The promising trend in the commercial property market continued into the third quarter of the year. The transaction volume in the first three quarters of the year has reached DKK 50.5 billion, which is more than DKK 15 billion above the level in the same period last year - an increase of 43%. It also means that, with three months to go, the commercial property market has almost already surpassed the total transaction volume for the whole of 2024, which totalled DKK 52 billion.
Residential rental properties continue to lead the way, accounting for 53% of the total transaction volume for 2025 so far, indicating that investors continue to favour investments with stable demand and lower risk. This is followed by industrial/logistics (15%), office (11%), retail (10%), while hotels (10%) have also established themselves as rising tourism and record overnight stays have made the sector more attractive than before.
Among the most notable deals of the year so far is the Midstar Hotel portfolio, where Capman has acquired 63,000 m² of hotel assets for DKK 3.5 billion from Midstar AB. In the residential segment, Greystar Real Estate Partners LLC has acquired the UMEUS portfolio from NREP, which includes 57,600 m² of modern student housing. Most recently, the retail segment has also seen significant activity with Project Melba, where Slate Asset Management acquired 72,800 m² from StepStone Group Europe LLP
and NREP – including prominent retail properties such as Lyngby Stationscenter and Holte Midtpunkt.
Common to the transactions is that they reflect the strong international interest in the Danish property market. The latest figures show that foreign investors account for 42% of the total transaction volume, emphasising Denmark’s position as an attractive and stable investment market.
The Danish economy is in a balanced economic situation. In the second quarter of 2025, GDP grew by 1.0%, and the latest forecasts expect GDP growth of around 2.0% in 2026 and 2025. Employment remains at a historically high level with 3,060,800 employees and an unemployment rate of 2.9% in July 2025, and Danmarks Nationalbank expects a continued increase in employment until the end of 2027.
Inflation is approaching 2% and since the summer of 2024, the ECB and Danmarks Nationalbank have collectively cut interest rates by 2.0 percentage points, with further cuts expected. The latest interest rate cuts mean that Danish mortgage rates are now around 4%. However, despite low inflation, rising real wages and a strong labour market, consumer confidence is still falling and stood at -18.7 in September. This is mainly due to price increases on groceries, fear of new inflation, geopolitical tensions and announced layoffs in several of the country’s largest companies.
Annual GDP growth
The Danish economy
The Danish economy is in a balanced economic situation after a long period of high employment. Labour market pressures are easing and employment is expected to grow at a more moderate pace. In the second quarter of 2025, GDP grew by 1.0%, adjusted for price and seasonal effects, primarily driven by the pharmaceutical industry. Without this sector, gross value added fell by 0.3%.
In recent years, growth has been fuelled by industry, especially the pharmaceutical sector, as well as increased exports and improved purchasing power, which together have contributed to a moderate recovery in the economy.
Danmarks Nationalbank now expects GDP growth of 2.0% in both 2025 and 2026, which is a significant downward revision from previous forecasts. In comparison, the government estimates growth of 1.4% in 2025 and 2.1% in 2026. The lower growth expectations are mainly due to weaker world trade as a result of higher tariffs and a more subdued development in the pharmaceutical industry.
Source: Statistics Demark and The Central Bank of Denmark
Lower inflation and the prospect of price developments moving towards the inflation target of around 2% have prompted both the ECB and the US Federal Reserve to ease monetary policy. In September, the Fed cut interest rates by 0.25 percentage points and further cuts are expected. Since the summer of 2024, the ECB and Danmarks Nationalbank have collectively lowered interest rates by 2.0 percentage points.
In week 41 of 2025, the long-term mortgage rate was 3.92%, while the shortterm rate, which is more influenced by monetary policy, was 1.86%. The interest rate cuts and expectations have led to falling market interest rates. According to the Ministry of Economic Affairs’ August report, the 30-year Danish mortgage rate is expected to be 4.2% in 2025 and 4.3% in 2026.
Source: Finance Denmark and Statistics Denmark
Consumer confidence fell in September to -18.7 from -17.2 the month before and is now at its lowest level since spring 2023. The decline is mainly due to consumers’ assessment of the family’s current financial situation.
Despite low inflation, rising real wages and a strong labour market, Danes are still struggling to find optimism. Confidence has been declining since June 2024, when it stood at -4.4, but it is still above the October 2022 low of -37, which is the lowest level in the 48-year history of the survey.
The persistently negative consumer confidence is mainly due to grocery price increases, fears of renewed inflation, geopolitical tensions and announced layoffs at several of the country’s largest companies.
Employment has increased by 263,000 people from the end of 2019 to March 2025. According to Statistics Denmark, the number of employees increased by 3,600 in July 2025, corresponding to 0.1% compared to June. This means that 3,060,800 people had a salaried job. Since July 2024, employment has increased by 36,900 people, or 1.2%, and remains at a historically high level.
However, the pressure on the labour market has eased and is expected to decrease further in the coming year. The labour force has grown as a result of increased international labour and later retirement, which has reduced the pressure. Danmarks Nationalbank expects employment to continue to increase until the end of 2027 by a further 43,000 people. However, the Ministry of Economic Affairs expects only a small increase.
From August to September, unemployment increased by 600 people. The unemployment rate remains low at 2.9%, corresponding to 88,800 unemployed.
Source: Statistics Denmark and the Central Bank of Denmark
Market activity has been increasing throughout 2025, and the year-to-date transaction volume is already significantly above the level at the same time last year. This means that expectations for total transaction volumes in 2025 have also increased. This is helped by the fact that the transaction volume for the last 12 months is now over DKK 66 billion. It is primarily residential rental properties that have been in investors’ sights with just over DKK 35 billion. At the same time, international investors have returned to Denmark in earnest, accounting for 45% of investments in the property market.
Demand for residential rental properties is increasingly focussing on newer homes with market rents, as high inte-
rest rates make it difficult to finance older properties with development opportunities. At the same time, construction activity has slowed in recent years due to interest rates and uncertainty about returns on new projects.
The combination of relatively high interest rates and rising property taxes increases the incentive to rent rather than own, especially in the largest cities. Together with declining construction activity, this is putting pressure on the rental market, where rent levels have started to rise in several places, especially for office and residential property, while the development of yield requirements has generally been stable and unchanged compared to the last quarter.
in Virkelund – a part of Coop Byen, Albertslund
Lolland, Falster and Møn
Other Funen
Trends in Office Properties
Office trading activity in the three quarters remains low with a transaction volume of approximately DKK 5.5 billion, corresponding to 11% of the transaction volume. This is primarily driven by a few large transactions - including Calum’s purchase of Stamholmen 147-161, Denmark’s longest office property. There were also more speculative purchases, including two sites in Nordhavn for office construction.
The demand for attractive office properties is intact, but characterised by Danish players. International investors are holding back as the global office segment is under pressure. However, the Danish market stands out with high employment and limited homeworking - partly due to short commuting times. However, some companies have undere-
Available office space as a percentage of building stock
stimated the need for physical office capacity, while others are introducing restrictions on working from home.
Flexible office solutions such as serviced offices and office hotels are in demand, especially in Copenhagen, while the supply in Aarhus, for example, is limited - especially in the city centre. There is also an increasing focus on modern and certified office space, driven by increased ESG requirements and upcoming regulation. This may strengthen the value of certified properties, but it remains unclear whether this will affect the risk premium.
Office vacancy was 5.6% in the second quarter of 2025. Yield requirements and market rents are expected to remain stable in the coming period.
Source: Ejendomstorvet-ED Statistikken, estimates as of Q4 2025
Østerbro, Frederiksberg and Gentofte
Lolland, Falster and Møn
Sønderborg
market rent in DKK/sq m
DKK 1,000 DKK 550 DKK
Annual market rent in DKK/sq m 1,800 DKK 1,200 DKK
market rent in DKK/sq m
Trends in Retail Properties
For the second consecutive year, retail grew in 2024, supported by higher real wages. The volume index increased by 2.1 percentage points and the value index by 3.2 percentage points from December 2023 to December 2024. Private consumption is expected to continue in 2025, driven by high employment and low inflation. However, geopolitical risks such as trade conflicts could create headwinds.
The growth in retail sales is mainly attributed to a continuous increase in sales of other consumer goods, such as home and leisure, and to a lesser extent sales of clothing. On the other hand, sales of groceries have remained fairly constant with a slight decline, with only the value index continuing to rise driven by rising prices.
The retail property market was characterised by low transaction activity for much of 2024. However, the year ended with significant portfolio sales of DKK 900 million
across the country. Strøget in Copenhagen saw an increase in transaction activity, including Bucherer’s purchase of Østergade 22 at a record-high price per square metre.
Leasing picked up in the capital towards the end of the year, while developments are more fragmented nationwide. Decentralised locations continue to struggle, while the main streets of larger cities are doing better. Demand for grocery portfolios with a wide geographical spread remains robust. This is due to the chains’ long leases and need for good locations. The low risk means that grocery stores often trade at relatively high prices compared to the rest of the market.
Retail vacancy increased slightly from 2024 to 2025, reaching 3.3% in Q1 2025 - an increase of 0.2 percentage points in one year. Yield requirements are considered stable, supported by expectations of falling interest rates, but rents may be under pressure in some locations.
Source: Ejendomstorvet-ED Statistikken, estimates as of Q4 2025
Lolland, Falster and Møn
Vejle
Trends in Industrial Properties
The logistics segment continues to experience high demand with a total volume of almost DKK 7.5 billion. Modern logistics properties close to motorways and other logistics corridors are particularly attractive, as are light industrial properties near the largest cities. This is partly due to the fact that more commercial areas are being converted to residential use.
There is an increased focus on sustainable and energy-efficient buildings, preferably certified. DSV’s logistics centre in Horsens is highlighted as an example with solar cells, batteries and geothermal technology. Sale-and-lease-back agreements with long non-cancellable leases are still in demand throughout the country. The marketability depends
mainly on the tenant’s creditworthiness and the length of the contract, while location plays a slightly smaller role.
The availability of attractive land in central logistics corridors is a long-term challenge. However, there is currently some oversupply in the Triangle Region and near Copenhagen, which has lifted vacancy rates and may put pressure on rents in the short term. In the longer term, the outlook is considered positive.
The vacancy rate for industrial and logistics properties has increased to 3.14% in Q2 2025, an increase of almost 0.5 percentage points in one year. Yield requirements and market rents are generally expected to remain stable, but with the possibility of geographical variations.
Available industrial space as a percentage of building stock
Source: Ejendomstorvet-ED Statistikken, estimates as of Q4 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 +45 5858 7467
niho@edc.dk
CONTACT
EDC Poul Erik Bech
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