Poul Erik Bech
Executive summary – 2nd quarter
Transaction volume in Q1 2026 reached DKK 9.3 billion, equivalent to roughly two-thirds of the level in the same period last year. A closer look at the figures points to a positive trend—particularly for small and mid-sized transactions. The number of transactions is 11% higher than in Q1 2025, while transaction volume is 13% higher for deals below DKK 500 million. This development is likely driven by recent geopolitical uncertainty and rising mortgage interest rates. However, the Danish economy remains strong, with low unemployment and continued GDP growth.
Residential rental properties remain the most sought-after segment, accounting for just over half of total transaction volume. Urbanisation, housing shortages in major cities, and a stable rental market continue to support demand. International investors accept relatively low yield requirements for modern properties with market rents in the largest cities. Demand for older housing stock is also increasing, although activity here is primarily driven by small and mid-sized investors. Mortgage lenders continue to finance quality assets—a hallmark of the Danish mortgage model, which has historically proven resilient during periods of economic headwinds.
The office market is divided. Demand remains strong for modern, energy-efficient offices with flexible layouts in central locations, particularly in Copenhagen and the largest regional cities. By contrast, older office properties with low energy efficiency and less attractive locations face rising vacancy and growing capital expenditure needs.
The retail segment remains stable in prime high streets and dominant shopping centres, while secondary retail continues to face pressure from changing consumer behaviour and the growth of online shopping. This makes active asset management essential. The industrial and logistics segment is structurally supported by e-commerce, supply chain resilience, and efficient distribution, while the hotel market has staged a strong comeback driven by robust tourism.
Strong macroeconomic fundamentals make Denmark attractive to international investors, and Copenhagen continues to rank among Europe’s leading investment cities. Overall, developments through 2025 and into 2026 point to a more balanced market, where rental growth, quality, location, and sustainability are the key drivers of value creation.
Annual GDP growth
The Danish economy
The Danish economy remains robust, with prospects of balanced growth, albeit at a slightly lower pace than in recent years. Capacity pressures are broadly neutral, and there are no signs of significant imbalances. GDP grew by 2.9% in 2025.
Growth is expected to moderate in the coming years. According to Danmarks Nationalbank’s latest forecast, GDP is projected to increase by 1.8% in 2026 and 2027, rising to 2.0% in 2028. Growth is dampened by weaker global demand due to geopolitical tensions and the war in the Middle East, while higher energy prices are putting upward pressure on inflation.
In recent years, growth has been supported by exports, particularly in the pharmaceutical industry, including production abroad under Danish ownership. Looking ahead, export growth is expected to slow due to a global slowdown, although the pharmaceutical sector will continue to contribute positively to the Danish economy.
Source: Statistics Denmark and Danmarks Nationalbank
Inflation and interest rate outlooks remain highly uncertain. After a period of low and declining inflation, upward price pressures are re-emerging, driven by higher energy prices, particularly the war in the Middle East.
Since summer 2025, the ECB has kept policy rates unchanged, and Denmark has followed suit. However, Danmarks Nationalbank notes that higher energy prices have led markets to expect rising euro area rates over the coming year. This has already pushed up Danish market rates, including mortgage rates, although overall financial conditions remain broadly neutral.
Interest rate developments reflect this uncertainty. In week 15, the longterm mortgage rate was 3.87%, while the short-term rate was 2.22%. Rates remain moderate, but future developments will largely depend on inflation, energy prices, and global growth prospects.
Danmarks Nationalbank expects inflation of 1.8% in 2026, 2.0% in 2027, and 1.9% in 2028.
Source: Finance Denmark and Danmarks Nationalbank
Consumer confidence stood at -13.8 in March, down from -13.1 in February. The six-month average is -16.2.
Despite low inflation, rising real wages, and a strong labour market, consumer optimism remains weak. Confidence has generally declined since June 2024 (-4.4), but remains above the low of -37 recorded in October 2022.
Negative consumer confidence is driven by higher grocery prices and concerns about rising inflation. Geopolitical tensions, the war in the Middle East, and higher energy prices also create uncertainty and weigh on confidence.
The labour market has seen strong progress in recent years. Employment has increased markedly since 2019 and remains at a historically high level. In January 2026, there were approximately 3,079,500 employees—900 more than the previous month. Over the past year, employment rose by 34,700 (1.1%), although growth has slowed.
Labour market pressures have eased and are expected to decline further. The labour force has expanded due to increased international labour and later retirement, helping to reduce pressure. Danmarks Nationalbank expects continued employment growth, but at a slower pace in line with more moderate economic growth.
Unemployment is rising slightly from a low level. From January to February 2026, the number of unemployed full-time equivalents increased by 3,200, bringing the unemployment rate to 3.1%.
Source: Statistics Denmark and Danmarks Nationalbank
Yield in
Residential rental
newer properties
Lolland, Falster and Møn
Kolding
Esbjerg
Other South Jutland
market rent in DKK/sq m
market rent in DKK/sq m
DKK1.200 DKK1.000 DKK
Yield
Residential rental
fully developed properties
Østerbro, Frederiksberg and Gentofte
Falster and Møn
Sønderborg
Other South Jutland
rent in DKK/sq m
rent in DKK/sq m
DKK 1,400 DKK 1,225 DKK
Residential rental cost determined rental properties
Trends in residential rental properties
The residential segment continues to underpin Danish transaction activity and remains the market’s dominant segment, accounting for approximately 51% of the total property transaction volume in 2025. Greater Copenhagen accounts for the largest share of investor interest, and institutional demand remains strong – particularly in the major cities.
A continuing shortage of rental housing, limited development opportunities and increasing migration to cities are expected to put further upward pressure on market rents in 2026. Rent levels are expected to rise in the largest cities, whilst high investor interest and intensified competition may push down yield requirements.
Another theme that has gained traction over the past year is privatisation, where investors seek to realise value by selectively selling units to the owner-occupied housing market, supported by high activity in the private housing market.
Whilst investor interest in rental properties with free rent setting is expected to remain high, OMK properties (cost-based tenancies) are experiencing more selective demand. Cooling-off periods and high equity requirements limit the pool of buyers to financially strong, long-term investors. However, new rules on generational succession have increased interest in well-located, low-risk OMK properties, and demand is expected to rise.
Søagerhusene, Smørum
Lolland, Falster and Møn
Other Funen
Trends in Office Properties
Demand for attractive office properties remains intact, with location and correct pricing continuing to be high priorities. 2025 has seen several major transactions where location and pricing have been particularly attractive. COVID-19 really put working from home on the agenda; although working from home remains an integral part of the culture in many workplaces, we are now seeing a counter-trend: more companies want their employees to return to the office to better support the exchange of ideas and knowledge sharing.
Office occupancy has risen throughout the year and is expected to continue growing towards 2028. The limited prevalence of frequent remote working points to a rising demand for offices, as the majority of new employees are expected to have a high degree of physical presence. This will increase the pressure on companies’ need for more space.
At the same time, the volume of speculative office construction has fallen significantly. Developers are finding it difficult to make these projects financially viable due to
Available office space as a percentage of building stock
rising construction costs, more expensive financing and higher return requirements. A number of companies, particularly large ones, are implementing flexible and modern office solutions, such as workspaces in larger shared office spaces or the option to scale up or down the office at short notice. The supply of flexible concepts is high in Copenhagen and the surrounding area, whilst in Aarhus supply is limited despite high demand.
In addition to flexible office solutions, both tenants and investors are increasingly seeking modern, sustainable and future-proof office premises. Rising ESG requirements play a major role for offices, and this trend is expected to continue. The value of properties that are, for example, DGNB-certified in the long term will exceed the value of properties that are not certified.
The vacancy rate for offices nationwide remained unchanged in the fourth quarter of 2025 compared with the same quarter the previous year, at 5.6%. Yield requirements are generally expected to remain stable over the coming year, as are market rents.
Source:
Østerbro, Frederiksberg and Gentofte
Lolland, Falster and Møn
Kolding
Sønderborg
market rent in DKK/sq m 2,000 DKK 950 DKK 500 DKK
in
Annual market rent in DKK/sq m 1,800 DKK 1,100 DKK 400 DKK
Trends in Retail Properties
The retail segment has been on the rise, with a transaction volume of approximately DKK 7.1 billion in 2025. This transaction volume is underpinned by several significant transactions. In particular, Slate Asset Management’s acquisition of a portfolio of shopping centres and Live Nation’s acquisition of the Royal Arena account for the growth in the retail segment.
The rental market is stabilising, and the multi-year trend of falling market rents, particularly in the provinces, has reversed, which has strengthened confidence across the retail segment. In Copenhagen, demand is strongest on the main shopping streets, supported by growing interest from international brands seeking high exposure in prime locations.
The retail market is further supported by a significant upturn in tourism, with Copenhagen’s growing international profile continuing to contribute to higher footfall in central urban areas. Outside Copenhagen and Aarhus, traditional high-street shops in town centres are increasingly being
Available retail space as a percentage of building stock
converted into food and drink concepts and experience-based venues. This reflects changing consumption patterns and, consequently, trends in demand.
The growth in the retail sector is well supported by the rise in real wages. It is therefore to be expected that consumption will continue to rise. This is underpinned by a strong labour market and inflation that is under control. However, there are also risk factors, such as a trade war with the US, which could hamper growth and cost Danish jobs. This is reflected, among other things, in consumer confidence –particularly families’ expectations regarding their financial situation in a year’s time – which has dipped during 2025.
The vacancy rate for retail has remained fairly stable nationwide and has fallen by 0.2 percentage points since the last quarter to 3.2% in the first quarter of 2026. Yield requirements are assessed as stable, supported by expectations of rising private consumption, whilst there is some risk of falling market rents in certain areas.
Source: Ejendomstorvet-ED Statistikken, estimates as of Q2 2026
Lolland, Falster and Møn
Vejle
Trends in Industrial Properties
The logistics segment continues to experience strong demand, with a transaction volume of DKK 9.7 billion in 2025, which is DKK 3.4 billion, or 26%, lower than in 2024. Modern logistics properties close to motorways and other logistics corridors are particularly attractive, as are properties for light industry near the major cities. This is partly due to the conversion of several industrial estates into residential developments.
Demand is high for newer and modern logistics properties located close to essential infrastructure such as motorways – that is, around the primary logistics corridors, where development opportunities are simultaneously limited. Demand is also high for light industrial properties, where locations around the major cities are the most important factor. This is not surprising, given that an ever-increasing proportion of traditional industrial estates in and around the major cities are gradually being developed for residential use.
Demand for sale-and-lease-back agreements with longterm leases remains reasonable and is widespread across the country, where the creditworthiness of the companies and the length of the non-termination period are the primary factors for marketability, whilst the specific location is, to a certain extent, less decisive. It is difficult to secure suitable sites for logistics properties in prime locations within the major logistics corridors in Denmark.
However, this is primarily a long-term challenge, as there is currently a certain tendency towards an oversupply of modern logistics facilities in both the Triangle Region and Copenhagen. The vacancy rate for industrial and logistics properties is 3.4% in the fourth quarter of 2025, a decrease of 0.1 percentage points compared with the third quarter of 2025. Yield requirements are expected to remain stable in the coming year, as is the case for market rents, although there is potential for geographical variations.
Available industrial space as a percentage of building stock Source:
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
Rent levels and net initial yields are stated for residential units with an average size of approximately 80 sq m.
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.
EDC Poul Erik Bech’s Research & Analysis department prepares customised analyses for major institutional investors as well as private investors. We have solved assignments for PFA, PensionDanmark, PenSam, Coop, COPI Group and Salling Group with analyses, including due diligence on the buyer’s investigation of the seller’s properties prior to the completion of the transaction. The assignments cover, among other things:
• Commercial Due Diligence
• All relevant aspects of project development and the purchase and operation of investment and user properties
• Analyses for e.g. lawyers who need data for a housing court case
• Analyses of rent levels and realised trade prices
• Analyses of the relationship between supply and demand in major cities as well as smaller provincial towns
• Analyses of housing stock development by ownership in subjective, specific, defined geographical areas
Joseph Alberti Head of Research
joal@edc.dk +45 5858 7467
Niclas Holm Research Manager
niho@edc.dk
+45 5858 8784
CONTACT
EDC Poul Erik Bech
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Køge +45 5858 8379
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West Zealand +45 5858 8396
Lolland-Falster +45 5858 8140
Odense +45 5858 8397
Jutland
Kolding +45 5858 8399
Aabenraa +45 5858 8425
Sønderborg +45 5858 8422
Esbjerg +45 5858 8398
Vejle +45 5858 8423
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