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CB RICHARD ELLIS

MarketView Copenhagen Office Q3 2011

www.cbre.eu/research

OVERVIEW Vacancy rate (% of stock)

Quick Stats - Copenhagen Office Change from Q1 2011

Q2 2010

• Economic setback seen to be temporary After surprisingly strong growth in GDP in Q2, most economic indicators now point at a weak Q3 in the wake of the international economic and financial turmoil.

12% 10% 8% 6% 4%

Vacancy rate

2%

• Vacancy rate at 8.6% The office vacancy rate in Copenhagen city rose to 8.6% in Q2 Q 2011, thus interrupting the downward trend seen since mid-2010.

Rents Investment Yields

Hot Topics • Direction of the economy is uncertain • Downward trend in vacancies interrupted

• Limited office construction There were no major completions or starts of new office buildings in Q2, and construction activity remains limited. Most offices under construction are either domiciles for own-occupation own or pre-let buildings. Speculative development is almost non-existent. However, there are several projects ready to be activated.

• Recovery has not reached secondary market • Investors target prime office…. • … and yields sharpened a bit

2006

2007

2008

2009

2010

2011

Copenhagen city Source: Oline-Lokalebørs, CB Richard Ellis

Office Development (‘000 sq m) 250 Project

200

Under construction 150

Completed

100 50 0

• Office development pipeline is thin • First signs of rental growth for prime office

0% 2005

• Slightly higher rents in primary market There is growing evidence of new leases at relatively high rents, and it is our view that prime rental levels have risen slightly. There are no signs of rental growth in the secondary market yet.

2008

2009

2010

2011

2012

2013

2014

Copenhagen city + Tuborg Havn Source: CB Richard Ellis

Prime Rent (DKK/sq m/year)

Danish Economy

10Y Gov’t Bond

Q2 2011

Q3 2011

3.17%

x.xx%

Short Mort’g Bond

1.75%

x.xx%

Inflation

3.0%

2.7%

GDP Growth (q/q)

1.0%

• Investment activity rising Office investment activity reached approx. € 200 million - an increase of almost 150% compared to Q2 2010. Office remained the most attractive asset, representing 60-65 65% of property investment turnover. • Prime office yields compressed slightly Office yields have compressed slightly and are in the range of 5.00% to 5.75%.

2.000 1.900 1.800 1.700 1.600 1.500 2005

2006

2007

2008

2009

2010

2011

Copenhagen city Source: CB Richard Ellis

Office Market Indicators, Copenhagen City

Unemployment Rate 6.1%

6.1% Q3 2010

Q2 2011

Q3 2011

1,675

1,700

1.700

570

491

10.1%

8.6%

61

-44

Source: Statistics Denmark, Ass. of Danish Mortgage Banks 10Y bond is average effective yield on 10Y government bonds

Prime Net Rent (DKK/sq m/year)

Short bond is average effective yield on 1Y & 2Y mortgage bonds

Vacant space (1,000 sq m)

a

Vacancy rate (%) Net absorption (1,000 sq m) Source: CB Richard Ellis, Oline-Lokalebørs Net rent for prime office in CBD/Harbour area

©2011, CB Richard Ellis, Inc.


MarketView Copenhagen Property

COPENHAGEN SUB MARKET MAP For More information regarding the MarketView, please contact:

CBRE Research

Robin Rich Head of Research CB Richard Ellis Rued Langgaards Vej 6-8, DK-2300 Copenhagen t: +45 3544 0923 e: robin.rich@cbre.com

Dragana Marina Research Assistant COPENHAGEN CBD MAP

CB Richard Ellis Rued Langgaards Vej 6-8, DK-2300 Copenhagen t: +45 3525 5142 e: dragana.marina@cbre.com

DEFINITIONS & DESCRIPTION OF COPENHAGEN OFFICE MARKETS Copenhagen city – Urban area incl. municipalities; Copenhagen, Frederiksberg, Tårnby, Dragør Copenhagen submarkets – Significant office destinations in Copenhagen city ▪ CBD = The Central Business District is Copenhagen’s city center ▪ Havneområde Nord/City/Syd = Harbour Area North/Central/South are redeveloped port/industrial zones ▪ Ørestad = Ørestad is a new development area ▪ Brokvarterer og Frederiksberg = Østerbro, Nørrebro, Vesterbro and Frederiksberg are residential

areas with a broad mix of office and retail

Q2 2011

▪ Tuborg Havn = Located next to, but not in Copenhagen city. It is an important high-end high office destination

Disclaimer 2011 CB Richard Ellis Information herein has been obtained from sources believed to be reliable. reliable While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. completeness Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission of CB Richard Ellis.© Copyright 2010 CB Richard Ellis Page 2 ©2011, CB Richard Ellis, Inc.

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