Transaction volume in Q1 2025 reached DKK 13.8 billion, representing an increase of 54% – or DKK 4.9 billion – compared to the same quarter in 2024. The significant growth is primarily driven by several large portfolio transactions, which are also linked to a significantly lower interest rate environment.
Residential rental properties were by far the largest segment in terms of transaction volume, accounting for over 40% of the total. Newer residential assets with market-level rents were particularly sought after.
Hotels ranked as the second-largest segment, representing just over a quarter of the total volume – an unusually high share for what is typically a niche segment. This is largely due to Capman’s acquisition of Midstar Fastigheter, in which the value of the Danish hotels is estimated at DKK 3.5 billion, making it the largest transaction year-to-date.
The Danish economy remains strong compared to neighboring countries – not solely due to the pharmaceutical industry. There are, however, notable areas of low growth. Consumers drew on their savings during the period of high inflation and are now hesitant to convert wage increases into higher spending, although this is expected to pick up in 2025. Exports and industrial production are rising sharply, driven by pharmaceuticals and medical equipment, along with a few other sectors. Nonetheless, there is considerable uncertainty surrounding the global economy, particularly due to frequent changes in U.S. tariff policies.
Yield requirements are currently moving mostly sideways, and forecasts suggest that levels will remain broadly unchanged over the next 12 months. However, expectations have become slightly more optimistic compared to the previous quarter, especially for prime locations.
Annual GDP growth
The Danish economy
The Danish economy is considered to be in a neutral business cycle situation following a prolonged period of high employment. However, labor market pressure is beginning to ease, and employment is expected to develop relatively weakly in 2025 and 2026. The Gross Domestic Product (GDP) increased by 1.6% in the fourth quarter of 2024 when adjusted for price developments and seasonal fluctuations.
Economic growth in recent years has primarily been driven by advances in the industrial sector, with the pharmaceutical industry playing a significant role. At the same time, growth in Danish export markets and improvements in household purchasing power have led to signs of mild progress in several parts of the economy.
According to the latest revised figures from the Central Bank of Denmark, GDP is expected to grow by 3.6% in 2025 and 2.3% in 2026. In comparison, the government’s economic report from December 2024 forecasts GDP growth of 2.9% in 2025 and 1.7% in 2026
The outlook for more moderate growth in 2026 is due to an expected decline in capacity pressure, as measured by the output gap, and reduced labor market strain. According to the Central Bank, the coming period is expected to bring lower wage increases and stable inflation.
Source: Statistics Demark and The Central Bank of Denmark
The lower inflation rate and an increasing expectation—both in the markets and in central banks’ own forecasts—that inflation will return to a level close to the inflation target of around 2% have led both the ECB and the U.S. Federal Reserve (Fed) to ease monetary policy. Most recently, in March, the ECB lowered its interest rate by 0.25 percentage points to 2.5%. Since June 2024, the ECB has reduced rates by a total of 1.5 percentage points, and the Danish Central Bank has followed suit with corresponding rate cuts.
In week 13 of 2025, the long-term mortgage rate stood at 4.34%, while the short-term rate, which is more closely correlated with monetary policy actions from the Fed and the ECB, was at 2.07%. This demonstrates how monetary policy rate cuts—and, perhaps more importantly, expectations of further cuts—have resulted in declining market interest rates. The forecast from the Economic Councils’ report from October 2024 predicts that the 30-year Danish mortgage rate will remain at 4.3% for both 2024 and 2025 and rise slightly to 4.4% by 2030.
Source: Finance Denmark and Statistics Denmark
The consumer confidence indicator, which reflects the population’s perception of the current and future economic situation, stands at minus 15.5 in March. This represents a slight decline compared to last month, when it was minus 14.5, marking the lowest level since May 2023. The decline in March is due to a drop in 4 out of the 5 indicators that make up consumer confidence.
This shows that despite low inflation, rising real wages, and a strong labor market, Danish consumers still struggle to find optimism regarding their personal and the country’s economic outlook. However, consumer confidence has generally been on an upward trend since October 2022, when it reached minus 37—the lowest level in the 48-year history of the statistic.
The continued negative consumer confidence is primarily due to high interest rates, which have reduced Danes’ disposable incomes in recent years, as well as rising prices on everyday goods. Additionally, current political tensions and general uncertainty in the global economy are also assessed to have a negative impact on consumer confidence.
Source: Statistics Denmark
The labour market has seen significant progress in recent years. Employment has increased by 239,000 individuals from the end of 2019 to the fourth quarter of 2024. The most recent data from Statistics Denmark indicates that the number of wage earners rose by 5,500 in January 2025. This means that 3,045,400 people held wage-earning jobs in January 2025— an increase of 36,700 compared to January 2024, equivalent to a rise of 1.2%. Employment thus remains at a historically high level and continues to exceed the structural level.
The Economic Survey anticipates higher wages and weaker productivity growth, which is expected to dampen labour demand and lead to a slight decline in employment over the coming years. The Danish National Bank forecasts a continued increase in employment, projecting 35,000 more employed persons by the end of 2027 compared to January 2025. This expected trend is primarily driven by increased domestic activity and a reduction in labour market pressures.
Between January and February, the unemployment indicator showed an increase of 500 individuals. The unemployment rate remains low at 2.9% of the labour force, corresponding to 87,600 unemployed persons in February.
Source: Statistics Denmark and the Central Bank of Denmark
Yield in percent and trends for the next 12 months
Trends in residential rental properties
Expected stability and increased activity in the housing market
In 2024, the transaction volume for residential rental properties reached approximately DKK 26 billion, with December seeing several major deals, including Rødovre Port, A-huset, and a market-rent portfolio in Greater Copenhagen. The ten largest transactions in December accounted for about 28% of the total volume for 2024.
Institutional investors have become more active, and yield requirements appear to have stabilized. Further interest rate declines may stimulate additional market activity.
Investor demand is primarily focused on newer, unregulated residential stock, as high interest rates make it challenging to finance older properties with redevelopment potential. Construction activity has declined in recent years due to rising interest rates and uncertainty surrounding the profitability of new projects. This has reduced the risk of
oversupply in the rental market, which was a key concern in certain areas prior to the recent inflation and rate increases.
New property taxes have created uncertainty in property valuations, but a cap on annual increases means the effects of rising land values will be phased in gradually.
The combination of high interest rates and increasing property taxes strengthens the incentive to rent rather than own—particularly in the largest cities. Together with reduced construction activity, this puts upward pressure on the rental market, where rental levels are expected to rise in several areas. Vacancy rates have dropped by 0.8 percentage points over the past year to 3.4%, with the lowest levels in Copenhagen, outer Copenhagen, and North Zealand, and the highest in Central Jutland and Aalborg. Market rents are expected to remain stable or increase slightly in 2025, while yields are expected to remain steady.
Falster and Møn
Trends in Office Properties
Stable demand for modern office solutions
The office market experienced a decline in 2024, with a total transaction volume of DKK 7.3 billion. The largest deal of the year was Heartland’s acquisition of the Navitas property in Aarhus for over DKK 700 million.
Demand for attractive office spaces remains, but the market is primarily driven by Danish investors, as international investors are adopting a more cautious approach to the segment. The Danish office market, however, differs from international trends with record-high employment and limited remote working, which is partly due to shorter commuting times. Some companies have underestimated their employees’ desire for physical presence and now find
Available office space as a percentage of building stock
their office capacity insufficient. Meanwhile, other companies have tightened remote working policies and imposed restrictions.
Many companies are seeking flexible office concepts such as serviced offices and office hotels, offering scalability and additional amenities. In Copenhagen, supply is plentiful, while Aarhus faces limited capacity despite high demand.
Sustainability is playing an increasingly important role for both tenants and investors, driven by ESG requirements and upcoming regulations. Properties with high carbon emission may lose value, while certified and energy-efficient properties are expected to perform better.
Source: Ejendomstorvet-ED Statistikken, estimates as of Q2 2025
Sønderborg
Trends in Retail Properties
Growth in retail despite marked uncertainty
Retail experienced solid growth throughout 2024, with the volume index rising by 2.1 percentage points between December 2023 and December 2024. This contributed to the value index increasing by 3.2 percentage points over the same period. As a result, retail continued its positive trend for the second consecutive year, largely supported by growth in real wages. The progress in retail can primarily be attributed to a continuous increase in the sales of other consumer goods, which includes sales of household and leisure equipment, and to a lesser extent, clothing. In contrast, the sales of food and other everyday goods remained relatively stable, with a slight overall decline, with only the value index continuing to rise, driven by increasing prices.
Private consumption is expected to continue rising in 2025, supported by a strong labor market and controlled inflation. However, there are risk factors, such as a potential trade war with the US, which could hinder growth and cost Danish jobs, with consequences for the retail sector.
Transactional activity in the retail sector was generally weak in 2024, though it ended strong, marked by the sale of a portfolio of retail properties across the country for approximately DKK 900 million. 2024 was also characterized
by increased transaction activity on Copenhagen’s pedestrian streets, with several properties being sold, including Bucherer’s purchase of Østergade 22 at a record-high price per square meter.
On the leasing front, 2024 concluded with a few busy months in the capital, while the trend was more fragmented nationally. It is particularly the more decentralized locations that have struggled, while the larger main shopping streets in major cities have performed somewhat better.
Demand for particularly grocery store portfolios with geographical spread remains solid. This can be attributed to the attractive risk profile, where grocery chains enter lease contracts with long periods of non-termination, as a good location is critical for business. These factors lead grocery stores to often be surprisingly highly priced compared to the broader market.
Vacancy rates in retail properties have risen slightly nationwide, increasing by 0.2 percentage points between Q1 2024 and Q1 2025 to 3.3%. Yield requirements are considered stable, supported by expectations of continued interest rate reductions, while there is some risk of declining market rents in certain areas.
Source: Ejendomstorvet-ED Statistikken, estimates as of Q2 2025
Lolland, Falster and Møn
Trends in Industrial Properties
The industrial and logistics segment is defined by high demand and a growing focus on sustainability The logistics segment continued to experience strong demand in 2024, with a transaction volume exceeding DKK 13 billion. Warehousing and logistics properties near major cities were particularly sought after. The largest deal was DSV’s sale of Denmark’s largest logistics center in Horsens for approximately DKK 3.3 billion, accounting for 25% of the total logistics and warehouse transaction volume for the year.
Demand is highest for modern logistics properties located near key infrastructure. Light industrial facilities are also in high demand, as many business areas in the largest cities are being converted into residential developments.
Sustainability is a key focus, especially for certified and energy-efficient properties. DSV’s logistics center in Horsens serves as an example featuring solar panels, battery technology, and geothermal heating.
Sale-and-leaseback agreements with long lease terms remain popular, with tenant creditworthiness and non-termination periods being critical for liquidity, while location plays a relatively lesser role.
It is becoming increasingly difficult to secure land for logistics developments in prime areas, although in the short term, there is an oversupply in the Triangle Region and the southwestern logistics corridor near Copenhagen, which is increasing vacancy rates. This may put downward pressure on rents in the short to medium term, although long-term prospects remain positive.
Available industrial space as a percentage of building stock
Definitions
Location and condition
Yield and rent levels estimates are based on primary, secondary and tertiary categories, where primary is the best and tertiary is the worst. Various variables for each property type have been taken into consideration with regards to determine the facility classes, such as: size, floor plan structure, year of construction, lifts, climate control, cabling infrastructure, staff facilities, customer facilities, parking facilities, building energy rating, ceiling height, general accessibility, general condition of the property, etc.
Primary: A property with prime location and class A facilities has the best possible location in an area, the highest standard when it comes to facilities, is modern and ready to move into. This type of property will typically be sold at the lowest yield in the area, have the highest market rent and have a short reletting process.
Secondary: Average in terms of location and condition. Yield and rent levels also reflect the average levels for the area. The re-rental options are market compliant and reflect the general market conditions.
Tertiary: Poor location for the area, low standard, and outdated. This type of property is expected to be able to be sold at a relatively high yield level, and the rent level is low for the defined area. Similarly, vacancy rates can be expected to be higher than the market average.
Yield
All yields are initial net yields and are defined as the annualized rent generated by the property after the deduction of estimated annual irrecoverable property outgoings, expressed as a percentage of the property valuation (property valuation is adjusted for the value of rental deposits and prepaid rent). For comparison purposes, it is assumed that all properties are fully let at market-conform conditions.
Market Rent
All rents are headline rents, in other words, the contracted gross rent receivable, which becomes payable after any tenant incentives have expired. Market rent estimates are expressed in DKK/sq m/year. It is assumed that all properties are let at market-conform conditions.
* Area specifications
Copenhagen City = Copenhagen K ex. harbour areas.
Østerbro, Frederiksberg og Gentofte = Østerbro, Frederiksberg and Gentofte municipalities.
Harbour area (Nordhavn, Kalvebod Brygge & Tuborg Havn) = Areas located along Copenhagen’s harbour.
Remaining Copenhagen = Vesterbro, Nørrebro, Nordvest, Valby, Sydhavn (ex. harbour areas), Brønshøj, Husum, Vanløse, København S (ex. Ørestad and harbour areas), Kastrup and Dragør municipalities.
Western suburbs = Hvidovre, Rødovre, Glostrup, Brøndby, Albertslund, Vallensbæk, Ishøj, Høje Taastrup, Ballerup and Herlev municipalities. Northern suburbs = Lyngby, Holte, Farum, Birkerød, Gladsaxe, Rudersdal and Furesø municipalities.
Residential rental properties
1) Newer residential rental properties are properties that have been occupied after 31.12.1991 and thus covered by the rules on free/market rent according to the Danish Residential Rent Regulation Act section 54 (1, 1).
2) Cost determined rental properties are older residential rental properties that have been occupied before 31.12.1991 and are regulated in accordance with the provisions of the Danish Residential Rent Regulation Act on cost-determined rent.
3) Fully developed older residential rental properties are older home rental properties without further potential for rent increases through modernization pursuant to section 19 (2) of the Danish Residential Rent Regulation Act.
Data for available commercial premises
The source of available commercial premises is the latest available supply statistics from Ejendomstorvet. Further information about these statistics can be found at ejendomstorvet.dk/statistik/udbudsstatistik.
Trends
All trends reflect our expectations to the level in 12 months time.
The figure is expected to increase
The figure is expected to remain unchanged
The figure is expected to decrease
Note on estimates
The valuation of a property depends on many specific factors, including conditions of the lease, the tenant, and the property condition. The estimates cannot be used uncritically in the valuation of one specific property but can serve as input related to the valuation. Reproduction or citation only with acknowledgment of source. While every effort has been made to ensure that the information provided is accurate, EDC International Poul Erik accepts no liability for errors.
North Zealand = Gribskov, Helsingør, Allerød, Hillerød, Egedal, Fredensborg, Halsnæs and Hørsholm municipalities.
East Zealand = Greve, Køge, Lejre, Roskilde and Solrød municipalities.
West Zealand = Holbæk, Kalundborg, Odsherred, Ringsted, Slagelse and Sorø municipalities.
South Zealand = Faxe, Næstved, Stevns and Vordingborg municipalities. Lolland, Falster and Møn = Guldborgsund and Lolland municipalities.
Other Funen = All municipalities at Funen ex. Odense.
Other South Jutland = Billund, Fanø, Haderslev, Tønder, Varde, Vejen and Aabenraa municipalities.
West Jutland = Skive, Struer, Holstebro, Thisted, Morsø and Ringkøbing-Skjern municipalities.
As an investor, it is crucial to approach an investment objectively. With analyses from EDC Poul Erik Bech, we provide you with the opportunity to do just that by ensuring that your investment is based on a solid data foundation. EDC Poul Erik Bech Research offers area-specific analyses for the entire country that can be tailored to your specific needs. Additionally, we provide in-depth analyses of population trends, housing supply, transaction volume, and more, which can help you as an investor to make the right decisions based on a solid knowledge foundation.
If you have questions, you are more than welcome to contact us:
Joseph Alberti Head of Research
joal@edc.dk +45 5858 7467
Niclas Holm
niho@edc.dk +45 5858 8784
CONTACT
EDC Poul Erik Bech
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