1 MARKETUpdate Q Residential rental Office Retail Industrial Market rent GDP growt Employment Rates Consumer confidence Availability Yield International Poul Erik Bech 2023 2
EDC Poul Erik Bech welcomes you to the 2nd quarter of Market Update, which is your tool for following economic developments in the commercial real estate market. Market Update is published quarterly in both Danish and English and reviews the most important key figures from the Danish economy and the commercial property market.
You can find detailed market data on yield requirements, rental levels and vacancy rates within residential rental, office, retail and industrial properties. There are several relevant themes this quarter:
• The economy has performed better than expected. This indicates that Denmark will avoid a recession and have a soft landing instead. Inflation is still high but has been falling since the autumn of 2022. It is the same story with the consumer confidence, which is still negative, but has been increasing since the autumn of 2022. Finally, employment has been steadily increasing, which is in sharp contrast to expectations from just few months ago.
• All these conditions help to support the activity among businesses, and there is still strong activity in the occupier market for stores, offices, industrial and logistics properties. The vacancy rate for office properties has fallen slightly, while it has increased slightly for retail and industrial and logistics properties. For all property types, the vacancy is very low in a historical context, and due to the low expectations for the economy in 2023, we expect the vacancy to increase slightly in the coming quarters.
• Activity on the commercial real estate investment market is significantly lower than last year, which is mainly due to the sharp rise of interest rate levels we experienced during the last year to year and a half. However, there are signs that a stabilization of interest rates is underway, and at the same time the yield requirements for several property types and in several geographical areas have increased slightly since last quarter, which indicates progress.
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Executive summary
Annual GDP growth
The Danish economy
After two years of strong growth in GDP of 4.9 percent and 3.8 percent in 2021 and 2022, respectively, there are now prospects for a growth slowdown. The preliminary calculation of GDP growth for 2023 is 0.9 percent. The lower GDP growth can be linked to a reduced private consumption due to rising interest rates and a reduced purchasing power from a historical high inflation. The latest forecast from Danmarks Nationalbank shows an expected growth of 1.2 percent in both 2024 and 2025. The forecast for GDP this year is slightly higher than the last forecast indicating that the risk of a mild recession has been averted. This can be linked to a high foreign demand, which is most likely associated with the noticeable production increase in the pharmaceutical industry. The forecast for GDP next year is unchanged.
Source: Statistics Denmark & Nationalbanken
Interest rates have risen significantly in 2022 and short mortgage rate is still rising moving into 2023. The upward pressure on interest rates can be linked to a combination of several factors, primarily that the central banks are trying to tame the historically high inflation. Furthermore, the war in Ukraine and the Corona pandemic also play a big part in the high inflation. The short mortgage rate has been rising over the past month and is currently at 3.41 percent in June 2023. The long mortgage rate has been more volatile in 2023 and is currently at 4.14 percent in June 2023.
Source: Finance Denmark & Statistics Denmark
Consumer confidence indicates the population’s view of its current and future economic situation and is thus a good indicator of how the general population is affected by Denmark’s economic situation. Consumer confidence in May is at minus 15.1 and has thus risen since April, when it was at minus 18.2. The average for 2023 is minus 21.5. Three out of five indicators that together make up consumer confidence have risen since last month. The judgement of the current situation has become less negative expectation of the future economic situation has risen, which play a big role in the improved consumer confidence.
Source: Statistics Denmark
The latest figures from Danmarks Statistik from March 2023 show an increase in the number of employees of 4,794 persons corresponding to an increase of 0.16 percent compared to April. The number of employees increased especially in the sectors Companies and organizations and Public administration and service. With 46,076 new employees since March 2022, employment remains at peak levels. However, the pressure on the labor market is expected to ease with the growth slowdown in the Danish economy.
Source: Statistics Denmark
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Interest rates
Consumer confidence indicator
-40 20 10 0 -10 -30 -20 2004 2006 2008 2010 2014 2012 2016 2018 2020 2002 2022 2005 2007 2009 2011 2015 2013 2017 2019 2021 2003 2023 2001 2000 -1% 2% 6% 1% 4% 0% 2013 2014 2015 2016 2018 2017 2019 2020 2021 2022 3% 5% 2023 Short-term mortgage rateLong-term mortgage rate -3% 0% 4% 5% 2013 2014 2015 2016 2017 2018 2020 2019 2021 2022 2% -2% 2012 2024 1.9 1.3 1.6 2.3 3.2 2.8 2.0 -1% 3% 1% -2.0 2023 1.5 3.6 1.2 4.9 2025 2011 2010 0.9 0.2 0.9 1.2 Real growth in BNP compared to previous year (pct.) Expected real growth in BNP compared to previous year (pct.)
Employees
2.5 2.6 3.0 2.7 Million 2023 2013 2014 2015 2016 2018 2017 2019 2020 2021 2.9 2.8 2022 2012
newer properties
Yield in %, annual market rent in DKK/sq m incl. operating expenses and trends for the next 12 months
4 Area Prime Secondary Tertiary Trend Central Copenhagen Yield in % 3.75% 4.00% 4.50% Annual market rent in DKK/sq m 2,550 DKK 2,200 DKK 2,000 DKK Østerbro, Frederiksberg and Gentofte Yield in % 3.75% 4.00% 4.25% Annual market rent in DKK/sq m 2,450 DKK 2,100 DKK 1,950 DKK Harbour areas Yield in % 3.75% 4.00% 4.25% Annual market rent in DKK/sq m 2,400 DKK 2,000 DKK 1,800 DKK Ørestad Yield in % 4.00% 4.25% 4.75% Annual market rent in DKK/sq m 1,900 DKK 1,800 DKK 1,700 DKK Remaining Copenhagen Yield in % 4.00% 4.25% 4.75% Annual market rent in DKK/sq m 2,300 DKK 2,000 DKK 1,800 DKK Western suburbs Yield in % 4.50% 5.00% 5.50% Annual market rent in DKK/sq m 1,750 DKK 1,600 DKK 1,500 DKK Northern suburbs Yield in % 4.00% 4.50% 5.00% Annual market rent in DKK/sq m 2,000 DKK 1,750 DKK 1,500 DKK North Zealand Yield in % 4.25% 5.00% 6.00% Annual market rent in DKK/sq m 1,900 DKK 1,650 DKK 1,400 DKK East Zealand Yield in % 4.25% 5.00% 6.50% Annual market rent in DKK/sq m 1,900 DKK 1,600 DKK 1.300 DKK West Zealand Yield in % 5.00% 6.25% 7.50% Annual market rent in DKK/sq m 1,500 DKK 1,300 DKK 1,000 DKK South Zealand Yield in % 5.00% 6.25% 7.50% Annual market rent in DKK/sq m 1,350 DKK 1,100 DKK 950 DKK Odense Yield in % 4.50% 5.00% 5.50% Annual market rent in DKK/sq m 1,450 DKK 1,275 DKK 1,100 DKK Other Funen Yield in % 5.25% 5.75% 6.50% Annual market rent in DKK/sq m 1,250 DKK1,100 DKK 950 DKK Vejle Yield in % 5.00% 5.50% 6.25% Annual market rent in DKK/sq m 1,375 DKK 1,175 DKK 1,000 DKK Kolding Yield in % 5.50% 6.00% 6.75% Annual market rent in DKK/sq m 1,300 DKK 1,150 DKK 950 DKK Fredericia Yield in % 5.50% 6.00% 6.75% Annual market rent in DKK/sq m 1,250 DKK 1,100 DKK875 DKK Esbjerg Yield in % 5.00% 6.00% 7.00% Annual market rent in DKK/sq m 1,200 DKK900 DKK 750 DKK Other South Jutland Yield in % 6.00% 7.00% 7.50% Annual market rent in DKK/sq m 1,100 DKK 800 DKK 675 DKK Aarhus Yield in % 4.00% 4.50% 5.00% Annual market rent in DKK/sq m 1,800 DKK 1,550 DKK 1,350 DKK Silkeborg Yield in % 4.75% 5.75% 7.25% Annual market rent in DKK/sq m 1,400 DKK 1,150 DKK1,000 DKK Viborg Yield in % 5.25% 6.25% 7.25% Annual market rent in DKK/sq m 1,125 DKK 1,000 DKK 850 DKK Herning Yield in % 5.00% 5.75% 7.00% Annual market rent in DKK/sq m 1,200 DKK 1,050 DKK 900 DKK Aalborg Yield in % 4.50% 5.00% 5.75% Annual market rent in DKK/sq m 1,400 DKK 1,150 DKK 950 DKK Hjørring Yield in % 5.25% 6.50% 7.25% Annual market rent in DKK/sq m 1,150 DKK950 DKK 775 DKK Frederikshavn Yield in % 5.75% 6.75% 7.50% Annual market rent in DKK/sq m 1,050 DKK 850 DKK 650 DKK Source: EDC International Poul Erik Bech, estimates as of Q2 2023
fully developed properties
Yield in %, annual rent in DKK/sq m incl. operating expenses and trends for the next 12 months
Source: EDC International Poul Erik Bech, estimates as of Q2 2023
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Area Prime Secondary Tertiary Trend Central Copenhagen Yield in % 3.75% 4.00% 4.50% Annual rent in DKK/sq m 1,800 DKK 1,650 DKK 1,500 DKK Østerbro, Frederiksberg and Gentofte Yield in % 3.75% 4.25% 4.50% Annual rent in DKK/sq m 1,750 DKK 1,650 DKK 1,550 DKK Remaining Copenhagen Yield in % 4.00% 4.25% 4.75% Annual rent in DKK/sq m 1,700 DKK 1,600 DKK 1,500 DKK Western suburbs Yield in % 4.75% 5.25% 6.25% Annual rent in DKK/sq m 1,600 DKK 1,525 DKK 1,225 DKK Northern suburbs Yield in % 4.25% 4.75% 5.50% Annual rent in DKK/sq m 1,500 DKK 1,350 DKK 1,225 DKK North Zealand Yield in % 4.50% 5.00% 6.00% Annual rent in DKK/sq m 1,500 DKK 1,350 DKK 1,250 DKK East Zealand Yield in % 4.25% 5.25% 7.00% Annual rent in DKK/sq m 1,600 DKK 1,300 DKK 1,000 DKK West Zealand Yield in % 5.50% 6.50% 7.50% Annual rent in DKK/sq m 1,150 DKK 900 DKK 750 DKK South Zealand Yield in % 5.25% 6.25% 7.75% Annual rent in DKK/sq m 1,200 DKK 900 DKK 700 DKK Odense Yield in % 4.75% 5.00% 5.75% Annual rent in DKK/sq m 900 DKK 875 DKK 800 DKK Other Funen Yield in % 5.75% 6.25% 7.50% Annual rent in DKK/sq m 825 DKK 725 DKK 600 DKK Vejle Yield in % 5.25% 6.00% 6.50% Annual rent in DKK/sq m 1,125 DKK 975 DKK 800 DKK Kolding Yield in % 5.75% 6.25% 7.00% Annual rent in DKK/sq m 1,175 DKK 1.000 DKK 850 DKK Fredericia Yield in % 5.75% 6.25% 7.25% Annual rent in DKK/sq m 1,175 DKK 975 DKK 800 DKK Esbjerg Yield in % 5.00% 6.25% 7.50% Annual rent in DKK/sq m 1,050 DKK 725 DKK 550 DKK Other South Jutland Yield in % 6.00% 7.25% 8.25% Annual rent in DKK/sq m 950 DKK 750 DKK 625 DKK Aarhus Yield in % 4.00% 4.75% 5.25% Annual rent in DKK/sq m 1,575 DKK 1,350 DKK 1,200 DKK Silkeborg Yield in % 4.75% 5.75% 7.25% Annual rent in DKK/sq m 1,350 DKK 900 DKK 650 DKK Viborg Yield in % 5.75% 7.00% 8.25% Annual rent in DKK/sq m 1,100 DKK 850 DKK 650 DKK Herning Yield in % 5.25% 6.25% 7.25% Annual rent in DKK/sq m 1,150 DKK 925 DKK 750 DKK Aalborg Yield in % 4.50% 5.25% 6.25% Annual rent in DKK/sq m 1,200 DKK 1,100 DKK 900 DKK Hjørring Yield in % 5.75% 6.50% 7.75% Annual rent in DKK/sq m 900 DKK 800 DKK 700 DKK Frederikshavn Yield in % 6.25% 7.00% 8.00% Annual rent in DKK/sq m 850 DKK 750 DKK 625 DKK
Residential rental cost determined rental properties
Yield in percent and trends for the next 12 months
EDC International Poul Erik Bech, estimates as of Q2 2023
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Area Prime Secondary Tertiary Trend Central Copenhagen Yield in % 1.25% 2.00% 2.75% Østerbro, Frederiksberg and Gentofte Yield in % 1.50% 2.00% 2.75% Remaining Copenhagen Yield in % 2.50% 3.00% 3.50% Western suburbs Yield in % 4.00% 4.75% 5.50% Northern suburbs Yield in % 3.75% 4.25% 5.25% North Zealand Yield in % 4.00% 4.75% 5.75% East Zealand Yield in % 4.00% 5.00% 6.50% West Zealand Yield in % 5.00% 6.25% 7.00% South Zealand Yield in % 5.00% 6.00% 7.25% Odense Yield in % 3.50% 4.50% 5.25% Other Funen Yield in % 5.25% 5.50% 7.00% Vejle Yield in % 5.00% 5.50% 6.00% Kolding Yield in % 5.00% 5.50% 6.50% Fredericia Yield in % 5.50% 6.00% 7.00% Esbjerg Yield in % 5.00% 5.50% 6.50% Other South Jutland Yield in % 5.25% 6.25% 7.25% Aarhus Yield in % 2.00% 3.25% 5.00% Silkeborg Yield in % 4.50% 5.25% 7.00% Viborg Yield in % 5.25% 6.00% 7.75% Herning Yield in % 5.00% 6.00% 7.00% Aalborg Yield in % 3.25% 4.50% 5.75% Hjørring Yield in % 5.25% 6.00% 7.00% Frederikshavn Yield in % 5.75% 6.75% 7.50%
Source:
Yield in %, annual market rent in DKK/sq m incl. operating expenses and trends for the next 12 months
8 Area Prime Secondary Tertiary Trend Central Copenhagen Yield in % 3.50% 4.25% 5.00% Annual market rent in DKK/sq m 2,650 DKK 1,800 DKK 1,450 DKK Østerbro, Frederiksberg and Gentofte Yield in % 3.75% 4.50% 5.50% Annual market rent in DKK/sq m 2,350 DKK 1,600 DKK 1,350 DKK Harbour areas Yield in % 3.50% 4.25% 5.50% Annual market rent in DKK/sq m 2,700 DKK 1,850 DKK 1,600 DKK Ørestad Yield in % 4.25% 4.75% 6.00% Annual market rent in DKK/sq m 2,050 DKK 1,600 DKK 1,450 DKK Remaining Copenhagen Yield in % 4.25% 5.25% 6.25% Annual market rent in DKK/sq m 1,900 DKK 1,350 DKK 1,000 DKK Western suburbs Yield in % 5.00% 7.00% 9.50% Annual market rent in DKK/sq m 1,400 DKK 850 DKK 600 DKK Northern suburbs Yield in % 4.50% 5.75% 8.75% Annual market rent in DKK/sq m 1,625 DKK 1,350 DKK 750 DKK North Zealand Yield in % 5.00% 6.00% 8.50% Annual market rent in DKK/sq m 1,425 DKK 1,025 DKK 700 DKK East Zealand Yield in % 6,25% 7.25% 10.50% Annual market rent in DKK/sq m 1,400 DKK 900 DKK 450 DKK West Zealand Yield in % 6.00% 8.00% 10.50% Annual market rent in DKK/sq m 1,150 DKK700 DKK 350 DKK South Zealand Yield in % 7.00% 8.25% 10.75% Annual market rent in DKK/sq m 1,000 DKK700 DKK 350 DKK Odense Yield in % 5.50% 6.50% 8.50% Annual market rent in DKK/sq m 1,550 DKK 1,000 DKK 650 DKK Other Funen Yield in % 6.50% 8.00% 9.50% Annual market rent in DKK/sq m 1,200 DKK 800 DKK 400 DKK Vejle Yield in % 6.00% 7.50% 9.50% Annual market rent in DKK/sq m 1,450 DKK950 DKK 550 DKK Kolding Yield in % 6.50% 7.75% 9.75% Annual market rent in DKK/sq m 1,400 DKK 800 DKK 450 DKK Fredericia Yield in % 6.50% 8.25% 10.00% Annual market rent in DKK/sq m 1,350 DKK 900 DKK 500 DKK Esbjerg Yield in % 7.00% 8.50% 10.00% Annual market rent in DKK/sq m 1,400 DKK 800 DKK 450 DKK Other South Jutland Yield in % 8.00% 9.50% 11.75% Annual market rent in DKK/sq m 900 DKK 700 DKK 400 DKK Aarhus Yield in % 4.50% 5.50% 8.00% Annual market rent in DKK/sq m 1,800 DKK 1,350 DKK 700 DKK Silkeborg Yield in % 6.25% 7.25% 9.25% Annual market rent in DKK/sq m 1,300 DKK 700 DKK 450 DKK Viborg Yield in % 6.75% 7.50% 9.25% Annual market rent in DKK/sq m 975 DKK 600 DKK 400 DKK Herning Yield in % 6.50% 7.50% 9.25% Annual market rent in DKK/sq m 1.150 DKK 700 DKK 425 DKK Aalborg Yield in % 5.75% 6.50% 7.50% Annual market rent in DKK/sq m 1,300 DKK 900 DKK 600 DKK Hjørring Yield in % 7.00% 8.00% 11.00% Annual market rent in DKK/sq m 1,000 DKK 650 DKK 400 DKK Frederikshavn Yield in % 7.50% 8.50% 11.00% Annual market rent in DKK/sq m 850 DKK 500 DKK 350 DKK Source: EDC International Poul Erik Bech, estimates as of Q2 2023
Office
9 0% 4% 2% 8% 10% 14% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2021 2020 12% 6% 2023 2022 Capital Region of Denmark Region Zealand Region of Southern Denmark Central Denmark Region North Denmark Region Denmark, total Available office space as a percentage of building stock Source: Ejendomstorvet-ED Statistikken, estimates as of Q2 2023 availability Office FOR RENT Aarhus • 423-2.234 sq m • Yearly rent from: DKK 743.634 www.edc.dk/81200258 › FOR RENT Rødovre • 593 sq m • Yearly rent: DKK 948.800 www.edc.dk/114057437 › FOR RENT Aalborg • 563 sq m • Yearly rent: DKK 534.850 www.edc.dk/912110742 › FOR SALE Odense • 648 sq m • Price: DKK 13.950.000 www.edc.dk/51202994 › Selected office premises for sale/rent – see more at edc.dk/erhverv
Yield in %, annual market rent in DKK/sq m incl. operating expenses and trends for the next 12 months
10 Source: EDC International Poul Erik Bech, estimates as of Q2 2023 Area Prime Secondary Tertiary Trend Strøget Yield in % 3.50% 4.25% 4.75% Annual market rent in DKK/sq m 19,000 DKK 10,500 DKK 6,000 DKK Central Copenhagen Yield in % 5.00% 5.75% 6.25% Annual market rent in DKK/sq m 4,750 DKK 2,500 DKK 1,750 DKK Østerbro, Frederiksberg and Gentofte Yield in % 5.25% 6.00% 7.00% Annual market rent in DKK/sq m 4,000 DKK 2,250 DKK 1,400 DKK Harbour areas Yield in % 5.00% 5.75% 6.25% Annual market rent in DKK/sq m 2,750 DKK 1,800 DKK 1,500 DKK Ørestad Yield in % 5.50% 6.25% 7.00% Annual market rent in DKK/sq m 2,400 DKK 1,750 DKK 1,500 DKK Remaining Copenhagen Yield in % 5.50% 6.25% 7.50% Annual market rent in DKK/sq m 3,000 DKK 1,750 DKK 1,000 DKK Western suburbs Yield in % 5.75% 7.00% 9.00% Annual market rent in DKK/sq m 2,500 DKK 1,500 DKK 800 DKK Northern suburbs Yield in % 5.25% 6.25% 7.50% Annual market rent in DKK/sq m 4,500 DKK 2,000 DKK 1,000 DKK North Zealand Yield in % 5.50% 6.75% 8.25% Annual market rent in DKK/sq m 3,500 DKK 1,700 DKK 750 DKK East Zealand Yield in % 5.50% 7.00% 8.50% Annual market rent in DKK/sq m 2,900 DKK1,400 DKK 900 DKK West Zealand Yield in % 6.25% 7.75% 9.75% Annual market rent in DKK/sq m 1,700 DKK 950 DKK 500 DKK South Zealand Yield in % 6.50% 7.75% 9.75% Annual market rent in DKK/sq m 1.600 DKK 900 DKK 500 DKK Odense Yield in % 6.00% 7.00% 8.25% Annual market rent in DKK/sq m 5,250 DKK 2,500 DKK 650 DKK Other Funen Yield in % 6.50% 7.50% 10.25% Annual market rent in DKK/sq m 2,100 DKK 1,250 DKK 500 DKK Vejle Yield in % 6.25% 7.25% 9.25% Annual market rent in DKK/sq m 2,900 DKK 1,500 DKK 750 DKK Kolding Yield in % 6.50% 7.50% 9.25% Annual market rent in DKK/sq m 2,100 DKK 1,200 DKK600 DKK Fredericia Yield in % 7.25% 8.25% 10.00% Annual market rent in DKK/sq m 1,650 DKK1.000 DKK 550 DKK Esbjerg Yield in % 7.25% 8.75% 10.25% Annual market rent in DKK/sq m 2,400 DKK 1,000 DKK 550 DKK Other South Jutland Yield in % 8.00% 9.25% 10.50% Annual market rent in DKK/sq m 1,500 DKK 1,000 DKK 400 DKK Aarhus Yield in % 4.50% 5.50% 7.25% Annual market rent in DKK/sq m 6,000 DKK 2,500 DKK 900 DKK Silkeborg Yield in % 6.50% 7.50% 9.00% Annual market rent in DKK/sq m 2,400 DKK 1,050 DKK 550 DKK Viborg Yield in % 6.75% 7.75% 10.25% Annual market rent in DKK/sq m 2,500 DKK 1,050 DKK 500 DKK Herning Yield in % 7.00% 8.00% 10.00% Annual market rent in DKK/sq m 1,750 DKK 900 DKK500 DKK Aalborg Yield in % 5.25% 6.75% 8.50% Annual market rent in DKK/sq m 4,000 DKK 1,800 DKK 900 DKK Hjørring Yield in % 7.00% 8.00% 10.00% Annual market rent in DKK/sq m 1,400 DKK 750 DKK 400 DKK Frederikshavn Yield in % 7.50% 8.50% 10.00% Annual market rent in DKK/sq m 1,200 DKK 700 DKK 375 DKK
Retail
11 Source: Ejendomstorvet-ED Statistikken, estimates as of Q2 2023
retail space
building
0% 4% 2% 5% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2021 2020 2023 2022 1% 3% Capital Region of Denmark Region Zealand Region of Southern Denmark Central Denmark Region North Denmark Region Denmark, total Selected retail premises for sale/rent – see more at edc.dk/erhverv FOR RENT Kolding • 1.533 sq m • Yearly rent: DKK 1.839.600 www.edc.dk/60301980 › FOR SALE Frederiksberg • 644 sq m • Price: DKK 9.500.000 www.edc.dk/18101139 › FOR RENT Aarhus • 879 sq m • Yearly rent: DKK 2.256.000 www.edc.dk/81100238 › FOR SALE Kalundborg • 1.712 sq m • Price: DKK 14.000.000 www.edc.dk/47401117 ›
Available
as a percentage of
stock Retail
Yield in %, annual market rent in DKK/sq m incl. operating expenses and trends for the next 12 months
Source: EDC International Poul Erik Bech, estimates as of Q2 2023
12 Area Prime Secondary Tertiary Trend Remaining Copenhagen Yield in % 4.50% 5.25% 6.25% Annual market rent in DKK/sq m 1,000 DKK 800 DKK 600 DKK Western suburbs Yield in % 5.50% 7.25% 9.00% Annual market rent in DKK/sq m 700 DKK 550 DKK 400 DKK Northern suburbs Yield in % 5.75% 6.75% 8.00% Annual market rent in DKK/sq m 800 DKK 550 DKK 400 DKK North Zealand Yield in % 6.00% 7.25% 8.50% Annual market rent in DKK/sq m 750 DKK 525 DKK 375 DKK East Zealand Yield in % 5.00% 6.25% 9.00% Annual market rent in DKK/sq m 750 DKK 500 DKK 300 DKK West Zealand Yield in % 6.50% 8.50% 10.50% Annual market rent in DKK/sq m 550 DKK 350 DKK 200 DKK South Zealand Yield in % 7.00% 8.75% 10.75% Annual market rent in DKK/sq m 475 DKK 300 DKK 200 DKK Odense Yield in % 5.50% 6.75% 8.50% Annual market rent in DKK/sq m 550 DKK 400 DKK 250 DKK Other Funen Yield in % 5.75% 8.25% 10.00% Annual market rent in DKK/sq m 500 DKK 350 DKK 200 DKK Vejle Yield in % 5.50% 7.25% 9.50% Annual market rent in DKK/sq m 575 DKK 375 DKK 250 DKK Kolding Yield in % 5.50% 7.50% 9.75% Annual market rent in DKK/sq m 575 DKK 375 DKK 250 DKK Fredericia Yield in % 5.50% 7.00% 8.50% Annual market rent in DKK/sq m 625 DKK 400 DKK 250 DKK Esbjerg Yield in % 7.00% 8.50% 10.00% Annual market rent in DKK/sq m 425 DKK 300 DKK 225 DKK Other South Jutland Yield in % 6.75% 9.25% 11.25% Annual market rent in DKK/sq m 500 DKK 275 DKK 200 DKK Aarhus Yield in % 5.50% 7.00% 9.25% Annual market rent in DKK/sq m 575 DKK 425 DKK 300 DKK Silkeborg Yield in % 7.00% 8.50% 10.50% Annual market rent in DKK/sq m 450 DKK 350 DKK 200 DKK Viborg Yield in % 7.25% 8.75% 10.75% Annual market rent in DKK/sq m 450 DKK 350 DKK 250 DKK Herning Yield in % 7.00% 8.50% 10.50% Annual market rent in DKK/sq m 400 DKK 300 DKK 200 DKK Aalborg Yield in % 6.00% 7.25% 9.00% Annual market rent in DKK/sq m 525 DKK 375 DKK 250 DKK Hjørring Yield in % 7.25% 9.25% 11.00% Annual market rent in DKK/sq m 400 DKK 300 DKK 200 DKK Frederikshavn Yield in % 7.50% 9.50% 11.75% Annual market rent in DKK/sq m 400 DKK 275 DKK 150 DKK
Industrial
13 0% 4% 2% 8% 9% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2021 2020 6% 2023 2022 1% 5% 7% 3% Capital Region of Denmark Region Zealand Region of Southern Denmark Central Denmark Region North Denmark Region Denmark, total Available industrial space as a percentage of building stock Source: Ejendomstorvet-ED Statistikken, estimates as of Q2 2023 Industrial availability Selected industrial premises for sale/rent – see more at edc.dk/erhverv FOR RENT Glostrup • 7.370 sq m • Yearly rent: DKK 4.790.500 www.edc.dk/278820236 › FOR SALE Holbæk • 10.397 sq m • Price: DKK 26.000.000 www.edc.dk/40302318 › FOR SALE Fredericia • 16.089 sq m • Price: DKK 65.000.000 www.edc.dk/60301990 › FOR SALE Holstebro • 4.579 sq m • Price: DKK 20.475.000 www.edc.dk/91206055 ›
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.
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.
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Definitions
