The Danish commercial real estate market experienced strong investment activity in the first half of 2025. Transaction volume reached DKK 36 billion in H1 2025, marking a 80% increase compared to the same period in 2024. This significant growth was primarily driven by several large portfolio transactions, highlighting a renewed confidence among institutional investors in the Danish market and a positive outlook on the macroeconomic climate.
Residential rental properties remained the dominant segment, accounting for nearly half of total transaction volume in the first half of the year. Volume more than doubled compared to the same period last year, underscoring exceptionally strong demand. Newer residential rental assets are particularly attractive to buyers. Notable transactions within the ‘micro living’ subsegment included the UMEUS student housing portfolio and Kaktus Towers, while larger assets such as Lindgren’s House and Teglporten also changed hands.
Hotels represented the second-largest segment, comprising 15% of total volume. This was largely driven by CapMan’s acquisition of Midstar Fastigheter, with the Danish hotel component estimated at around DKK 3.5 billion – the largest transaction of the year to date. AKF, in collaboration with AKF Koncernen, acquired Comwell Portside in a billion-kroner deal and subsequently continued its expansion with the purchase of Comwell H.C. Andersen Odense Doce
by Wyndham. These deals signal strong investor confidence in the Danish tourism sector.
The Danish economy is currently in a moderate expansion phase following several years of growth and high employment. However, labor market pressures are easing, and employment is projected to grow only modestly in 2025–2026. Growth has been primarily driven by the industrial sector and robust export companies. Concurrently, rising real wages and low interest rates have supported private consumption. On a global scale, however, economic uncertainty persists, particularly due to U.S. trade policy and tariff increases, which have caused volatility in financial markets and weakened global growth prospects. Denmark is not immune to these effects, facing potential impacts such as reduced risk appetite and fluctuating mortgage interest rates. Despite international headwinds, key Danish economic indicators remain solid, although continued stability will depend on consumer confidence in an uncertain global environment.
Yield requirements are expected to remain relatively stable over the next 12 months, though a downward adjustment is anticipated for residential properties in the Greater Copenhagen area. Market rents for residential rental properties are expected to rise in many parts of the country, supported by low construction activity, while rents across other segments are projected to remain broadly stable.
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
Transaction activity in the residential real estate segment remains robust. The total residential transaction volume for the first half of 2025 amounts to nearly DKK 18 billion –approx. 50% higher than the same period last year. Among the most notable deals are NREP’s sale of the UMEUS portfolio and Catella’s sale of Kaktus Towers, both targeting the “young professionals” segment.
Modern residential assets are particularly sought after, accounting for roughly 40% of all transactions. However, there are signs of declining interest in regulated residential assets, while unregulated properties continue to dominate, both as existing buildings and development projects. There is strong investor demand for both forward purchases and, increasingly, forward funding arrangements.
Demand is especially concentrated in the Greater Copenhagen area, leading to downward pressure on yield requirements. This coincides with expectations of rising market rents, driven by low levels of new construction. The limited
supply is expected to push rents higher – a favorable trend for investors.
The new property tax regime continues to create uncertainty, particularly regarding the magnitude of potential tax increases. However, a cap on annual increases, which remains in place even after a change in ownership, helps mitigate the long-term impact.
The combination of high interest rates, rising taxes, and limited new development is increasing the incentive to rent rather than buy, particularly in major urban areas. This dynamic is placing additional pressure on the rental market. Vacancy rates have declined by 1.3 percentage points over the past year and now stand at 2.7%. Vacancies are lowest in the Central Jutland Region and the Capital Region, and highest in Northern Jutland. Yield requirements are expected to remain stable nationwide, though a downward trend is expected in the Copenhagen area.
Axelhave, Aarhus
Yield in
Lolland, Falster and Møn
Trends in Office Properties
Transaction activity in the office segment remained subdued in the first half of 2025, with a total volume of approximately DKK 3.7 billion. This was largely driven by a few major deals – most notably Calum’s acquisition of Stamholmen 147–161, Denmark’s longest office building. There have also been more speculative acquisitions, including the purchase of two plots in Nordhavn intended for future office development.
While demand for prime office properties remains intact, it is predominantly driven by domestic investors. International capital remains cautious, as the office segment continues to face headwinds globally. However, Denmark stands out due to its high employment rates and limited remote work culture, partly attributable to short commuting distances. Still, some companies appear to have underesti-
Available office space as a percentage of building stock
mated their need for physical office space, while others are introducing new restrictions on working from home.
Flexible office solutions such as serviced offices and coworking spaces are in high demand, particularly in Copenhagen. By contrast, cities like Aarhus offer limited supply, especially in central locations. At the same time, there is growing emphasis on modern and sustainable office spaces, driven by rising ESG requirements and upcoming regulations. This could enhance the value of certified properties, although it remains uncertain whether it will impact risk premiums.
Office vacancy stood at 5.6% in Q2 2025. Both yield requirements and market rents are expected to remain stable in the near term.
Source: Ejendomstorvet-ED Statistikken, estimates as of Q3 2025
Østerbro, Frederiksberg and Gentofte
Sønderborg
Trends in Retail Properties
The retail sector experienced a strong recovery in the first half of 2025, with a transaction volume nearing DKK 4 billion – an 82% increase compared to the same period last year. According to Statistics Denmark, the volume index rose by 4.1 percentage points and the value index by 6 percentage points from May 2024 to May 2025, supported by rising real wages.
The upswing has been primarily driven by increased sales of discretionary goods such as home furnishings, leisure products, and apparel. In contrast, growth in grocery sales has been more modest, with value gains largely attributable to price increases rather than volume.
According to the Confederation of Danish Industry (DI), private consumption is expected to continue rising, supported by low inflation and high employment levels. However, un-
certainty remains, for instance, due to the potential risk of a trade conflict with the United States. Consumer confidence has declined in 2025, particularly regarding households’ expectations of their own financial situation.
Investor demand is especially focused on grocery-anchored retail properties with strategic locations and long lease agreements, which makes them attractive and often highly priced. Moreover, several major shopping centre transactions have taken place in 2025, which may signal a shift in market sentiment.
Retail vacancy remains stable and stood at 3.14% at the end of Q2 2025. Yield requirements are expected to remain steady, supported by prospects of falling interest rates, although there may be localised risks of declining market rents.
Source: Ejendomstorvet-ED Statistikken, estimates as of Q3 2025
Lolland, Falster and Møn
Trends in Industrial Properties
The logistics segment continues to experience high demand, with total transaction volume reaching nearly DKK 5.4 billion in the first half of 2025, roughly unchanged compared to the same period last year. Modern logistics facilities located near motorways and key transport corridors remain highly attractive, as do light industrial properties near major cities. This is partly driven by the conversion of some commercial zones into residential areas, reducing the supply of industrial space.
There is a growing emphasis on sustainable and energy-efficient buildings, with certifications increasingly valued. A notable example is DSV’s logistics center in Horsens, which features solar panels, battery storage, and geothermal energy systems.
Sale-and-leaseback agreements with long non-terminable lease terms remain in strong demand nationwide. Transacti-
Available industrial space as a percentage of building stock
onal liquidity is primarily influenced by tenant credit quality and lease duration, with location playing a somewhat lesser, though still relevant, role.
Access to well-positioned plots in central logistics corridors poses a long-term challenge. Currently, however, there is a degree of oversupply in both the Triangle Region and the Copenhagen area, which has pushed vacancy rates higher and may exert downward pressure on rents in the short term. Over the longer term, the outlook remains positive.
Vacancy in the industrial and logistics sector rose to 3.14% in Q2 2025, an increase of nearly 0.5 percentage points year-over-year. Yield requirements and market rents are generally expected to remain stable, though regional variations may occur.
Source: Ejendomstorvet-ED Statistikken, estimates as of Q3 2025
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
CONTACT
EDC Poul Erik Bech
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