemployment Rate - Denmark

4.60%

4.40%

Unemployment Rate - Copenhagen Region

4.50%

4.40%

10 year Government Bond

0.36%

0.33%

-0.65%

-0.50%

2.34%

2.08%

Short Term Mortgage Rate - 1 and 2 year bonds Long Term Mortgage Rate - 30 year bonds Source: C&W | RED

6 // RED - Danish Investment Update Q1 2019

Trend

København er fortsat sikker havn for ejendomsinvestorerne Copenhagen continues to be a safe haven for commercial real estate investors

Den danske økonomi oplever fortsat beskeden, men stabil, vækst over hele linjen med stigende beskæftigelse, lav inflation, lave renter og en sund BNP-udvikling. De nyeste tal viser en sæsonkorrigeret kvartalsvækst i real-BNP på 0,8% i fjerde kvartal 2018 i forhold til tredje kvartal 2018 ( figur 6). Især industri- og transportsektorerne bidrager positivt til væksten. På trods af, at den solide vækst i byggebranchen de senere år er aftaget i tempo, stiger aktiviteten ligeledes fortsat i denne sektor. Lav inflation og lave renter I efteråret 2018 havde Danmark, i en længere periode, den laveste inflation i hele EU. Inflationen i Danmark er steget i de første måneder af 2019 og ligger i øjeblikket på ca. 1,10%, hvilket stadig er 0,4 procentpoint lavere end det europæiske gennemsnit på 1,50%. Generelt stiger inflationen i hele Europa på

The Danish economy continues a modest and steady growth across the board with rising employment, low inflation, low interest rates, and healthy GDP development. Most recent figures show a seasonally adjusted quarter-on-quarter real GDP growth of 0.8% in Q4 2018 compared to Q3 2018 ( figure 6). Industry and transport in particular contribute positively to the growth. Recent years' solid production growth in the construction industry has slowed down, but is, nevertheless, still climbing. Low inflation and interest rates For a long period during the autumn of 2018, Denmark had the lowest inflation rate of all the EU nations. The inflation rate in Denmark has increased during the first months of 2019 and currently stands at approx. 1.10% which is still 0.4 percentage points lower than the European average of 1.50%. In general inflation rates are rising across Europe due to fluctuating oil prices and food price increases.

grund af fluktuerende oliepriser og stigninger i fødevarepriserne. Renterne i Danmark er fortsat historisk lave. Mens det er umuligt at forudsige, hvordan de vil udvikle sig i fremtiden, forventer økonomer og banker ingen nævneværdig ændring i 2019. Sandsynligheden for en yderligere lang periode med lave renter i Europa har sendt renten til rekordlave niveauer. Stigende beskæftigelse Beskæftigelsen i Danmark stiger fortsat og har, ifølge de seneste tal fra fjerde kvartal 2018, nået ca. 2.800.000 beskæftigede ( figur 7). Beskæftigelsesfrekvensen i Danmark er steget støt fra slutningen af 2012 og er i de sidste 12 måneder steget med 43.000 mennesker, hvilket er en stærk indikation af den positive danske økonomiske udvikling.

Interest rates in Denmark remain at historically low levels. While it is nearly impossible to predict how they will develop in the future, economists and banks do not expect much change in 2019. The likelihood of a further long period of low interest rates in Europe has sent the interest rates to new lows. Increasing employment rates Employment in Denmark continues to increase and has, according to the latest figures from Q4 2018, reached approx. 2,800,000 people in employment ( figure 7). The employment rate in Denmark has been steadily increasing from late 2012, and in the last 12 months increased by 43,000 people which is a strong indication of the positive Danish economic development.

Som følge af den øgede beskæftigelse er arbejdsløsheden faldet til 3,80% af arbejdsstyrken mellem 16 og 67 år. På trods af dette er antallet af virksomheder, der rapporterer mangel på arbejdskraft som en begrænsning af produktionen, faldet i de seneste måneder. Fald i lejlighedspriserne for første gang i seks år Den høje beskæftigelse, det stigende lønniveau og de lave renter afspejles ligeledes i høje priser på privatejede ejendomme. Husprisudviklingen forventes imidlertid at aftage fra en årlig landsdækkende sats på 3-5% til 2-3%. Lejlighedspriserne har været under pres i et år, og for første gang siden sommeren 2012 er priserne på lejligheder i 2018 faldet over hele landet set på et helt år. Dette skyldes strammere udlånsregler og et stigende udbud af nye ejendomme.

67. Despite this, the number of firms reporting shortages of labour as a constraint on production has decreased in recent months. First drop in flat prices in six years Strong employment, rising wages and low-interest rates are also reflected in the high prices on privately owned real estate. However, house price development is expected to slow from an annual rate of around 3-5% to 2-3% at national level. Flat prices have been under pressure for a year now, and for the first time since the summer of 2012, flat prices across the country have declined looking at a full year. This is due to tighter lending rules and a growing supply of new properties.

As a consequence of increased employment, the unemployment rate has declined to 3.80% of the workforce between the age of 16 and

KONTOR // OFFICE Investeringsmarkedet // Investment market ��10 Lejemarkedet // Occupier market �� 12 Transaktioner og udlejninger // Transactions and key figures ��14

KONTOR - INVESTERINGSMARKEDET OFFICE - INVESTMENT MARKET

Kontorvolumen holder momentum Office volume maintains momentum Der blev i første kvartal 2019 handlet kontorejendomme for 2.2 mia. kr., svarende til et fald i aktiviteten på 39% i forhold til første kvartal 2018 ( figur 8). Svenske Klöverns køb af Codanhus fra DADES for 1,4 mia. kr., repræsenterede dog knap halvdelen af volumen i første kvartal 2018. Sorteres denne handel fra, er transaktionsvolumen i første kvartal 2019 steget med 3%, hvilket betyder, at segmentet helt overordnet fastholder momentum. Efterspørgslen er fortsat fortrinsvist efter centralt beliggende kontorejendomme i Hovedstaden og Aarhus.

In Q1 2019, the office property transaction volume reached DKK 2.2 bn, corresponding to a 39% decrease in activity compared to Q1 2018 ( figure 8). Swedish Klövern's acquisition of Codanhus from DADES at DKK 1.4 bn, however, represented roughly half of the Q1 2018 volume. Disregarding this single transaction, the office transaction volume has increased by 3% in the Q1 2019, meaning that the segment maintains overall momentum. Office represents 25% of volumes The office segment remains the second largest segment and in Q1 2019 accounted for 25% of

Kontor står for 25% af volumen Kontorsegmentet er fortsat det næststørste segment og stod i første kvartal 2019 for 25% af transaktionsvolumen. København er ubetinget det største marked og København og Storkøbenhavn repræsenterer tilsammen 73% af markedet, mens Jylland står for 13% af transaktionsvolumen ( figur 8). Mere aktive danske investorer De danske investorer var mere aktive i første kvartal 2019 og stod for hele 82% mod 42% i første kvartal 2018 ( figur 9), til trods for, at de to største handler er foretaget af internati-

onale investorer. Den største handel er tyske Dekas køb af EY’s hovedkvarter på Flintholm for 335 mio. kr., mens den næststørste handel er internationale Aviva Investors køb af Niels Juels Gade 9-13 ved Holmens Kanal for 321 mio. kr. Der er i alt registreret otte handler med en værdi over 100 mio. kr. Afkastniveauet ser steget en anelse til 4,00% for prime København ( figur 10), hvilket vi forventer fastholdt på kort sigt.

transaction volume. Copenhagen is unquestionably the largest market and Copenhagen and Greater Copenhagen combined represent 73% of the market, while Jutland accounts for 13% of the transaction volume ( figure 8).

largest trade is international Aviva Investor's acquisition of Niels Juels Gade 9-13 at Holmens Kanal in Copenhagen for DKK 321 m. Eight trades at a net value exceeding DKK 100 m have been registered.

More active Danish Investors The Danish investors were more active in Q1 2019 and accounted for 82% against 42% in Q1 2018 ( figure 9), despite the fact that the two largest transactions were undertaken by international investors. The largest trade is German Deka's acquisition of EY's headquarters at Flintholm at DKK 335 m, while the second

Yield requirements have increased to 4.00% for prime Copenhagen ( figure 10), at which level we expect it to remain in the short term.

10 // RED - Danish Investment Update Q1 2019

Investment market  Occupier market u Transactions and leases u

Figure 8: Transaction volume and geographic break down

Triangle Region 5% Other Jutland 13% Other Zealand 4%

2.2

Funen 5%

Copenhagen 45%

BN DKK

Greater Copenhagen 28% Estimates of smaller transactions below DKK 35 m are weighted evenly on all segments. Source: C&W | RED

Figure 9: Danish and foreign investors

Figure 10: Prime yields Q1 2019 Office areas

18%

82%

Foreign

Danish

Source: C&W | RED

Yield level

CBD – City center and Christianshavn

4.00%

Kalvebod Brygge

4.25%

North Harbour and Amerika Plads

4.00%

Frederiksberg

4.50%

Copenhagen E

4.50%

Copenhagen W and Carlsberg

4.00%

Copenhagen N

5.50%

Copenhagen NW

5.50%

Islands Brygge

5.00%

Ørestad

5.00%

South Harbour

5.00%

Valby

5.00%

Amager East and Copenhagen Airport

5.25%

Tuborg Harbour

4.75%

Kongens Lyngby

4.75%

Ring 3

5.50%

Source: C&W | RED

KONTOR - LEJEMARKEDET OFFICE - OCCUPIER MARKET

Økonomisk vækst har skabt stærk efterspørgsel Economic growth has generated strong demand De senere års meget positive udvikling i konjunkturerne har resulteret i en stigende beskæftigelse, der nu manifesterer sig i en stærk efterspørgsel på kontorlokaler. Den stærke efterspørgsel kan aflæses direkte i tomgangstallene, der ifølge Ejendomstorvet marts 2019 udgør 6% for København og 10,7% for Storkøbenhavn ( figur 11). Fleksibilitet og kort uopsigelighed efterspørges Lejerne er tiltagende bevidste om behovet for fleksible løsninger i forhold til deres arealforbrug. Dette ses tydeligt i markedet, hvor der efterspørges fleksibilitet i lejemålsstørrelsen og korte uopsigeligheder, hvilket har resulteret i en stigende efterspørgsel på skalerbare lejemål i

Recent years' very positive business cycle developments have translated into rising employment, which is now manifesting itself in strong demand for office space. The strong demand can be read directly in the vacancy rates, which according to Danish property portal Ejendomstorvet in March 2019 sits at 6% for Copenhagen and 10.7% for Greater Copenhagen ( figure 11). Flexibility and short irrevocability periods are in demand Tenants are increasingly aware of the need for flexible solutions in relation to their spatial needs. This is clearly seen in the market, where flexibility and short irrevocability is in high

flerbrugerejendomme og deciderede kontorfællesskaber.

god infrastrukturel tilgængelighed og udbud af moderne ejendomme.

Beliggenhed og kvalitet er afgørende Stigende beskæftigelse og høj økonomisk vækst medfører, at virksomhederne på et strategisk plan forsøger at optimere deres mulighed for at tiltrække og fastholde talentfulde medarbejdere gennem valget af beliggenhed og kvaliteten af de fysiske rammer for arbejdspladsen. Den primære efterspørgsel på kontorlokaler er centreret omkring CBD og brokvartererne, men også områder som Carlsberg Byen, Christianshavn, Nordhavn, Ørestad og Tuborg Havn efterspørges. Som et af de få områder uden for København er Kgs. Lyngby ligeledes et efterspurgt område som følge af

Høj efterspørgsel fører til stigende lejeniveau på de bedste beliggenheder Den stigende efterspørgsel på centralt beliggende kontorlokaler har, sammen med et begrænset omfang af spekulativt nybyggeri, resulteret i stigende lejeniveauer både i primære og sekundære områder. Markedslejen for prime kontorer er steget med ca. 10% siden ultimo 2015 og ligger nu på ca. 1.700 – 1.900 kr./ m² ekskl. driftsomkostninger. For sekundære kontorer ligger markedslejen i niveauet 1.100 1.500 kr./m² ekskl. driftsomkostninger ( figur 12).

demand, which has led to increasing demand for scalable leaseholds in multi-user properties and dedicated co-working spaces.

also a popular area due to good infrastructural accessibility and supply of modern properties.

Location and quality is essential Increasing employment and strong economic growth mean that companies at a strategic level attempt to optimise their ability to attract and retain talented employees through location and quality of the physical environment for the workplace. Primary demand for office space is centered around the CBD and inner Copenhagen, but also areas such as Carlsberg Byen, Christianshavn, Nordhavn, Ørestad and Tuborg Havn are in demand. As one of the few areas outside Copenhagen, Kgs. Lyngby is

12 // RED - Danish Investment Update Q1 2019

Strong demand leads to increasing rents on the best locations Increasing demand for centrally located office space, coupled with a limited amount of speculative new construction, has resulted in rising rental levels in both primary and secondary locations. The market rent for prime offices has increased by approx. 10% since end-2015 and now sits at approx. DKK 1,700 - 1,900 sq m excl. operating costs. For secondary offices, the market rent is in the range of DKK 1,100 - 1,500 sq m excl. operating costs ( figure 12).

Investment market u Occupier market  Transactions and leases u

Figure 11: Vacancy and unemployment rates

12,0% 10,0% 8,0% 6,0% 4,0% 2,0%

Vacancy rate Copenhagen City

Vacancy rate Copenhagen Area

Q1 2019

Q4 2018

Q3 2018

Q2 2018

Q1 2018

Q4 2017

Q3 2017

Q2 2017

Q1 2017

Q4 2016

Q3 2016

Q2 2016

Q1 2016

Q4 2015

Q3 2015

Q2 2015

Q1 2015

Q4 2014

Q3 2014

Q2 2014

Q1 2014

Q4 2013

Q3 2013

Q2 2013

Q1 2013

Q4 2012

Q3 2012

Q2 2012

Q1 2012

0,0%

Unemployment Copenhagen Area

Source: C&W | RED

Figure 12 Prime rent Q1 2019 Office areas

Rent level (DKK)

CBD – City center and Christianshavn

1,850

Kalvebod Brygge

1,700

North Harbour and Amerika Plads

1,900

Frederiksberg

1,450

Copenhagen E

1,500

Copenhagen W and Carlsberg

1,600

Copenhagen N

1,300

Copenhagen NW

1,200

Islands Brygge

1,450

Ørestad

1,500

South Harbour

1,300

Valby

1,350

Amager East and Copenhagen Airport

1,425

Tuborg Harbour

1,600

Kongens Lyngby

1,450

Ring 3

1,100

Source: C&W | RED

KONTOR - TRANSAKTIONER OG UDLEJNINGER OFFICE - TRANSACTIONS AND LEASES

Figure 13: Office transactions Q1 2019 Street name

Location

Date

Buyer name

Vendor name

Size (sqm)

Price (DKK M)

Dirch Passers Alle 36

Frederiksberg

Mar

Deka

NCC

9,791

335

Niels Juels Gade 9-13

Copenhagen K

Mar

Aviva

Gefion Group

7,650

321

Bankinvest acquires for DKK 300 m offices

Copenhagen Ø

Feb

Bank Invest

PFA Pension

N/A

300

Bygningsstyrelsen Portfolio

Denmark

Mar

Bygningsstyrelsen

Various

27,009

180

Nordre Fasanvej 108

Frederiksberg

Jan

Private Investor

Jørn Tækker

4,968

130

Rygårds Allé 131

Hellerup

Mar

Jeudan A/S

Private Investor

5,545

121

Glentevej 61

Copenhagen NV

Mar

Viscop

Wihlborgs A/S

10,385

121

Glentevej 67

Copenhagen NV

Mar

Viscop

Wihlborgs A/S

8,785

102

Ringager 4

Brøndby

Mar

Fast Ejendom Danmark A/S

Private investor

22,716

Brænderigården 1-27

Holstebro

Mar

Real Estate Company

Frederiksborg Ejendomsinvest ApS

5,252

Source: C&W | RED

14 // RED - Danish Investment Update Q1 2019

Investment market u Occupier market u Transactions and leases 

Figure 14: Significant office leases Q1 2019 Street name

Location

Date

New Tenant

Size (sqm)

Axeltorv 2

Copenhagen V

Feb

Arup

1,828

Frederiks Plads II

Aarhus C

Mar

Nordea

8,500

Borgmestergården

Copenhagen SV

Mar

Confidential

3,000

Dusager 18

Aarhus N

Jan

Tryg Forsikring A/S

5,771

Amagertorv 19

Copenhagen K

Jan

Gina Tricot

811

Amaliegade 27, 1. sal

Copenhagen K

Mar

IK Investment Partners

492

Gl. Lundtoftevej 1-9

Kongens Lyngby

Jan

B&O

1,521

Lautrupvang 4B

Ballerup

Mar

CGI Danmark A/S

4,144

Source: C&W | RED

BOLIG // RESIDENTIAL Investeringsmarkedet // Investment market ��18 Lejemarkedet // Occupier market ��20 Transaktioner og udlejninger // Transactions and leases �� 22

BOLIG - INVESTERINGSMARKEDET RESIDENTIAL - INVESTMENT MARKET

Høje prisforventninger og lovgivningsmæssig usikkerhed bremser aktiviteten High price expectations and regulatory uncertainty slows activity Første kvartal 2019 bød på en samlet transaktionsvolumen for boligejendomme på kr. 3,8 mia., hvilket er knap en halvering af de kr. 7,2 mia., der blev handlet boligejendomme for i første kvartal 2018 ( figur 15). Tilbageholdenheden kan delvist tilskrives en kombination af sælgernes prisforventninger og usikkerheden omkring de fremtidige regler for lejefastsættelsen i ejendomme omfattet af paragraf 5, stk. 2. En forøgelse af beløbsgrænsen for renoveringer af lejligheder, der er omfattet af §5, stk. 2, vil kunne give prisfald specielt på ejendomme beliggende udenfor København og Aarhus. Indtil der er politisk klarhed omkring de fremtidige regler, forventer RED, at investorerne vil være mere tilbageholdende. En anden forklaring på faldende transaktionsvolumen kan være, at få af de opførte ejen-

Q1 2019 offered a total transaction volume for residential properties of DKK 3.8 bn, which is almost a halving of the DKK 7.2 bn that residential property transactions reached in Q1 2018 ( figure 16). Investor restraint may partly be ascribed to a combination of sellers' high price expectations and the uncertainty regarding the future rent assessments rules in housing properties covered by paragraph 5, section 2. Increasing the amount limit for renovations of flats could result in price reductions on properties outside Copenhagen and Aarhus. Until there is political certainty on the future rules, RED expects investors to be more reluctant. Another explanation for the decreasing transaction volume may be that few of the constructed

domme er til salg, idet der er et stort udbud af projektejendomme, hvor tidshorisonten for levering er to til tre år. Bolig er fortsat de største segment Boligsegmentet har historisk været det mest efterspurgte i Danmark, hvilket, på trods af en markant transaktionsnedgang, fortsat er tilfældet. Segmentet repræsenter således 45% af transaktionsvolumen i første kvartal 2019. København er fortsat det største marked og repræsenterer 60% af markedet, mens Storkøbenhavn står for 14% af transaktionsvolumen og Jylland står for 12% ( figur 15). Ligelig fordeling mellem danske og udenlandske investorer Fordelingen mellem danske og internationale investorer er, ligesom det var tilfældet i første kvartal 2018, fortsat afbalanceret. Således stod

properties are for sale, as there is a large supply of project properties, for which the time horizon for delivery is two to three years. Residential remains the largest segment The residential segment has historically been the most popular in Denmark, which, despite a significant drop in transactions, remains the case in Q1 2019. The segment thus represents 45% of the total transaction volume in Q1 2019. Copenhagen remains the largest market and represents 60% of transactions, while Greater Copenhagen accounts for 14% of transactions and Jutland accounts for 12% ( figure 15). Equal distribution between Danish and foreign investors As was the case in Q1 2018, the distribution between Danish and international investors is still

18 // RED - Danish Investment Update Q1 2019

de danske investorer for 51% i første kvartal 2019 mod 53% i 2018 ( figur 16). Kvartalets største handel er norske Heimstadens køb af Kastelsvej 18 og Finsensvej på Østerbro til en samlet værdi af 365 mio. kr. Heimstaden har det seneste år været meget aktiv på det danske boligmarked og købte i 2018 danske boligejendomme for 7,8 mia. kr. Afkastniveauet i København ligger i niveauet 3,25% – 4,00% for de bedste beliggenheder for nyopførte ejendomme ( figur 17). Vi forventer et uændret til svagt stigende afkastniveau. I forhold til §5, stk. 2 ejendomme forventer vi et svagt stigende afkastkrav, indtil der er politisk klarhed omkring disse ejendomme.

balanced. Thus, Danish investors accounted for 51% in Q1 2019, compared to 54% in 2018 ( figure 16). The quarter's largest trade is Norwegian Heimstaden's acquisition of Kastelsvej 18 and Finsensvej in Østerbro at a total value of DKK 365 m. In recent years, Heimstaden has been very active in the Danish residential market and in 2018 they acquired Danish residential properties at a total DKK 7.8 bn. Copenhagen yields lie at approximately 3.25% - 4.00% for the best locations for newly constructed properties ( figure 17). We expect unchanged to slightly rising yield levels. In relation to §5, section 2 properties, we expect a slightly increasing yield requirement until there is political certainty about these properties.

Investment market  Occupier market u Transactions u

Figure 15: Transaction volume and geographic break down

Triangle Region 3% Other Jutland 12% Other Zealand 7%

3.8

Funen 4% Greater Copenhagen

Copenhagen 60%

BN DKK

14%

Estimates of smaller transactions below DKK 35 m are weighted evenly on all segments. Source: C&W | RED

Figure 16: Danish and foreign investors

Figure 17: Prime yields Q1 2019 Subarea

Yield level

Copenhagen City

3.25%

Copenhagen E, W & N

3.75%

Copenhagen NW

4.50%

Copenhagen S

3.75%

Frederiksberg

3.50%

North Harbour

3.50%

South Harbour

3.75%

Valby

3.75%

Vanløse

3.75%

Source: C&W | RED

49%

51%

Foreign

Danish

Source: C&W | RED

BOLIG - LEJEMARKEDET BOLIG - OCCUPIER MARKET

Storbyen tiltrækker folk People are drawn to the cities De større byer har gennem de seneste mange år oplevet en positiv befolkningsvækst drevet af jobmuligheder, bedre infrastruktur, uddannelsesinstitutioner, og byliv. Specielt København har formået at holde på nuværende indbyggere selv efter de har stiftet familie. Alt i alt en nettotilflytning som er skabt af tiltrækning af nye indbyggere såvel som fastholdelse af eksisterende. Befolkningsvæksten har i en lang årrække sat ejer-boligpriser, såvel som lejeboligpriserne, i København under et opadgående pres, som har skabt en stor byggeaktivitet. Fortsat mange udviklingsområder Sydhavnen og Ørestad er i store træk færdigudviklet med henholdsvis 275.000 m² og 125.000 m² bolig, hvorimod der i Nordhavn kun er udviklet 10% af den samlede kapacitet på

Over the past many years, the larger cities have experienced positive population growth driven by job opportunities, better infrastructure, educational institutions, and urban life. Particularly Copenhagen has managed to retain residents even after they have established a family. All in all, a net move created by the attraction of new residents as well as the retention of existing ones. For a number of years, population growth has put house prices as well as residential rents in Copenhagen under an upward pressure, which has created strong construction activity. Still many development areas Sydhavnen and Ørestad are largely developed with 275,000 sq m and 125,000 sq m of housing, respectively, whereas in Nordhavn only 10% of the total capacity of 40,000 homes have

40.000 boliger. Af fremtidige store udviklingsområder i København kan nævnes Lynetteholm og Refshaleøen. Det er ikke alene Københavns kommune, der tilbyder en lang række udviklingsområder, men også flere omkringliggende kommuner langs den kommende letbane fra Ishøj til Lyngby, hvor der forventes at blive udviklet flere hundrede tusinde kvadratmeter til bolig. Lejepriserne ventes at stagnere Investorerne betragter lejen per kvadratmeter, hvorimod lejerne fokuserer på en samlet leje per måned. For udlejningsboliger oplever investorerne, at familieboliger med en månedlig husleje på over kr. 15.500 plus forbrug er svære at udleje. Nye boligudlejningsejendomme har oplevet en stor stigning i lejeniveauer de

been developed. Future major development areas in Copenhagen include Lynetteholm and Refshaleøen. Not only the city of Copenhagen offers a large number of development areas, but also in several neighboring municipalities along the upcoming light rail from Ishøj to Lyngby, several hundred thousand square meters are expected to be developed for housing. Stagnant rents are expected Investors consider the rent per square meter, whereas tenants focus on the total rent per month. For rental housing, investors are experiencing that family homes with a monthly rent of over DKK 15,500 plus consumption are difficult to let. New rental housing properties have seen a large increase in rental levels over the past few years, driven primarily by high

20 // RED - Danish Investment Update Q1 2019

seneste par år, primært drevet af en stor efterspørgsel. I visse nye projekter er der derfor estimeret med en højere leje, end de boligsøgende er villige til at betale. I takt med et øget udbud af nye lejligheder. både i København og omegnskommunerne, vil udbuddet nærme sig efterspørgslen, hvilket forventeligt vil medføre, at nuværende lejepriser stagnerer. I de boligområder i København, hvor der pt. opføres rigtig mange lejligheder, som eksempelvis i Ørestad og Sydhavnen, forventes et lejepres i 2019. Idet det vurderes, at folk finder det mere attraktivt at bosætte sig i København frem for omegnskommunerne, vil investorerne dog forholdsvist let kunne få udlejet ledige boliger ved en moderat tilpasning af lejen.

demand. Therefore, for some new projects, the rent has been estimated at a higher level than the homeowners are actually willing to pay. Along with increased supply of new flats, in Copenhagen as well as the surrounding municipalities, supply will approach demand, which is expected to result in stagnation of current rental prices. In the residential areas in Copenhagen, where at present many flats, such as in Ørestad and Sydhavnen, are expected to be let in 2019. However, as it is estimated that people find it more attractive to settle and live in Copenhagen rather than the surrounding municipalities, investors will be able to let vacant housing relatively easily by implementing a moderate rent adjustment.

Investment market u Occupier market  Transactions u

3 9 5 8

Residential - Prime market rent Q1 2019 Subarea

Rent level DKK

Copenhagen City

2,000 - 2,200

Copenhagen E, W & N

1,700 - 1,900

Copenhagen NW

1,500 - 1,700

Copenhagen S

1,700 - 1,900

Frederiksberg

1,900 - 2,100

North Harbour

1,900 - 2,100

South Harbour

1,600 - 1,800

Valby

1,600 - 1,800

Vanløse

1,500 - 1,700

Source: C&W | RED

BOLIG - TRANSAKTIONER RESIDENTIAL - TRANSACTIONS Figure 19: Residental transactions Q1 2019 Size (sqm)

Price (DKK M)

13,216

365

Europe Capital

9,100

359

Patrizia

Arkitekt Gruppen

8,640

348

Jan

Heimstaden

Bach gruppen

7,900

336

Rødovre

Feb

Axa

Omnia Invest

7,207

246

Viborg Baneby

Viborg

Jan

PFA Ejendomme A/S

Ejegod Ejendomme

11,000

240

Strandvejen 272a-278b

Charlottenlund

Mar

Thylander gruppen

Private investor

12,919

230

Ved Stadsgraven 15

Copenhagen S

Feb

DIS

Gefion Group

4,165

190

Residental Portfolio Blackstone

Copenhagen

Mar

Blackstone

Jiffy capital ltd.

4,310

156

Roskildevej 160D

Frederikssund

Mar

Housing cooperative

Bovieran AB

6,300

143

Street name

Location

Date

Buyer name

Vendor name

Kastelsvej 18 and Finsensvej 43

Copenhagen E

Jan

Heimstaden

Pensionskassen For Børne- og Ungdomspædagoger

GKL4

Valby

Feb

Aberdeen Standard Investments

Amager Strandvej 130

Copenhagen S

Jan

Bryggens Bastion

Copenhagen S

Irmavej 20-32

Source: C&W | RED

22 // RED - Danish Investment Update Q1 2019

Investment market u Occupier market u Transactions 

RETAIL Investeringsmarkedet // Investment market ��26 Lejemarkedet // Occupier market ��28 Strøgtælling // Footfall analysis �� 30 Transaktioner og udlejninger // Transactions and key figures ��32

RETAIL - INVESTERINGSMARKEDET RETAIL - INVESTMENT MARKET

Retailvolumen fastholder niveauet Retail maintain transaction levels Der blev i første kvartal 2019 handlet retailejendomme for 0,8 mia. kr., svarende til et fald i aktiviteten på 43% i forhold til første kvartal 2018 ( figur 20). Tyske Aachener Grundvermögens køb af Købmagergade 45-47 for kr. 565 mio. repræsenterede dog knap halvdelen af volumen i første kvartal 2018. Sorteres denne handel fra, holder transaktionsvolumen i første kvartal 2019 samme niveau som første kvartal 2018. Retail overhalet af industri & logistik i dette kvartal Retail stod i første kvartal 2019 for 9% af transaktionsvolumen og er dermed det fjerdestørste segment i dette kvartal, overhalet af

In Q1 2019, retail transaction volumes reached DKK 0,8 bn, corresponding to a 43% decrease in activity, compared to Q1 2018 ( figure 20). German Aachener Grundvermögen’s acquisition of Købmagergade 45-47 at DKK 565 m. however, represented almost half of the volume in Q1 2018. Disregarding this transaction, the Q1 2019 volume maintains the same level as Q1 2018. Retail overtaken by industrial & logistics this quarter In Q1 2019, retail accounted for 9% of the transaction volume and is thus the fourth largest segment in this quarter, overtaken by the industrial & logistics segment. In Q1 2019, the transactions were distributed fairly evenly across the country

industri- & logistiksegmentet. Transaktionerne er i første kvartal 2019 distribueret forholdsvist ligeligt over hele landet med København og Aalborg som de største markeder. Dog skal det bemærkes, at markedet for retailejendomme generelt er præget af færre og mindre handler end eksempelvis boligmarkedet, hvilket betyder, at KFI Erhvervsdrivendes Fonds køb af Meny-ejendommen på Otto Mønsteds vej 1 i Aalborg for kr. 103 mio. er kvartalets største handel og præger denne statistik betydeligt.

2019 og stod således for hele 74% mod 35% i første kvartal 2018 ( figur 21). Første års afkast på retailejendomme, som har ligget på 3,00% på prime high street siden 2016 ( figur 22), ventes at være stigende og i løbet af 2019 ligge 20-30 basispoint over de laveste niveauer vi har set i 2017 og 2018.

Mere aktive danske investorer Som det var tilfældet på kontormarkedet, var de danske investorer mere aktive i første kvartal

with Copenhagen and Aalborg as the largest markets. However, it must be kept in mind that the retail market is generally characterised by fewer and smaller transactions than, for example, the residential market, which means that KFI Erhvervsdrivendes Fund's purchase of the Meny property at Otto Mønsteds Veg 1 in Aalborg at DKK 103 m is the largest transaction of the quarter and significantly influences these statistics. More active Danish investors As was the case in the office market, Danish investors were more active in Q1 2019 and accounted for 74% against 35% in Q1 2018 ( figure 21).

26 // RED - Danish Investment Update Q1 2019

The initial yield on retail property, which has rested at 3,00% on prime high street since 2016 ( figure 22), is expected to be rising and during 2019 reach levels at 20-30 percentage points above the lowest levels from 2017 and 2018.

Investment market  Occupier market u Footfall analysis u Transactions and leases u

Figure 20: Transaction volume and geographic break down

Triangle Region 5%

Copenhagen 26%

0.8

Other Zealand and Funen 22%

Greater Copenhagen 4%

BN DKK

Other Zealand 11%

Aalborg 20% Estimates of smaller transactions below DKK 35 m are weighted evenly on all segments. Source: C&W | RED

Figure 21: Danish and foreign investors

Figure 22: Prime yields Q2 2019 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%

Source: C&W | RED

26%

74%

Foreign

Danish

Source: C&W | RED

RETAIL - LEJEMARKEDET RETAIL - OCCUPIER MARKET

Varierende tomgang på Københavns strøggader Varied vacancy levels for Copenhagen high streets Generelt ser vi store variationer i lejeefterspørgsel omkring Strøget. Nogle dele af Strøget oplever stigende tomgang, mens andre oplever stærk lejeefterspørgsel og lav tomgang ( figur 24). Tomgangsprocenten er et udtryk for den observerede tomgang i strøgejendommenes stueetage, hvilke normalvis betragtes som absolutte butiksarealer. Den lave udlejningsaktivitet fra Gammeltorv til Rådhuspladsen fortsætter, og tomgangen for dette område er steget siden 1. kvartal 2016. Det er endnu ikke kendt, hvilken form for indflydelse åbningen af den nye Metro Cityring i 2019 vil have på

området. I 2018 så vi en stigning i lejeniveauet, der især er koncentreret omkring de primære dele af Strøget. Endvidere har Købmagergade oplevet en højere stigning i forhold til Strøget i løbet af de seneste år.

In general, we see large variations in occupier demand for Copenhagen high streets. Some parts of Strøget are experiencing rising vacancy while others experience strong occupier demand and low vacancy levels ( figure 24). The vacancy rate is an expression of observed vacancy in the ground floor of the buildings, which are normally regarded as pure store areas. The low leasing activity from Gammeltorv to City Hall Square continues as vacancy in this area has been rising since Q1 2016. It is yet uncertain which impact the opening of the new Metro City line in 2019 will have on the area. In 2018, we saw an increase in the rent

level, which is mainly concentrated around the primary parts of Strøget. In addition to this, Købmagergade has seen a higher increase compared to Strøget in recent years.

Udlejninger og åbninger I første kvartal 2019 har Gina Tricot lejet 811 m² på Amagertorv 19, hvor Lilly tidligere havde sin flagskibsbutik. Det danske brand Samsøe & Samsøe har lejet 538 m² på Købmagergade 48, hvor de i marts slog dørene op for en ny butik med et helt nyt koncept, hvor både

Lettings and openings in the first quarter of 2019, Gina Tricot has rented 811 sq m on Amagertorv 19, where Lilly previously had her flagship store. The Danish brand Samsøe & Samsøe has rented 538 sq m at Købmagergade 48, where in March they opened a new store with a completely new concept, where both the physical framework and the selection of brands have been upgraded.

28 // RED - Danish Investment Update Q1 2019

de fysiske rammer og udvalget af brands er opgraderet. I starten af april åbnede den japanske tøjkæde Uniqlo sin længe ventede første butik i Danmark – ca. 1.400 m² på Vimmelskaftet – som de underskrev lejekontrakt på i andet kvartal 2018 og siden har indrettet til brandets koncept. Ligeledes i starten af april åbnede det danske sneakerbrand ARKK Copenhagen en pop-up butik på Østergade i København, som skal supplere den faste butik på Nørrebro i et halvt år.

In early April, the Japanese clothing chain Uniqlo opened its long-awaited first store in Denmark - approximately 1,400 sq m at Vimmelskaftet – on which they signed lease contracts in the second quarter of 2018 and since then have fitted for the brand's concept. Also in early April, Danish sneaker brand ARKK Copenhagen opened a pop-up store at Østergade in Copenhagen, which will supplement the permanent store in Nørrebro for six months.

Investment market u Occupier market  Footfall analysis u Transactions and leases u

Figure 23: Vacancy rates and consumer confidence

5,0%

4,5% 4,0%

3,5% 3,0%

2,5% 2,0%

1,5% 1,0%

-5

0,5%

Vacancy rate Copenhagen City

Vacancy rate Copenhagen Area

Q1 2019

Q4 2018

Q3 2018

Q2 2018

Q1 2018

Q4 2017

Q3 2017

Q2 2017

Q1 2017

Q4 2016

Q3 2016

Q2 2016

Q1 2016

Q4 2015

Q3 2015

Q2 2015

Q1 2015

Q4 2014

Q3 2014

Q2 2014

Q1 2014

Q4 2013

Q3 2013

Q2 2013

Q1 2013

Q4 2012

Q3 2012

Q2 2012

-10 Q1 2012

0,0%

Consumer Confidence

Source: C&W | RED

Figure 24: Prime rent and vacancy – Zone A Street name

Rent level - Zone A (DKK)

Vacancy

Amagertorv

33,000

8.8%

Østergade

30,000

2.1%

Købmagergade

26,000

7.4%

Vimmelskaftet

22,000

17.8%

Nygade

22,000

10.4%

Frederiksberggade

18,000

19.9%

Frederiksborggade

18,000

6.3%

Kronprinsensgade

11,000

N/A

Berlingske

9,000

N/A

Grønnegade

8,000

N/A

Østerbrogade

5,000

N/A

Gammel Kongevej

4,000

N/A

Nørrebrogade

4,000

N/A

Lyngby

8,500

N/A

Source: C&W | RED

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 - STRØGTÆLLING RETAIL - FOOTFALL ANALYSIS

FREDERIKSBORGGADE/KØBMAGERGADE

KULTORVET

RUNDETÅRN

PILESTRÆDE/KRONPRINSENSGADE

KØBMAGERGADE/LØVSTRÆDE

KØBMAGERGADE/KRONPRINSENSGADE

KØBMAGERGADE/SILKEGADE

AMAGERTORV

VIMMELSKAFTET/AMAGER TORV

NYGADE GAMMELTORV

FREDERIKSBERGGADE

30 // RED - Danish Investment Update Q1 2019

2019 opening

Investment market u Occupier market u Footfall analysis  Transactions and leases u

Kronprinsensgade-effekten På trods af stigende konkurrence fra online-salg samt fortsat omfattende anlægsbyggeri i indre by, som forstyrrer trafikken, oplevede Københavns strøggader et fortsat stærkt footfall i 2018. Alle områder omkring Amagertorv og Købmagergade oplevede i 2018 et footfall på ca. 5.000 forbipasserende pr. time, hvilket er med til at

The effect of Kronprinsensgade Despite growing competition from online sales and ongoing extensive construction in central Copenhagen disrupting traffic, Copenhagen’s high streets experienced a continued strong footfall in 2018.

In 2018, all areas surrounding Amagertorv and Købmagergade experienced a footfall of approx. 5,000 passengers per hour, which has

gøre disse gader til nogle af de mest interessante retail-lokationer i Danmark ( figur 25). En overraskende tendens er dog det meget stærke footfall, der ses på hjørnet af Købmagergade og Kronprinsensgade (tællepunkt 8) med hele 6.200 forbipasserende i gennemsnit pr. time, hvilket er mere end 20% højere end de nærliggende tællepunkter på Købmagergade (tællepunkt 6 og 9). Årsagen til dette skal findes i den trafik, som skabes via Kronprinsens-

gade og Pilestræde (tællepunkt 10), der med knap 3.200 forbipasserende i timen har et - for en sidegade - meget høj flow. Dette vidner dels om attraktiviteten af Købmagergade omkring den nyudviklede ”Postgården” mv., men vidner ligeledes om attraktiviteten af sidegaderne i området, særligt båret af Kronprinsensgade, men også af Berlingske-Karréen, Galleri K mv., som i de senere år har skabt et stærkt alternativ til high street retail-beliggenhederne.

a significant effect in rendering these streets some of the most interesting retail locations in Denmark ( figure 25). One surprising trend, however, is the strong footfall on the corner of Købmagergade and Kronprisensgade (count 8) with an average 6,200 passing by per hour, which is more than 20% higher than the nearby counts on Købmagergade (count 6 and 9). This is based on the high traffic in Kronprinsensgade and Pilestræde (count 10), which

with just below 3,200 passing by per hour has a distinctly high flow for a side street. This demonstrates the attractiveness of Købmagergade around the newly developed “Postgården” etc., but also shows the attractiveness of the side streets, particularly by Kronprinsensgade, but also by the Berlingske block, Galleri K etc., which in recent years have become strong alternatives to high street retail locations.

ØSTERGADE

Figure 25: A verage footfall counts per hour 2018

Methodology

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

5,315

5,416

4,886

5,036

5,253

4,833

5,740

6,198

4,960 3,179

Source: C&W | RED

RETAIL - TRANSAKTIONER OG UDLEJNINGER RETAIL - OCCUPIER MARKET

Figure 26: Retail transactions Q1 2019 Street name

Location

Date

Buyer name

Vendor name

Size (sqm)

Price (DKK M)

Otto Mønsteds Vej 1

Aalborg SW

Feb

KFI Erhvervsdrivende fond

Private investor

6,444

103

City 3

Slagelse

Feb

Private Investor

Private investor

7,333

Vonsildvej 1

Kolding

Mar

Jysk Holding A/S

Private investor

4,680

Butikscentret Hasseris Bymidte

Aalborg

Mar

Private Investor

DNP Ejendomme

3,314

Lille Østergade 5

Holstebro

Feb

Fritz Henrik Schur

Private investor

6,387

Source: C&W | RED

32 // RED - Danish Investment Update Q1 2019

Investment market u Occupier market u Footfall analysis u Transactions and leases 

Figure 27: Significant retail leases Q1 2019 Street name

Location

Date

New Tenant

Size (sqm)

Købmagergade 48

Copenhagen City

2019/Q1

Samsøe & Samsøe

538

Østergade 12

Copenhagen City

2019/Q1

Diesel

N/A

Amagertorv 19

Copenhagen City

2019/Q1

Gina Tricot

811

Kronprinsensgade 7

Copenhagen City

2019/Q1

A Days March

Kronprinsensgade 16

Copenhagen City

2019/Q1

Yellow Korner

Source: C&W | RED

INDUSTRI & LOGISTIK // INDUSTRIAL AND LOGISTICS Investeringsmarkedet // Investment market ��36 Transaktioner // Transactions ��38

INDUSTRI & LOGISTIK - INVESTERINGSMARKEDET INDUSTRIAL & LOGISTICS - INVESTMENT MARKET

Industri & logistik indtager tredjepladsen trods fald i volumen Industrial & Logistics takes third place in spite of lower volumes Industri- og logistiksegmentet nåede i første kvartal 2019 en transaktionsvolumen på 1,1 mia. kr., hvilket er et fald på 21% fra de 1,4 mia. kr., der blev handlet for i første kvartal 2018 ( figur 28). På trods af dette har industri & logistik overhalet retail og er i første kvartal det tredjestørste segment, målt på transaktionsvolumen, med en andel af den samlede danske transaktionsvolumen på 13%. Storkøbenhavn dominerer et marked af mindre handler Storkøbenhavn er det største marked og repræsenterer 44% af transaktionsvolumen, mens

The industrial and logistics segment reached a transaction volume of DKK 1.1 bn in Q1 2019, which is a decrease of 21% from the DKK 1.4 bn traded for in Q1 2018 ( figure 28). Despite this, industrial & logistics has overtaken retail as the third largest segment in Q1 2019, measured in transaction volume, with a share of the total Danish transaction volume of 13%. Greater Copenhagen dominates market of smaller transactions Greater Copenhagen is the largest market representing 44% of transaction volume, while

Jylland (uden Aarhus) står for 34% af transaktionsvolumen ( figur 28). Dog skal det holdes in mente, at markedet generelt er præget af færre og mindre handler end eksempelvis boligmarkedet, hvilket betyder, at der i første kvartal 2019 kun er registreret to egentlige Capital Markets handler, som er engelske M7’s køb af en landsdækkende portefølje af Niam for 358 mio. kr. og Niams køb af produktionsejendommen Fabriksvej 13 i Hurup Thy for 112 mio. kr.

første kvartal 2018 ( figur 29), stærkt drevet af M7’s porteføljekøb. Første års afkast på industri- og logistikejendomme ligger i Storkøbenhavn på 5,75% og i Trekantsområdet på 6,00% og i Aarhus 6,25% ( figur 30). Grundet stigende efterspørgsel forventer vi, at afkastene vil være stabile til faldende i løbet af 2019.

Mere aktivitet fra de udenlandske investorer De udenlandske investorer var mere aktive i første kvartal 2019 og stod for 63% mod 54% i

Jutland (without Aarhus) accounts for 34% of the transaction volume ( figure 28). However, it must be kept in mind that the market is generally characterised by fewer and smaller transactions than, for example, the residential market, which means that in the first quarter of 2019 only two actual Capital Markets transactions have been registered, which are English M7's acquisition of a nationwide portfolio from NIAM at a value of DKK 358 m and NIAM's acquisition of the production facilities at Fabriksvej 13 in Hurup Thy at DKK 112 m.

36 // RED - Danish Investment Update Q1 2019

More activity from foreign investors Foreign investors were more active in Q1 2019 and accounted for 63% against 54% in Q1 2018 ( figure 29), heavily driven by M7's portfolio acquisition.

The initial yield on industrial & logistics properties sits at 5.75% in Copenhagen, 6.00% in the Triangle Area and 6,25% in Aarhus ( figure 30). Due to increasing demand, we expect yields to be stable and possibly slightly decreasing in 2019.

Investment market  Transactions u

Figure 28: Transaction volume and geographic break down

Other Jutland

1.1

34%

Greater Copenhagen 44%

BN DKK

Aalborg 5% Other Zealand

Aarhus

11%

Where it has not been possible to identify specific geographic regions, portfolios are weighted evenly on all regions.

Source: C&W | RED

Figure 29: Danish and foreign investors

Figure 30: Prime yields Q1 2019 Subarea

Yield level

Copenhagen (Copenhagen Airport airside)

5.75%

Copenhagen (Brøndby, Glostrup, Herlev & Avedøre)

6.00%

Copenhagen (Høje-Taastrup, Greve & Ishøj)

5.75%

Køge (Scandinavian Transport Centre)

5.75%

Odense

6.75%

Triangle Area (Kolding, Vejle & Fredericia)

6.00%

Aarhus

6.25%

Source: C&W | RED

63%

37%

Foreign

Danish

Source: C&W | RED

INDUSTRI & LOGISTIK - TRANSAKTIONER INDUSTRIAL & LOGISTICS - TRANSACTIONS

Figure 31: Industrial & logistics transactions Q1 2019 Size (sqm)

Price (DKK M)

80,5044

421

Nagel Danmark

31,598

163

NIAM

Private investor

33,744

112

Feb

NREP

Private investor

17,159

Feb

Olav De Linde

Postnord

10,218

Street name

Location

Date

Buyer name

Vendor name

Portfolio of 16 logistic properties

Denmark

Feb

M7 Real Estate

NIAM

Portfolio of 5 properties

Jutland

Mar

Tristan Capital

Fabriksvej 13

Hurup Thy

Mar

Kornmarksvej 15

BrÃ¸ndby

Ankersgade 12

Aarhus

Source: C&W | RED

TRY OUR DYNAMIC ANALYSIS TOOL AT CW-RED.DK Throughout the years, Cushman & Wakefield | RED has worked structuredly and intensely to increase the transparency on the Danish commercial real estate market. To this end, we have introduced a dynamic research tool on our website that allows you to perform your own analyses by mplementing our underlying market data. Enjoy!

38 // RED - Danish Investment Update Q1 2019

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