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JUNE |

2020

MARKET Insight


Content

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COVID-19 vs. the market Urbanisation continues to make the housing market attractive Our crowning achievement after 10 years Properties for sale/rent Success for new international division: �The first year has exceeded all expectations� Logistics properties are an attractive investment and more popular than ever New European real estate fund has its eyes on Denmark Sold properties Turn the Market Insight around to read: Market Update The Danish economy Selected transactions Selected lettings Residential rental properties Office Retail Industrial Definitions

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p12 Disclaimer: The Danish version is applicable given any discrepencies between the English and Danish versions.

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p. 26 p. 27 p. 28 p. 29 p. 30 p. 34 p. 36 p. 38 p. 40 2


Dear Reader, The world is constantly getting smaller and the real estate market in Denmark is indeed both national and international. With our 17 nationwide commercial centers close to local activities, we experience the advancement in the Poul Erik Bech-concern. With its national overview, our headquarter is based in central Copenhagen. n con unction with our home base, you will also find our international division, which assists international players on the Danish market and vice versa.

You are probably already familiar with our Market pdate reports. You are now reading first edition of our newest Market Insight magazine that will take you through current topics in the Danish and international real estate market. The magazine is released twice a year with our latest Market Update report on both Danish and English. In this magazine, we will dive deeper into various issues concerning the future segments. The first edition of Market Insight will focus on the project and logistics market. Both markets are in rapid development. Never have as many cranes been witnessed in the process of building new homes at record speed. At the same time, never have there ever been such a need coordinateion of the logistics puzzle – in a time where online shopping and home deliveries are vast prevalent.

With more than 40 years of experience on the Danish real estate market and approx. 200 commercial estate agents distributed across the country, we offer advice in all matters concerning real estate, from Tenant Representation, Buy-side, Valuation, Capital Markets to off-market transactions, we utilize our broad and nationwide list of prospective buyers and manage off-market transactions in a discrete confidential manner.

COVID-19 has turned many things upside down. Thus, this issue’s focus is inevitably on what consequences the pandemic has had for the real estate market – though there is some of unknown factors. We hope that we can get the Danish and international communities up and running quickly – and to do this, the real estate market is an extremely imperative catalyst. Happy reading! Aalborg

Viborg

Silkeborg

Aarhus

Hillerød

Vejle

Herlev Roskilde

Esbjerg Kolding

Slagelse Næstved

Odense Aabenraa Sønderborg

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Copenhagen Køge


COVID-19 vs. the market: How serious will the impact be? ere is a brief overview of what the coronavirus pandemic is likely to mean to the four primary sectors: Office, Residential rental properties, Industrial and Retail. The forecasts are naturally sub ect to a degree of uncertainty, given that Denmark and several other countries have only ust begun to lift their restrictions.

Office receding The rapid spread of the coronavirus pandemic and the subsequent consequences have had a significant impact on the labour market, with many commercial operators struggling to survive. Many businesses currently find themselves dependent on aid packages and salary compensation from the state.

Another likely result is greater interest in shared offices and office hotels, which provide businesses of all si es with additional flexibility in relation to their needs for premises. The tendency for commercial operators to gather in communal offices and benefit from both shared facilities and the exchange of knowledge is therefore expected to continue. However, we expect that the traditional way of organiing office workplaces will continue to be the dominant way of organizing. Within a short space of time, there will be a focus on knowing who to be around in everyday life. At national level, the vacancy rate for office premises in Q1 2020 remains unchanged at 7.6%. There have been some regional changes, however, with the Capital Region and Zealand Region seeing a reduction in the vacancy rate, while the rate in the Region of Southern Denmark and the Regions of Central Denmark has risen. Thus, there will be places around the country where we experience a declining office market.

A number of researchers believe that COVID-19 will have a variety of long-term effects. For example, both employers and employees have come to appreciate the opportunities offered by working from home and in adopting digital solutions that provide a smarter, more efficient approach to some tasks. This is likely to result in greater autonomy, increased efficiency, less time spent commuting and an improved balance between work and family life. Greater focus will therefore be accorded to the concept of flexible offices. In the long term, this will probably mean that fewer square metres will be allocated per employee in offices as workplaces become more flexible and some employers are realising that it may not be necessary to provide a separate desk for each and every employee.

Residential rental properties stable Thus far, the residential market has remained relatively stable during the coronavirus pandemic. There is rising interest in residential properties among foreign, institutional investors and capital funds, where Denmark is viewed as a safe haven for property investments with a high level of rental security. In the search for higher yield, investors are showing more

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Retail negative effect COVID-19 has had a negative impact on the retail sector. Retail sales fell by 2% in March, representing the biggest monthly drop since Statistics Denmark began recording statistics in 2000. We expect rising unemployment for the rest of the year. The clothing category experienced the most significant decline in relation to February, decreasing by a whole 27%. In contrast, grocery shops have seen their turnover increase by 1.4%. The Danish hotel and restaurant sector recorded more than 200 bankruptcies between 1 April and mid-May.

and more interest in properties outside the large towns and cities, where returns are more favourable. Both the market rent and initial yield have generally stabilised and are expected to remain steady over the coming year.

OPEN

It is anticipated that interest in older residential rental properties with low rents will still be high. Even after the government is expected to obtain backing for a proposal to alter Section 5.2 of the Housing Regulation Act (Boligreguleringsloven), as an alteration will result in a natural pricing regulation. Even though the demand is high, everything else will mean falling prices for this type of older rental properties. The change will result in a longer realization of the potential of renovating units in older properties from before 31 December 1991. The proposal, in its present form will entail a uarantine period of five years following change of ownership before the new owner may modernise units and raise the rent (cf. Section 5.2). In addition, the energy mark on the property must at least be a C.

Some investors are cautious about investing in the retail sector, which is experiencing a continuous stream of structural changes on account of mounting pressure from internet trading and changes in preferences among consumers, who are increasingly spending money on experiences rather than tangible goods. This tendency is being strongly amplified by D-19, where sales in physical shops have decreased. It is therefore expected that rental prices will fall and yields will rise.

Industry high demand COVID-19 has had a positive effect on industrial and logistics properties, which are trending upwards, on account of the rise in online commerce and technological development. This has been strongly enhanced by the effect of COVID-19 on the market, where internet trade in particular has risen sharply – even though growth rates were already high. The high demand is primarily focused on new and modern properties with high ceilings, easy access and locations close to essential infrastructure such as highways. It is important that new and modern industry and logistics properties continue to be built as they are in high demand from many enterprises with urgent need. There is thus still a good deal of unexploited potential because there are simply not enough modern industrial properties to meet the high demand.

At national level the vacancy rate for the retail sector in Q1 2020 rose by 0.1 percentage points and now stands at 6.7%, corresponding to 839,000 sq m – the highest level in 1 years, even before the arrival of D-19. The figures to come for Q2 are expected to be heavily affected by the coronavirus pandemic. Many shops have had to change their strategy, many will file for bankruptcy, and we will see an increase in empty premises for which new uses will have to be found. Even though the coronavirus pandemic has encouraged more people in Denmark to purchase take-away meals, restaurants, cafes, and other food & beverage concepts will on a short time basis not be able to absorb the increased available retail space. The development in typical Danish market towns and smaller cities around the country are considered to undergo another downward trend and more stores will be hit by death toll. Both the market rent and yields are expected to come under pressure over the next 12 months, with a slightly decreasing market rent and a gentle rise in required return.

Required return remains high compared with other sectors. There are a number of investors who are extremely interested in investing in modern industry and logistics properties – or building new ones – especially if enterprises are willing to enter into long-term, non-terminable contracts. This can help appreciably reduce the risk for investors. In this context, sale and lease back transactions are especially popular. The share of vacant industry and logistics properties remains stable at 1.9%, equivalent to 1,966,200 sq m, where the primary vacancy rate is to be found among old, unmodernised properties, which testifies to the high level of activity on the market. There are likewise expectations of increasing market rent and decreasing required return in several areas.

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Espresso Park, Rødovre

Urbanisation continues to make the housing market attractive After the impact of the financial crisis in autumn 2008, housing construction was largely stalled, and increasing numbers of people moved to cities, where employment was on the increase. There has also been a growing tendency for families to stay in college towns/cities when they have children. This analysis takes an in-depth look at the pro ect housing market concentrating on Copenhagen, where the population growth in 2030 expects to fall with more than 50%, compared to 2015.

urthermore, the financial situation and the relative pricing between flats and houses are also important. This can be partly explained by the increase in emigration from Copenhagen during the boom leading up to the financial crisis. This phenomenon is also increasing at present, since the prices of freehold flats in openhagen have risen more than the prices of detached and terraced houses in the city’s suburbs, which has made it more attractive for people to move out of the city.

Housing demand is primarily driven by population growth. During the years since the financial crisis, the population of Copenhagen has on average grown by almost 1,000 a month, but that has not always been the case. The graph on the next page shows not only the population growth (the green line), but also the components of the population growth, which have developed significantly over the years. e see that birth surplus defined as number of births minus number of deaths) was negative until 1997 and positive since then. It is clear that the trend has been for the birth surplus to increase over the last three decades. This is due to two factors: 1. Average life expectancy has been increasing, entailing a lower mortality rate at all ages. 2. The City of Copenhagen has been successful in retaining families. In the past, a larger proportion of families moved to the suburbs, when starting a family.

Finally, net international has made a huge contribution to population growth over the past decade. However, there are several signs of declining international immigration, and of workers from the Eastern Europe starting to move back to their home countries. This has diminished the significance of international immigration. In 2019, net international immigration accounted for only 29% of overall population growth, compared to 2 1 , where the figure was ,a significant decline.

Copenhagen and other University cities usually see a strong influx of people in their early 2 s who come to embark on a higher education programme. Usually, these cities also have an emigration rate of about the same size when people in their late 20s and early 30s start a family and move away to the suburbs.

Thus, overall population growth has decreased in strength in recent years. This is also evident in the graph on the next page, which shows the population forecast up to 2045. Here, it is evident that the growth of the total population 6


Population growth in the Municipality of Copenhagen 1989-2019 Number of people 12,500

10,000

7,500

5,000

2,500

0

-2,500

18

19 20

17

Net international immigration

20

16

20

15

20

14

20

13

20

12

20

11

20

10

20

09

20

08

20

07

20

06

Net domestic immigration

20

05

20

04

20

03

20

02

20

01

20

00

20

99

Birth surplus

20

98

19

97

19

96

19

95

19

94

19

93

Population growth

19

91

92

19

19

90

19

19

19

89

-5,000

Corrections

Source: Statistics Denmark

“

It is often mentioned that Copenhagen has a population growth of 1,000 people a month. But from 2015 to 2019, population growth has actually dropped by as much as 21%. At the same time, projections show that population growth in Copenhagen in 2030 will fall by more than 50% compared to 2015.

“

Joseph Alberti, Head of Research, EDC Poul Erik Bech.

to experience how Copenhagen had negative population growth. In the real estate industry, it is often mentioned that Copenhagen has one population growth of 1,000 people a month. Since it peaked at over 11,000 people a year in 2015 by the year 2019, population growth has decreased by 21%. If we also look at the forecast, the projection shows that the population growth in the capital will only grow with 5,000 people per year in 2030, a decrease of more than 50% compared to 2015. This is important to keep in mind when investing and built in the long run.

is declining. If we look more closely at the age groups, we see big differences, with the 20-34-year-old age group expected to fall by 2045. It is different in the case of the 55+ group, which is expected to grow by more than 60,000 people and thereby account for over half of the population growth by 2045. We tend to forget that the development can look different than it is at this moment. We only have to go back to 2005

Our research department supports our customers with tailor-made reports, and we use a data-based approach for the recommendations and advice we provide for our customers or for presentation material for a property or portfolio. Through a high level of analysis, combined with our brokerage expertise, we achieve the the best basis for our recommendations. We publish quarterly market

reports with current market data as well as an annual expectations survey.

Further information

Joseph Alberti, ead of Research, EDC Poul Erik Bech, +45 5858 8564 joal@edc.dk

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Population forecast in Copenhagen, divided into age groups Number of people, divided into age groups

Number of people, total

Total, right axis

0-19 year-old

20-34 year-old

35-54 year-old

20 45

20 44

20 43

20 42

20 41

20 40

20 39

20 38

20 37

20 36

20 35

20 34

20 33

20 32

20 01

20 31

20 30

20 29

20 28

20 27

600,000 20 26

120,000 20 25

660,000

20 24

160,000

20 23

720,000

20 22

200,000

20 21

780,000

20 20

240,000

55+ year-old

Source: Statistics Denmark

The unregistered supply In recent years there has been a considerable amount of sq m converted from offices to residential. o official statistics on this are registered, however, the mayor of Copenhagen, Frank Jensen has previously stated that he estimates that over a third of the new residential space comes from commercial spaces. If we take this into account, there has been an annual oversupply of housing as a whole since 2016 and with expected until 2021. Therefore, contrary to previous estimates, we may see an uptick in residential vacancy in the City of Copenhagen over the next few years.

In the future, we will need far more senior-friendly housing than is available today. This trend applies not only to Copenhagen, but also to Denmark as a whole.

Joseph Alberti, Head of Research, EDC Poul Erik Bech.

Supply vs. demand While population growth is expected to slow down in the coming years, housing construction has reached new heights, as seen in the graph on the next page. In 2019, almost 600,000 sq m of residential construction was completed – a sixfold increase as compared to the years following

the financial crisis. The lack of housing construction during the years following the financial crisis resulted in a ma or lack of housing. 2 1 was the first year since 2 that housing supply exceeded housing demand on an annual basis.

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Housing demand relative to housing supply Total sq m 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000

Demand

Supply

Estimated supply

* 21 20

* 20 20

19 20

18 20

17 20

16 20

15 20

14 20

13 20

12 20

11 20

10 20

09 20

08 20

20

07

0

Conversion of business to housing

Source: Statistics Denmark and EDC Poul Erik Bech Note: The conversion of business to housing has been calculated as 50% of the comleted housing construction since 2014.

“

The annual supply of housing currently exceeds present housing demand but the question is; will we see vacant housing in Copenhagen?

“

Joseph Alberti, Head of Research, EDC Poul Erik Bech.

We can see the effect of the change in the graph below from the distribution of dwellings on the basis of size for 10,000 sq m of residential construction in two sizes of dwelling: 50 sq m and 95 sq m. In the example below, we can see that the new model results in twice as many small dwellings of 50 sq m.

On the political front, the City of Copenhagen has decided that of floorage is exempt from stipulations on average housing size, according to the 2019 municipal plan. 50% of the floorage will be used for dwellings of an average si e of 9 s m. reviously, 2 of floorage was exempt from the stipulations on average housing size. In addition, the smallest si e of dwelling has been fixed at s m, and in urban development areas no less than 40 sq m, where the respective minimums were previously 65 sq m and 50 sq m.

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The importance of Copenhagen’s 2019 Municipal Plan for the number of small homes

acancy of off-plan housing in Copenhagen classified according to size

Total housing

30%

120

25%

100

20%

80

15%

60

10%

40

5%

20

0% 0-49

0 50 sq m

50-74

75-99

100-124

125+

95 sq m Size of leased property

Previous model (urban development area)

Average vacancy

New model (entire city)

Source: EDC Poul Erik Bech. Note: Based on 4,499 rental leases. Source: EDC Poul Erik Bech

The same trend is also evident in other cities: for example, Aalborg. It is apparent that the vacancy rate is above average in the two major size categories.

The new model enables developers to build twice as many small homes as before. This is important, since there is the greatest growth and also the greatest demand among singleand two-person households.

acancy of off-plan housing in Aalborg classified according to size 15%

10%

If we look closer at the data compiled on the basis of the latest completed projects, it becomes clear that the smaller flats below s m are the most popular among tenants. The vacancy rate, on the other hand, rises substantially when we look at the larger housing units, which on the whole are more expensive to rent.

0%

Housing in Copenhagen compared to our Nordic neighbours

As an investor, you have to be careful about building too many larger rented properties, since those properties are more difficult to rent out than small properties.

5%

Joseph Alberti, Head of Research, EDC Poul Erik Bech.

0-49

50-74

75-99

Size of leased property

100-124

Average vacancy

Source: EDC Poul Erik Bech. Note: Based on 1,108 leases.

In an international context, house prices in Copenhagen continue to be low. In the 4th quarter of 2019, the average price for a freehold flat in openhagen was DKK 40,664 per sq m. In comparison, the average price in Stockholm is DKK 51,181 per sq m, and DKK 54,221 per sq m in Oslo.

Joseph Alberti, Head of Research, EDCPoul Erik Bech.

Similarly, investors also get a higher return in Copenhagen, where primary residential rental properties are traded at a return of 3.50%, where in Oslo they trade at 2.75% and in Stockholm 1.75%.

Regardless of what they future might hold, the housing market will continue to be a very attractive investment object from an investor’s point of view. Prices may stagnate as a result of a recession or new tax policy measures, but urbanisation is a mega trend and more people will move to the largest cities. 10


CURRENT PROJECTS 114 rental properties

42 rental properties

teborg All 5, 8200 Aarhus N • 1-3 room apartments • 34-76 sq m • Rents: DKK 1,631/sq m per month • Rental status: 102 leased • Contact: +45 2311 8757

boulevarden 80, 8000 Aarhus • 1-3 room apartments • 37-73 sq m (size targeted students) • Rents: DKK 1,833/sq m per month • Rental status: Fully leased • Contact: +45 2311 8757

176 rental properties

71 rental properties

Teglbyen, A.C. Meyers Vænge 12, 2450 Copenhagen. • 2-7 room townhouses and apartments • 64-167 sq m • Rents: DKK 1,653/sq m per month • Rental status: 161 leased • Contact: +45 5858 7436

Pentapart, Alliancevej 9, 2450 Copenhagen. • 2-5 room apartments • 64-180 sq m • Rents: DKK 1,766/sq m per month • Rental status: Fully leased • Contact: +45 5858 7436

427 rental properties

57 rental properties

Sofiendalen, Anna Anchers Vej, 9200 Aalborg • 2-5 room townhouses and apartments • 61-154 sq m • Rents: DKK 1,025/sq m per month • Rental status: 125 leased • Constructed in 8 stages • Contact: +45 6161 7129

Skøjtehaven, Samsøgade 45A, 9000 Aalborg • 2-3 room apartments and student residences • 50-87 sq m • Rents: DKK 1,267/sq m per month • Rental status: 30 leased • Initial yield: 4.43% • Contact: +45 9631 4000

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Our crowning achievement after 10 years DC Poul rik Bech recently brokered the sale of Saint- obain’s site on Sdr. Ringve 27 in Br ndby to CASA, who will be building 460 sustainable rental homes in cooperation with an investor. DCPoul rik Bech has been involved from the outset in developing the pro ect and the area, including two local development plans and a development plan for the entire municipality.

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CASA will be building more than 460 rental homes totalling 37,500 sq m on the site of Sdr. Ringvej 27 in Brøndby in close cooperation with a future investor. Torben Modvig, of ASA, expects the pro ect to break the first ground in September 2 2 , and that an investor will be finally secured during the coming months. “We have a really good dialogue with a number of investors and we are close to landing an agreement, so we expect a clarification and some sort of tender process soon, as more investors are at stake. It is a super attractive project with 460 affordable residential rental properties with an average size of 80 sq m with most of them being one- or two-bedroom apartments, but also a few three- or four-bedroom apartments”, says Torben Modvig and continues: “It is also a good municipality and a great location close to both the S-train station and the future light rail, so we are very pleased with the project. Low-risk and secure investment On the status of the project in these corona times, he says: “Residential rental properties with affordable housing is a safe investment in these somewhat uncertain times. After all, people still need a place to live, and therefore, it is only an advantage that rental property is affordable, so we see it as a low-risk investment. Within the real estate sector, this is probably the category least affected by the corona crisis”. The next site is next to another site that CASA is developing on Sdr. Ringvej 33. Here, we are constructing 16,500 sq m divided into approx. 200 homes. This site is also being developed in close cooperation with an investor. Patience is a virtue It was 10 years ago that EDC Poul Erik Bech’s two project brokers Carsten Tungelund and Peter Wassard together with Saint-Gobain started developing the area. Back then, the idea was to construct office buildings but, since then, the market changed. It was Peter Holten-Jensen, project manager for Development & Sales in EDC Poul Erik Bech, who got assigned to the task of changing the project into a residential pro ect five years ago. “Of course, it is extra satisfying and a crowning achievement that we managed to complete this extensive project after it had been on-going for so many years. As is often the case in lengthy processes and large projects, there are bound to be several potential buyers in the running. In particular, a strong and fast decision-making process was decisive as to who bought and, actually, the sale took less than a week when things got in motion and the land came up for sale”, says Peter Holten-Jensen.

Further information Peter olten- ensen, Project manager for Development & Sales, EDC Poul Erik Bech +45 3330 1035 • phj@edc.dk 13


FOR SALE Conference centre in scenic surroundings

Kobæk Strand Konferencecenter is owned by Finansforbundet and Forsikringsforbundet and with its unique and attractive location in Skælskør, the municipality of Slagelse, it is located close to the shore line with lovely beaches and a newly built etty. t is well-managed and has good financial ratios and a return of 9.58%.

For sale: Hotel & Restaurant Address: Kobækvej 85, DK-4230 Skælskør Area: ,91 s m floorage

Price: DKK 55,000,000 Case number: 47400520 Contact: +45 4032 4426

Portfolio with a well-known landmark

Large storage and production facility

The property portfolio consists of 63 residential leases and 16 business leases, including the town’s well-known landmark, the protected building Skælskør Dampmølle from 1853. The portfolio is located in a growing municipality and is attractive to investors who want a large number of properties distributed in a close community at a favourable price and an initial yield of 7.04%.

A well-maintained, well-located property with many possible applications is up for sale in the old industrial town of Randers. Reasonable distribution of s m of offices and storage and good opportunities to divide the property into several leases. An initial yield of 8.79% and a low price per square meter of DKK 2,747.

For sale: Property portfolio Address: Vestergade 1 and 3 DK-4230 Skælskør Area: 9,1 s m floorage Price: DKK 76,750,000 Case number: 47400599 Contact: +45 6172 3317

Project site surrounded by green areas

67 condominiums in a new district

The first residential properties in the new, green district of Sporbyen Scandia will be ready to move in this autumn. The homes will have small gardens on the ground floor and large sun-oriented balconies with a beautiful view of Randers ord on the remaining floors. The area offers attractive housing, sports facilities and, over time, shops, cafes and much more.

For sale: Storage and production facilities Address: Clausholmvej 23, DK-8960 Randers Area: 2 , 1 s m floorage Price: DKK 56,500,000 Case number: 89900045 Contact: +45 2630 8878

In Western Silkeborg, the client-consultant and development partner – Kuben Management, will over the coming years be funding the development of ”Sejlgaarden”. The area covers a total of 1,1 mil. square meter land and the plans concerning the area is to create a diverse development area. The aim is to establish subareas with different housing typologies as well as green areas. The development area, Sejlgaarden, is beautifully located in a hilly landscape sloping to the south. The area is surrounded by Fredskov and has a few minutes drive to the Silkeborg highway.

For sale: Condominiums Address: Scandiasporet and Skiftesporet, DK-8930 Randers Area: 66-175 sq m Price: DKK 1,475,0004,750,000 Contact: +45 2123 3703

For sale: Project site Address: Skærskovhedevej 3, DK-8600 Silkeborg Contact: +45 2311 8757

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Area: 3,000-8,000 sq m building rights per sector Price: DKK 2,000 sq m building rights


FOR SALE 42 exclusive condominiums

Newly built three- or four-bedroom condominiums in the award-winning housing project Koldinghave in beautiful green surroundings in the heart of Kolding. The apartments are well designed and are characterised by luxurious Danish design, quality, optimal sun conditions and a fantastic location.

Attractive logistics property in Slagelse

For sale: Condominiums Address: Koldinghave DK-6000 Kolding Area: 82-159 sq m Price: DKK 2,795,0004,995,000 Contact: +45 2679 2047

New and modern property with warehouse facilities. High ceilings and a nicely decorated office section and well-equipped staff facilities with locker rooms and a lunch room. There is a large outdoor area and good loading platforms, making it suitable for a wide range of logistics and production companies.

For sale: Logistics property Address: Trafikcenter Allé 30, DK-4200 Slagelse Areal: .911 s m floorage Price: DKK 24,950,000 Case number: 47400134 Contact: +45 5360 5181

FOR RENT

121 new architect-designed residential leases

The apartments offer affordable rents and a wonderful location close to Aarhus C and the countryside. Here, you can get both one-, two-, three- and four-bedroom homes. It is a beautiful architect-designed property, and some apartments have their own roof terrace.

For rent: Residential unit Address: Søren Frichs Vej, DK-8230 Åbyhøj

Area: 46-123 sq m Price: DKK 8,100-13,200 per month Contact: +45 2311 8757

46 senior-friendly homes in Frederiksberg

76 residential leases overlooking Oresund

Two- to five-bedroom, low-energy rental homes designed to respond to the future residents’ declining mobility. The homes offer a shared roof garden with an orangery and room for a vegetable patch, barbecue area bonfire places in the courtyard and a 1 sq m communal space. Focus on safeguarding the community and creating security, so that you feel at home, and everyday life is as easy and convenient as possible. Many details designed with senior citizens in mind.

Project no130 consists of well-situated, extravagant two- to five-bedroom architect designed apartments in a central location close to the city and with fantastic views. The apartments are bright and modern with high quality rooms. They have either a large balcony, a terrace or a roof terrace. Move-in ready in July 2020.

For rent: Residental units Address: Bernhard Bangs Allé 17a, DK-2000 Frederiksberg

For rent: Residential unit Address: Amager Strandvej 130, DK 2300 Copenhagen S

Area: 76-138 sq m Price: DKK 13,500-22,800 per month Contact: +45 2033 0021

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Area: 54-175 sq m Price: DKK 12,000-29,950 per month Contact: +45 2345 2775


Success for new international division

“The first year has exceeded all expectations” Due to strong growth in the number of international customers, Denmark’s largest real estate company, DC Poul rik Bech, established an independent unit a year ago that is mainly dedicated to exclusively serving international investors and companies, including Danish companies wanting to establish activities abroad.

There is nothing new when it comes to EDC working with international customers, but what is new is that the company has a dedicated international division. Helle Nielsen Ziersen, Partner and Head of International Relations in EDC International Poul Erik Bech, says:

a direct and professional service and they get day-to-day answers, so they don’t feel like they are just ending up in a pile of papers on a desk. Opening hours of the international division have been extended, so we will not lose a day due to time difference”.

The first year has exceeded all expectations. e have many activities, and the clients have come to realize that we have a dedicated division that exclusively caters to international investors and companies. Over the years, we have built up a strong network of foreign investors and partners, so we did not start up only a year ago, but we have succeeded, in a short space of time, in branding ourselves as a more international company and the number of projects is continuously growing”.

Cooperating with one of the world’s largest players One of the things that the international division of EDC Poul Erik Bech also has had success with is the cooperation with one of the world’s largest real estate companies, Jones Lang LaSalle (JLL), which generated sales in 2019 of more than DKK 123 billion and has 92,000 employees in over 80 countries. “Since May 2019, we have had a great cooperation with JLL, where we have completed a number of projects across borders. We also pass on projects and Danish customers to ’s offices, so it goes both ways. Among other things there are several Danish investors looking into the markets outside of Denmark now. Our largest project with JLL so far has been to act as brokers for the sale of a logistics portfolio in Sweden for a nine-figure sum says Helle Nielsen Ziersen.

“The foreign customers have a different approach than the Danish ones, and as a consultant you should be able to put yourself in the customer’s place, no matter where the customer comes from or what the customer’s prior knowledge is. Like with all other jobs, it is crucial to the results that we provide dedicated efforts, so that our customers receive

16


Further information elle Nielsen Ziersen, Partner, Director, Head of International Relations, MRICS, MDE EDC International Poul Erik Bech +45 5858 8563 • hni@edc.dk

We are currently working with JLL on many projects in all property segments. Meanwhile, our Research department has contributed to a number of reports and has prepared custom analyses for JLL and foreign customers. We also find that more and more Danish investors want to buy or rent properties abroad, and we can also assist them with that through JLL”.

She has just celebrated her 10-year work anniversary at EDC and continues: “Just like with many of our other customers, we mainly solve tasks such as Tenant Representation, Buy-Side (buying advice), Valuation, Capital Market and in particular off-market transactions, where we handle off-market transactions in a discreet and confidential manner through our broad network and our nationwide list of prospective buyers/tenants”.

For example, in February 2020, the report ‘JLL Nordic Outlook – spring 2020’ was published about the Nordic property market, to which EDC contributed with the Danish part of the market. In that connection, an after-hours meeting was held in Copenhagen in cooperation with JLL.

Nationwide and local knowledge EDC International has many projects all over Denmark, but where EDC differs from its counterparts is that it is the only nationwide commercial real estate company. Helle Nielsen Ziersen says:

Helle Nielsen Ziersen concludes: It is also no surprise that we, together with JLL, are now analyzing expectations of what the world will look like on the other side of COVID-19, because we will see changes in Denmark as well as the rest of the world. We do not wanmt to draw a gloomy picture, but it is a picture of a changing world.”

“Local knowledge is important, and in the cases where we cooperate with , we can clearly see the benefits of being a nationwide company. It is far from just a Copenhagen-based cooperation, since approx. one third of the cases have been outside the metropolitan area.

Sample of ongoing cases nvestor search tasks residential and office DKK +200 million • Valuations across the country • Search tasks logistics, sale & lease back along highways DKK +100 million • Buy-side advice and due diligence DK/Europe • Buy-side advice and due diligence DKK 1,5 billion • Search tasks off-market • Rental North Zealand • Tenant Representations in Copenhagen, Ballerup, Vallensbæk, Lyngby and Køge • Valuation and project consulting in connection moving • Valuation and possible sale of Danish owned property in Finland • Search for Danish-owned properties in Sweden • Research and analysis for international customers

17


Logistics properties are an attractive investment and more popular than ever ven before the corona crisis, logistics properties were very popular with very low idle rates. Rapidly growing online trade, which is speeding up further with the corona crisis, means that logistics properties will continue to be an attractive investment in the future.

1. Consumer growth – driven by growth in populations, employment and wages – is the primary driver of the increase in demand for logistics properties. 2. Geographic positioning along global trade routes can also affect the formation and growth of logistics clusters. For example, regions where several means of transport are concentrated: motorways, train stations, ports or airports represent advantageous locations for logistics clusters. 3. Finally, we have the modernisation of supply chains. As retailers, manufacturers and distributors adopt new business models, such as e-commerce, they consider how their products are most conveniently transported from factory to consumer. This leads to construction of logistics properties in central areas – i.e. closer to large concentrations of consumers or to vital distribution areas.

ogistics properties can be defined as large warehouses that are used for storage, order picking and distribution of goods. Logistics properties are similar to warehouses, but are often larger properties, and they should typically be able to handle higher volumes of traffic than traditional warehouses. A typical logistics property could be a “last-mile” distribution centre. These are typically located close to major cities, so that the products ordered by the customer can be delivered the same day, either directly to the customer or to a package store or a shop. In addition, there are larger logistics centres, so-called fulfilment centres, which are used for long-term storage and from which the goods are delivered to last-mile distribution centres. ulfilment centres will typically be located close to the highway and, furthermore, they will typically be concentrated around other logistics properties. Logistics clusters are springing up Over the last two decades, we have seen clusters of logistics properties springing up in different parts of the world. The clusters first turned up in orth America and, as their benefits became apparent, they spread out all over the world. The growth of logistics property clusters is driven by three main factors:

In Denmark, we clearly see that logistics properties are based in different clusters across the country. Large clusters are concentrated just outside of Copenhagen by Ring 3, as well as along the Køge Bay Motorway, but there are also several clusters around Fredericia, Horsens, Vejle and Aarhus, along the Eastern Jutland Motorway. In Denmark, there are currently 103 logistics properties with more than 10,000 sq m within 2 kilometres of a motorway. On the next page, you can see the spread across the different cities:

18


The distribution of logistics properties over 10,000 sq m within 2 kilometers of a motorway

Further information

oseph Alberti, Head of Research, EDC Poul Erik Bech, +45 5858 8564 • joal@edc.dk

Source: EDC Poul Erik Bech

Online consmption in Denmark since 2012 Billion DKK 200

All the properties are over 10,000 sq m and have the appraisal usage “Factory and warehouse” in the Danish Building and Housing Register. Subsequently, all properties have been manually reviewed using Google Maps Street View to examine access conditions and number of gateways. Finally, companies that are located on the property have been studied in terms of what activities they are engaged in.

150

100

50

Logistics properties and global trade Trade is the driving force of the global economy and logistics is the often overlooked interconnected infrastructure that allows products to reach consumers faster and cheaper. Logistics properties – warehouses, distribution facilities and fulfilment centres are at the centre of this constantly growing and sophisticated distribution system. The importance of logistics properties in relation to global trade and the underlying trends driving demand and change make logistics properties an attractive business.

0 2012

2013

2014

2015

Online consumption

2016

2017

2018

2019

2020*

2021*

Estimated online consumption

Source: FDIH and EDC Poul Erik Bech

son. During the current corona crisis, where shopping malls and high streets have been closed down and the population is following guidelines on social distancing, online commerce can only be expected to gain even more momentum across the board.

ogistics properties have benefited from the growth in online commerce, which continues to grow year on year. In Denmark, 2019 was yet another record year, as turnover increased by 13% and came close to DKK 150 billion. In 2020, even higher growth is expected, as the trend towards online trade is accelerated by the corona crisis.

From an international perspective, Denmark is one of the countries where most people shop online. 84% of the population aged 16–74 years have traded online over the last 12 months, which is more than any other European country except for United Kingdom.

Along with the increasing use of the Internet and the improvement of security standards, consumers appreciate the opportunity to be able to shop anytime and anywhere, with access to a wide range of products and easy price compari-

19


Percentage of individuals 100 90 80 70 60 50 40 30 20 10

m do

m

ng

en D

Ki ite d Un

a Sw rk ed en N N orw et he ay rla nd Ic s Sw elan d itz er la Ge nd rm an Fi y Lu nla n xe m d bo ur Fr g an c Es e to ni Ire a la n Be d lg iu Cz m ec hi Au a EU str av ia er a Sl ge ov ak ia Sp ai n M al Sl ta ov en i Po a la nd H un g Li ary th ua ni a La tv ia Cr oa tia Gr ee c Cy e pr Po us rt ug al Ita ly Se rb ia Bo Tu sn rk ia e an Ro y d m H a er ze nia go vi n Bu a lg M on ari a te ne gr o

0

Source: Eurostat

Logistics properties as investment targets For investors, Denmark is an attractive country to invest in, as there is often a higher return premium compared to investing in our neighbouring countries. This is due to the fact that the logistics property market has traditionally been less developed than, for example, in Sweden or Germany, where they cover substantially larger areas. During recent years, international investors have really become aware of the Danish logistics market. For example, W.P. Carey entered the Danish market in 2018 when they acquired the

property portfolio of Danske FragtmĂŚnd for DKK 1.3 billion (read more on page 22) and, most recently, in April 2020, lackstone purchased five logistics properties for approx. DKK 1.6 billion as part of their logistics fund. Yield requirements have been declining gradually in recent years, and we expect this trend to continue and to be amplified, both as a result of changing purchasing habits with the corona crisis and as more international investors become aware of Denmark. 20


Prime return on logistics properties for selected cities in urope per 31.03.2020 Oslo 4.88%

Stockholm 4.50% Gothenburg 4.50%

Aarhus 6.00%

Copenhagen 5.00%

Amsterdam 3.90% Hamburg 3.75%

Paris 4.00% Source: JLL, Ankershus Eiendom and EDC Poul Erik Bech

21

Berlin 3.75%


New European real estate fund has its eyes on Denmark Two years ago, in his role at the time as uropean head of .P. Carey, Arvi Luoma bought Danish freight halls for over DKK 1 billion with the help of DC Poul rik Bech. Now, the Finn has founded an investment company with R 1 billion in the kitty, and the Nordic countries are on his radar. One of his main points is that, in his eyes, Denmark is under-supplied with well-designed, modern logistics property.

In the spring of 2020, after 14 years with W.P. Carey, he founded his own company, Blackbrook Capital, together with American Gordon DuGan, who had served as CEO in W.P. Carey for a while. Backing them, they have the huge U.S. investment company Eldridge Industries, and from the get-go, Blackbrook Capital has at its disposal EUR 1 billion or approximately DKK 7.5 billion. “The money can be invested in many countries, for example the Nordic countries, the UK& Ireland, Poland, the Czech Republic and, of course, in larger established markets such as Germany, France, and Spain”, says Arvi Luoma.

In the summer of 2018, Arvi Luoma appeared in Danish real estate and business media. As the European director for the U.S.-based company W.P. Carey, who mainly invest in sale-leaseback properties, he wrote a cheque for DKK 1.2 billion and took over a number of freight centres, which are used by Danske Fragtmænd. The transaction took place off-market and was brokered by EDC Erhverv Poul Erik Bech (see box, editor’s note). Now, the Finnish Luoma has been given a new, weighty role in the European real estate industry. As an engineer from Oxford University, he landed a job in 2003 at BMW’s large Mini factory on the outskirts of the university city. From there, he moved on to the London branch of the Swiss UBS bank, and then he went home and reported for military service in inland, where he now serves as a reserve officer in the Navy. In 2006, he returned to London with a job in W.P. Carey.

Nordic benefits The Nordic countries individually are not the largest of markets, but from Blackbrook’s point of view, they have several positive common features: “They have well-functioning legal systems, their economies are stable, and they have stable political systems. It is easy to run a business, they have efficient real estate markets and, also, there is

One of the world’s largest real estate funds has come to Denmark ith the acquisition of a nationwide logistics portfolio amounting to DKK 1.2 billion in uly 2018, the American company .P. Carey appeared on the Danish real estate scene. At the time, DC Poul rik Bech presented the portfolio to the buyer, and represented the buyer during the negotiations between two international players.

Carey, the responsibility for the Nordic market currently lies with Director for International Investments, Karolis Adlis). The portfolio includes the well-known Danish company, Danske Fragtmænd. “I have been in touch with W.P. Carey for a number of years, and know their investment profile and demands. hen initiated the dialog with the seller, Standard Life, through Capital Investment and was introduced to this off-market opportunity, there was no doubt in my mind. I said I only needed to present the portfolio to one buyer. It turned out to be true”, says Helle Nielsen Ziersen of EDC Poul Erik Bech. She continues:

“Denmark’s industrial real estate market is acutely under-supplied, so acquiring a triple-A logistics portfolio, leased to one of the country’s top logistics companies was a rare and compelling opportunity”, says Arvi Luoma, at the time Head of European Investments, W.P. Carey (at W.P.

“It is a crucial prerequisite for such a transaction that you have a thorough knowledge of your customer’s investment profile and are selective on its behalf. oreover, you must be able to handle the special set-up that exists when international players’ specialists around the world need to be involved. When we talk about off-market transactions, it is a requirement of either or both parties that the negotiations take place in confidentiality and that the properties do not by definition appear in the prevailing real estate market .

22


ho’s ho Arvi Luoma • Co-founder, CEO of Blackbrook from March 2020. • Head of European Investments at W.P. Carey i London 2006-20 • MEng from Oxford University eserve officer in the innish avy

Blackbrook Capital ong-term real estate investor with offices in ondon • Founded in 2020 by Arvi Luoma and Gordon DuGan Affiliated with the .S.-based ldridge ndustries • Capital of DKK 7.5 billion. • Focused on i.a. logistics and light industrial • Geographic focus on Europe. Sees several strengths related to the Nordic countries

Blackbrook Capital has a three-pronged philosophy of buying property with existing tenants, building new property, tailor-made for businesses that become tenants, and conducting sale-and-lease-back with companies that own their premises but would like to free up capital.

virtually no corruption”, Arvi Luoma continues. His own home country benefits from being part of the uro, while Norway and especially Sweden have quite large commercial property markets. “The Danish Krone, on the other hand, is pegged to the uro, and at the same time, Denmark has an efficient bond-based financing system, such as in Germany. This ensures attractive financing and, although we usually invest initially on an all-cash basis , it is an advantage for us that we have the opportunity to use cheap local refinancing. n addition, the Danish property market has attracted many international investors in recent years”.

Important to have local experts With most of Europe as an investment area, Arvi Luoma stresses the importance of having good contacts locally. “It is very important for us to talk to local agents who have a good network, follow local trends and pick up interesting investment opportunities, such as off-market deals. For the first couple of months, ’ve had over 1 phone calls with agents in several different countries. In Denmark, for example, EDC has deep insight into what is going on, not only in Copenhagen, but throughout the entire country”.

However, Arvi Luoma can also point out a downside to Denmark: “Legislation is quite tenant-friendly and, therefore, you do not have quite the same control over your properties as in other countries, but documentation is likely, over time, to adapt to the standard in the rest of Europe”.

Helle Nielsen Ziersen, Partner and Head of International Relations in EDC International Poul Erik Bech, says: “We are really excited about working with Arvi Luoma and we look forward to working with him in the new setup at Blackbrook Capital, and we wish them all the best. Of course, we hope we can help them find the right investment properties in relation to their investment profile in the future .

ide range of investments Blackbrook Capital have opted out of residential property but, apart from that, they will consider a wide range of investments in logistics/warehousing, light industry, cold storage, hotels, hospitals nursing homes, offices and retail. The main emphasis will probably be on logistics/ warehousing and light industrial But Arvi Luoma points out that even some of the segments that are currently facing challenges might be interesting.

Investing in brick and mortar throughout the kingdom While some international investors prefer properties in Greater Copenhagen and perhaps Aarhus, Arvi Luoma also likes to invest in brick and mortar in other parts of the queendom. Decisive factors include: location, e.g. close to the motorway network for logistics properties and, not least, the financial strength of the tenant.

“Retail is under pressure from online retailers but, for example, large DIY stores have proved to be quite robust in relation to financial fluctuations. Hotels are hard-pressed by the corona crisis with closed borders, but we are a long-term investor, and people are bound to start traveling again at some point. In general, we prefer long-term leases and, for offices, it will be especially interesting to enter into lease agreements with public authorities”. Investments in hospital buildings and nursing homes will be particularly prominent in countries with a tradition of private operators in these fields, such as the K and Sweden.

Karolis Adils, Director for International Investments, .P. Carey states: “W.P. Carey has been investing in the Nordic countries since 2 1. e made our first investment in the Danish market in 2018 with the acquisition of the property portfolio from Danish Freight Forwarders. Since then, we have made several acquisitions, so we now hold assets for nearly $ 1 billion in the region. Despite the present uncertainties, we still consider the Nordic region as an attractive region to invest

Arvi Luoma sees special potential in the fact that, in his eyes, Denmark is under-supplied with well-designed, modern logistics property. However, he hesitates to say when Blackbrook apital is going to make its first investment here in Denmark. “It depends on when the right investment opportunities arise. But we expect to have invested the contributed capital in three to five years .

in. As we have the skills and patience to have a long-term investment horizon, we maintain our investment strategy. As an experienced investor, who invests exclusively in equity and has a cash portfolio of nearly $ 2 billion, we can allocate the capital and security required by the companies that are forced to close. As a long-term capital owner, we are also aware of any future opportunities that can help our tenants’ ongoing business development. ”

23


SOLD All 240 apartments in sterlunden in Odense have now been rented out

The final stage with apartments of the Topdanmark construction in the dense district of sterlund has been completed, and all 2 pro ect apartments have now been rented mainly to young first-time tenants. The four stages have been rented out according to plan and on schedule. n early 2 19, the first stage of the renting of the first apartments in sterlunden was kicked off. n April 2 2 , the last and fourth stage was completed, and all 240 apartments are now rented out. Flemming Bæk Engelhardt, CEO of TopDanmark Ejendomme, states: e are very pleased with our investment in sterlunden, and we are happy that all apartments are now rented out exactly on schedule. ne thing is to plan for renting out 240 homes in Odense. Another is to implement it with a well-designed plan and to ensure that the construction hits the market with the right pricing in relation to the quality of the construction. It has certainly been successful in excellent cooperation with EDC Poul Erik Bech.” “EDC has managed to create the right awareness of the project. From media coverage to successful open-house events where people have flocked to attend, and people have even ueued up to see the homes, so we’re excited about the great interest . Contact: Morten Nancke, Partner, Real state Agent, MD , DC Poul rik Bech Odense, 45 5858 7392, mna edc.dk

85 newly built youth residences in N rrebro sold

People are queuing for youth housing. For the same reason, we had no issues renting out 85 new youth residences with a prime location on Sigurdsgade 27 and 31 in Nørrebro. The development company Mäckler Group is behind the youth housing, which they, with the help of EDC Erhverv Poul Erik Bech, have sold to the asset manager Formuepleje. The building contractor “Sigurd 27”, the development company behind the Mäckler Group is behind, has sold the youth housing project to Formuepleje early this year. Investor and developer Finn Mäckler from the Mäckler Group says: e have cooperated with D oul rik ech over many years and we have always been very satisfied with our cooperation. e have always had a really good relationship before, during and after the completion of projects. No matter what department we have been working with, it has always worked impeccably. This has certainly also been the case with this project for the 85 youth residences, where quite early on, Knud Egehoved and EDC found a buyer in the form of Formuepleje who took over the project”. Knud Egehoved, Real Estate Agent at EDC Erhverv Poul Erik Bech, says: “There is no doubt that youth housing is high on the agenda among the country’s students in all the major educational cities in Denmark – and as an investment project, it is certainly no problem renting out the homes. e are obviously very pleased that we were able to find a buyer uickly for these beautiful, newly built youth residences in rrebro . Contact: Knud gehoved, Real state Agent

Diploma of aluation, MD , DC Poul rik Bech K benhavn, 45 3330 1031, keg edc.dk

24


SOLD 15,000 sq m logistics property in asselager has now been sold to a local investor

ÅF Transport has sold their striking logistics and warehouse property on Alstrup Allé 11 – 15 in Hasselager to the local investor Ejendomsselskabet Vejlevej. Anker Olesen is the CEO of Ejendomsselskabet Vejlevej, who invest in warehouse and logistics property and operate locally. He explains that they found the property extremely attractive for several reasons: “Industrial properties generally have higher yields than residential rental properties. It is also a big plus that it is situated locally, close to the highway, and the warehouse has high ceilings and many docks and gates, which is in high demand”. Up until now, the transport and logistics company ÅF Transport has been the owner of the striking logistics and warehouse property. As the sale was part of completely winding down the company, a quick sell was also needed, says Mogens Madsen, CEO of ÅF Transport: e have been very satisfied with D rhverv oul rik ech’s effort to uickly find a buyer at the right price. Generally, there were only a few viewings before the right buyer was found. This ust goes to show that D rhverv oul rik ech’s strategy of finding a buyer in their local network produces results”. Contact: Mads B errum Christensen, ead of Industrial, DC rhverv Poul rik Bech Aarhus, 45 5858 8181, madchr edc.dk

D

endomme has sold a plot of land close to the new super-hospital in K ge

After three years on the market, HD endomme has now finally sold their land in K ge by changing to a business estate agent, who was able to think out of the box. The land is located by the new super-hospital and is very well suited for healthcare purposes. EDC Erhverv Poul Erik Bech arranged the sale of the property, after taking over the case from another real estate agent. In spite of the plot’s many possible applications and potential, the property on Lykkebækvej 8 in Køge was for sale for three years, after which EDC Erhverv Poul Erik Bech took over the case from another real estate agent. Kenneth Wagner, Partner and Business Estate Agent at EDC Erhverv Poul Erik Bech, initiated a strategy to promote the sale. After scrutiny of the local development plan and rethinking alternative uses, the land was quickly sold. Bjørn Kirkegaard, Business and Portfolio Manager of HD Ejendomme, states: e put the property up for sale, as it did not strategically fit into our portfolio. After a lengthy sales process, we had the opportunity to try new approaches, a process that EDC Erhverv Poul Erik Bech has been very helpful with. In the start-up phase, they provided good inputs for alternative procurement procedures for the sale of the land. This meant that not only did plot of land sell quicker, it also sold 20% above asking price when EDC thought out of the box. So the process has been great and with excellent communication”. Contact: Kenneth

agner, Partner, DC rhverv Poul rik Bech Roskilde, 45 5858 7548, kew edc.dk

25


MARKET Update


The Danish economy

Annual GDP growth

Employees Mill.

6

2.8

4 2

2.7

0 -2

2.6

-4 -6

2.5

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021*

2010

2011

2012

2013

2014

2016

Employees

Estimated growth rates

Growth rates

2015

2017

2018

2019

2020

Source: Statistics Denmark

Source: Statistics Denmark and EDC International Poul Erik Bech

Sharp decline in 2020 expected GDP in Denmark is projected to contract sharply in 2020 and rebound in 2021 according to the median of forecasts. It should be stressed that the rebound is dependant on an unwinding of the COVID-19 containment efforts.

Future decline expected The number of employees continued to rise; however, it should be noted that the latest data is from February, and thus does not take the effects of COVID-19 into account, where unemployment has risen by approx. 50,000 people.

Interest rates

Consumer confidence indicator

4.00

20

3.00

10

2.00

0 1.00

-10

0.00

-20

-1.00 2010

2011

2012

2013

2014

Short interest rate

2015

2016

2017

2018

2019

2020

2010

10-year tresury bond

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

onsumer confidence

Source: Statistics Denmark and Finance Denmark

Source: Statistics Denmark

Largest decline in the statistics’ history The consumer confidence indicator plunged to -11.9 in April. The decline is mainly due to the consumer’s assessment of Denmark’s financial situation.

Rates reverting towards the mean After an initial hike in the interest rates at the end of March, short interest rates have been trending downwards, but are still considerable higher than the average for the past year.

27


Selected transactions

Residential Rental Properties Project/adress

City

sq m

Price in mill. DKK

Price per sq m

Seller

Buyer

Tirsbæk Bakker

Vejle

23,000

est. 400

17,400 DKK

Omnia Invest

Niam

Mikkelborg Park

Hørsholm

8,600

244

28,400 DKK

Niam

SF-Management

Kongelysvej

Glostrup

11,000

est. 225

20,500 DKK

Calum

NREP

Holmens Kanal 2 m.fl.

Copenhagen City

49,100

est. 2,100

42,800 DKK

Aberdeen Standard Investment

Ärzteversorgung Westfalen-Lippe

DSV domicil

Hedehusene

150,000

est. 1,500

10,000 DKK

DSV

Savills Investment Management

Amager Strandvej 60-64

Copenhagen

9,300

168

18,000 DKK

Gefion

Amager Copenhagen DK S.à.r.l.

Galleri K

Copenhagen

25,000

est. 1,650

66,000 DKK

Patrizia

Aviva

Vestergade 17A etc.

Vejle

2,600

38

14,600 DKK

Vestald

Boinvest

Slangerupgade 37 etc.

Hillerød

1,600

29

17,800 DKK

MagniPartners

Ejendomsselskabet Herluf Trolles Torv

Litaun Allé 13

Taastrup

64,600

est. 700

10,800 DKK

NREP

Blackstone

Logistikparken 1 etc.

Brabrand

58,500

est. 440

7,500 DKK

NREP

Blackstone

Mimersvej 3 og 5

Køge

38,700

est. 300

7,800 DKK

NREP

Blackstone

Office

Retail

Industrial

28


Selected lettings

Office Project/adress

City

sq m

Owner

Tenant

Borups Allé 43

Copenhagen

7,450

TDC

Københavns Ejendomme & Indkøb

Hellerup

2,725

P/S Philip Heymans Alle 1, 3 og 5

Babarian Nordic

Øster Allé 42

Copenhagen

1,600

Parken Sport & Entertainment

Kysthospitalet

Skt. Knuds Torv 9

Aarhus City

2,100

Skt. Knuds Torv

5R Marketing

Valby

1,440

Valby Maskinfabrik

Sony Nordic Denmark

Vallensbæk

1,700

Saremo Properties

Ascom Danmark

Copenhagen City

121

Barfoed Group

Pilgrim A/S

Copenhagen

2,086

Murersvendenes Finans

Salling Group

Rådhustorvet 7

Vejle

498

Kirk & Thorsen Invest

Bog & ide

Stormgade 155

Esbjerg

836

Ejendomsselskabet City Nord, Esbjerg

Skechers

Søndergade 3

Vejle

330

Vejlborg

A'Poke

Stenbukken 10

Aalborg

1,000

K/S Aalborg Syd

Kirppu Aalborg Syd

Rugmarken 36

Farum

2,100

Pr Trading-Flekota A/S

Trinava ApS

Høgevej 19

Esbjerg

2,192

Jesper Klit Johansen

Gsgroup Danmark A/S

Handelsvej 30

Odense

1,990

Fast Ejendom Danmark 1 ApS

HedeDanmark A/S

Lejrvej 23D

Værløse

1,189

A & C Gram ApS

Leaf Packaging ApS

Høgevej 7 ST

Hillerød

891

Engstien Ejendomme ApS

Role In Sell Out Smart Systems ApS

Vejle

984

Exxit 59 A/S

Thomas' Bilsyn ApS

Philip Heymans Alle 3

Kirsten Walthers Vej 9 Delta park 46

Retail Købmagergade 38 Frederikssundsvej 52

Industrial

Frostvej 1A

29


Residential rental

newer properties

Yield in %, annual market rent in DKK/sq m incl. operating expenses and trends for the next 12 months Area

Central Copenhagen

Østerbro, Frederiksberg og Gentofte

Harbour areas

Ørestad

Remaining Copenhagen

Western suburbs

Northern suburbs

North Zealand

East Zealand

West & South Zealand

Odense

Other Funen

Vejle

Kolding

Fredericia

Esbjerg

Other South Jutland

Aarhus

Silkeborg

Viborg

Aalborg

Hjørring

Frederikshavn

Prime Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m

Secondary

Teritary

Trend

3.50%

4.00%

4.50%

2,050 DKK

1,750 DKK

1,400 DKK

3.50%

4.00%

4.50%

2,000 DKK

1,700 DKK

1,400 DKK

3.50%

4.00%

4.25%

2,000 DKK

1,725 DKK

1,425 DKK

4.00%

4.25%

4.50%

1,775 DKK

1,625 DKK

1,325 DKK

4.00%

4.25%

4.50%

1,750 DKK

1,625 DKK

1,325 DKK

4.00%

4.50%

5.00%

1,650 DKK

1,400 DKK

1,100 DKK

4.00%

4.50%

5.00%

1,750 DKK

1,600 DKK

1,300 DKK

4.25%

4.75%

5.25%

1,650 DKK

1,500 DKK

1,200 DKK

4.25%

5.00%

5.75%

1,700 DKK

1,200 DKK

900 DKK

4.75%

5.50%

6.50%

1,300 DKK

950 DKK

800 DKK

4.25%

4.50%

5.25%

1,350 DKK

1,200 DKK

1,000 DKK

5.00%

6.25%

6.75%

1,150 DKK

900 DKK

800 DKK

4.25%

4.50%

4.75%

1,350 DKK

1,100 DKK

900 DKK

4.75%

5.50%

6.00%

1,200 DKK

1,050 DKK

850 DKK

4.75%

5.75%

6.25%

1,175 DKK

1,000 DKK

800 DKK

4.75%

5.50%

6.00%

1,100 DKK

900 DKK

600 DKK

5.50%

6.00%

6.50%

1,050 DKK

850 DKK

650 DKK

4.00%

4.50%

4.75%

1,800 DKK

1,500 DKK

1,300 DKK

4.25%

5.00%

6.50%

1,400 DKK

1,100 DKK

950 DKK

4.75%

5.00%

5.25%

1,100 DKK

900 DKK

750 DKK

4.00%

4.50%

5.00%

1,250 DKK

1,050 DKK

850 DKK

5.50%

6.25%

7.00%

1,100 DKK

875 DKK

675 DKK

6.00%

6.75%

7.50%

1,000 DKK

850 DKK

650 DKK

Source: EDC International Poul Erik Bech, data as of 15 April 2020


Residential rental

fully developed properties

Yield in %, annual rent in DKK/sq m incl. operating expenses and trends for the next 12 months Area

Central Copenhagen

Østerbro, Frederiksberg og Gentofte

Remaining Copenhagen

Western suburbs

Northern suburbs

North Zealand

East Zealand

West & South Zealand

Odense

Other Funen

Vejle

Kolding

Fredericia

Esbjerg

Other South Jutland

Aarhus

Silkeborg

Viborg

Aalborg

Hjørring

Frederikshavn

Prime Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m Yield in % Annual rent in DKK/sq m

Secondary

Teritary

Trend

3.75%

4.50%

5.25%

1,750 DKK

1,600 DKK

1,300 DKK

3.75%

4.50%

5.25%

1,700 DKK

1,600 DKK

1,300 DKK

4.00%

4.75%

5.50%

1,650 DKK

1,600 DKK

1,300 DKK

4.25%

5.00%

5.75%

1,600 DKK

1,525 DKK

1,225 DKK

4.25%

5.00%

5.75%

1,500 DKK

1,450 DKK

1,225 DKK

4.50%

5.00%

5.75%

1,400 DKK

1,300 DKK

1,200 DKK

4.50%

5.25%

6.00%

1,600 DKK

1,300 DKK

1,000 DKK

4.75%

5.50%

7.00%

1,300 DKK

1,100 DKK

850 DKK

4.25%

5.00%

5.50%

900 DKK

850 DKK

850 DKK

5.25%

5.75%

7.00%

800 DKK

700 DKK

600 DKK

5.00%

5.50%

6.00%

1,100 DKK

1,000 DKK

800 DKK

5.50%

6.00%

6.50%

1,100 DKK

1,000 DKK

850 DKK

5.75%

6.25%

6.75%

1,000 DKK

800 DKK

700 DKK

5.00%

5.75%

6.50%

1,000 DKK

775 DKK

575 DKK

5.50%

6.00%

6.75%

1,000 DKK

950 DKK

750 DKK

3.75%

4.50%

5.00%

1,600 DKK

1,250 DKK

1,150 DKK

4.50%

5.50%

6.75%

1,300 DKK

875 DKK

550 DKK

5.25%

5.75%

7.75%

1,100 DKK

850 DKK

650 DKK

4.00%

4.75%

5.50%

1,150 DKK

1,100 DKK

900 DKK

5.50%

6.50%

7.25%

900 DKK

800 DKK

700 DKK

6.00%

7.00%

7.75%

850 DKK

750 DKK

650 DKK

Source: EDC International Poul Erik Bech, data as of 15 April 2020

31


Residential rental

older properties

Yield in percent and trends for the next 12 months Area

Prime

Secondary

Teritary

Trend

Central Copenhagen

Yield in %

1.25%

2.75%

4.00%

Østerbro, Frederiksberg og Gentofte

Yield in %

1.25%

2.75%

4.00%

Remaining Copenhagen

Yield in %

2.50%

3.00%

4.25%

Western suburbs

Yield in %

3.75%

4.50%

5.25%

Northern suburbs

Yield in %

3.75%

4.50%

5.25%

North Zealand

Yield in %

4.25%

4.50%

5.25%

East Zealand

Yield in %

4.00%

5.00%

5.75%

West & South Zealand

Yield in %

4.75%

5.25%

6.75%

Odense

Yield in %

4.25%

4.75%

5.25%

Other Funen

Yield in %

5.25%

5.50%

7.00%

Vejle

Yield in %

4.75%

5.25%

5.75%

Kolding

Yield in %

5.25%

5.75%

6.25%

Fredericia

Yield in %

5.50%

6.00%

6.50%

Esbjerg

Yield in %

4.50%

5.25%

6.25%

Other South Jutland

Yield in %

5.00%

5.75%

6.50%

Aarhus

Yield in %

2.00%

3.50%

5.00%

Silkeborg

Yield in %

4.00%

5.00%

6.50%

Viborg

Yield in %

4.50%

5.50%

7.00%

Aalborg

Yield in %

2.75%

4.00%

5.25%

Hjørring

Yield in %

5.25%

6.25%

7.00%

Frederikshavn

Yield in %

5.75%

6.75%

7.50%

Source: EDC International Poul Erik Bech, data as of 15 April 2020

32


Office Yield in %, annual market rent in DKK/sq m incl. operating expenses and trends for the next 12 months Area

Central Copenhagen

Østerbro, Frederiksberg og Gentofte

Harbour areas

Ørestad

Remaining Copenhagen

Western suburbs

Northern suburbs

North Zealand

East Zealand

West & South Zealand

Odense

Other Funen

Vejle

Kolding

Fredericia

Esbjerg

Other South Jutland

Aarhus

Silkeborg

Viborg

Aalborg

Hjørring

Frederikshavn

Prime Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m

Secondary

Teritary

Trend

3.50%

4.50%

7.50%

2,600 DKK

1,750 DKK

1,300 DKK

3.75%

4.75%

7.75%

2,350 DKK

1,500 DKK

1,200 DKK

3.50%

4.50%

7.50%

2,600 DKK

1,850 DKK

1,600 DKK

4.00%

5.00%

8.00%

2,050 DKK

1,600 DKK

1,300 DKK

4.25%

5.25%

8.25%

1,800 DKK

1,300 DKK

900 DKK

5.00%

6.50%

9.00%

1,400 DKK

850 DKK

500 DKK

5.50%

6.00%

8.25%

2,000 DKK

1,350 DKK

750 DKK

6.00%

6.50%

8.50%

1,600 DKK

1,000 DKK

700 DKK

6.50%

7.00%

10.50%

1,400 DKK

900 DKK

350 DKK

7.00%

7.50%

11.00%

1,200 DKK

800 DKK

300 DKK

6.25%

7.50%

10.00%

1,250 DKK

800 DKK

500 DKK

7.50%

8.50%

12.00%

800 DKK

600 DKK

400 DKK

5.75%

7.50%

10.00%

1,450 DKK

1,000 DKK

600 DKK

6.00%

7.50%

10.00%

1,350 DKK

950 DKK

550 DKK

6.50%

7.75%

10.50%

1,250 DKK

900 DKK

500 DKK

5.75%

6.75%

10.25%

1,100 DKK

900 DKK

500 DKK

6.50%

7.50%

11.50%

1,100 DKK

700 DKK

400 DKK

4.25%

5.25%

8.25%

1,800 DKK

1,500 DKK

600 DKK

5.75%

6.75%

9.00%

1,150 DKK

700 DKK

350 DKK

6.00%

7.00%

9.00%

850 DKK

650 DKK

400 DKK

5.25%

6.00%

7.00%

1,100 DKK

800 DKK

500 DKK

6.50%

7.25%

10.75%

850 DKK

500 DKK

350 DKK

6.75%

7.50%

11.00%

800 DKK

450 DKK

300 DKK

Source: EDC International Poul Erik Bech, data as of 15 April 2020


Office

availability

Available office space in sq m and in percent of building stock Area

Building stock

Sq m

QoQ change sq m

YoY change sq m

% of stock

QoQ change %

YoY change %

Central Copenhagen

5,826,200

393,000

11,300

39,500

6.1

0.1

0.6

Copenhagen surroundings

3,760,000

426,100

-9,100

26,000

10.6

-0.3

0.7

North Zealand

1,597,100

87,000

-5,800

9,000

4.9

-0.4

0.5

112,500

1,100

300

-1,600

2.4

0.2

-1.5

11,295,800

907,000

-3,500

72,700

7.4

-0.1

0.6

727,600

43,900

-8,200

11,600

4.4

-1.2

1.6

West & South Zealand

1,579,100

64,100

-4,000

-17,800

5.2

-0.2

-1.1

Region Zealand

2,306,800

108,000

-12,200

-6,200

5.0

-0.5

-0.3

Funen

1,500,400

142,900

7,300

17,000

8.4

0.5

1.1

South Jutland

2,366,500

201,200

6,000

13,300

7.9

0.3

0.6

Region of Southern Denmark

3,866,900

344,100

13,300

30,300

8.1

0.3

0.8

East Jutland

3,101,000

289,600

3,600

38,700

8.1

0.1

1.2

West Jutland

1,417,400

63,600

6,900

12,700

3.6

0.5

0.9

Central Denmark Region

4,518,400

353,300

10,600

51,500

6.7

0.2

1.1

North Jutland

1,932,700

109,700

-1,600

900

5.6

-0.1

0.1

North Denmark Region

1,932,700

109,700

-1,600

900

5.6

-0.1

0.1

Denmark, total

23,920,600

1,822,100

6,600

149,200

7.0

0.0

0.6

Bornholm Capital Region of Denmark

East Zealand

Source: Ejendomstorvet-ED Statistikken, data as of 1 January 2020

Available office space as a percentage of building stock 12%

10%

8%

6%

4%

2%

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

0%

Source: Ejendomstorvet-ED Statistikken, data as of 1 January 2020 Region Hovedstaden

Region SjĂŚlland

Region Syddanmark

35

Region Midtjylland

Region Nordjylland

Hele landet


Retail Yield in %, annual market rent in DKK/sq m incl. operating expenses and trends for the next 12 months Area

Strøget

Central Copenhagen

Østerbro, Frederiksberg og Gentofte

Harbour areas

Ørestad

Remaining Copenhagen

Western suburbs

Northern suburbs

North Zealand

East Zealand

West & South Zealand

Odense

Other Funen

Vejle

Kolding

Fredericia

Esbjerg

Other South Jutland

Aarhus

Silkeborg

Viborg

Aalborg

Hjørring

Frederikshavn

Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m

36

Prime

Secondary

Teritary

Trend

3.50%

4.00%

4.75%

18,000 DKK

10,000 DKK

7,500 DKK

4.25%

5.25%

6.25%

7,000 DKK

2,700 DKK

1,800 DKK

4.25%

5.25%

6.75%

4,000 DKK

2,500 DKK

1,400 DKK

4.25%

5.00%

5.75%

2,500 DKK

1,800 DKK

1,500 DKK

4.50%

5.50%

7.00%

2,200 DKK

1,500 DKK

1,200 DKK

4.50%

5.50%

7.00%

3,000 DKK

1,700 DKK

850 DKK

5.50%

5.75%

8.50%

2,500 DKK

1,500 DKK

800 DKK

5.00%

5.50%

7.50%

4,500 DKK

1,600 DKK

700 DKK

5.75%

6.00%

7.75%

3,600 DKK

1,250 DKK

650 DKK

5.75%

6.75%

8.50%

2,700 DKK

900 DKK

425 DKK

6.00%

7.00%

9.00%

2,200 DKK

800 DKK

400 DKK

6.25%

7.25%

8.25%

5,000 DKK

1,500 DKK

550 DKK

8.25%

9.25%

10.25%

2,200 DKK

750 DKK

400 DKK

5.75%

6.50%

7.50%

3,200 DKK

1,300 DKK

500 DKK

6.00%

6.50%

8.00%

2,200 DKK

1,250 DKK

500 DKK

6.25%

7.00%

9.00%

2,000 DKK

1,100 DKK

475 DKK

6.25%

7.25%

9.00%

2,800 DKK

1,200 DKK

505 DKK

6.25%

7.25%

9.25%

2,100 DKK

1,200 DKK

500 DKK

4.25%

5.25%

7.00%

7,250 DKK

2,900 DKK

900 DKK

5.50%

6.50%

8.75%

2,450 DKK

1,000 DKK

500 DKK

5.50%

6.50%

8.00%

2,500 DKK

1,000 DKK

475 DKK

4.50%

5.75%

7.75%

4,500 DKK

2,000 DKK

1,000 DKK

6.25%

7.25%

9.25%

1,400 DKK

800 DKK

450 DKK

6.50%

7.50%

9.75%

1,200 DKK

750 DKK

400 DKK

Source: EDC International Poul Erik Bech, data as of 15 April 2020


Retail

availability

Available retail space in sq m and in percent of building stock Area

Building stock

Sq m

QoQ change sq m

YoY change sq m

% of stock

QoQ change %

YoY change %

1,255,400

68,400

3,100

18,600

5.4

0.2

1.4

896,600

30,100

1,100

-6,300

3.4

0.2

-0.7

1,089,800

52,400

2,900

-2,600

4.8

0.3

-0.2

90,900

2,900

-1,000

-1,400

3.2

-1.1

-1.5

3,332,800

153,800

6,100

8,300

4.6

0.2

0.2

458,900

38,900

400

9,900

8.5

0.1

2.2

West & South Zealand

1,323,400

98,000

2,600

6,800

7.4

0.2

0.5

Region Zealand

1,782,300

136,900

3,000

16,700

7.7

0.2

1.0

Funen

1,283,100

73,700

-7,600

-11,300

5.7

-0.6

-0.9

South Jutland

1,719,000

155,200

3,300

5,100

9.0

0.2

0.3

Region of Southern Denmark

3,002,100

229,000

-4,200

-6,100

7.6

-0.2

-0.2

East Jutland

2,040,400

121,200

-5,200

-1,300

5.9

-0.3

-0.1

West Jutland

1,044,700

67,200

-2,500

-1,900

6.4

-0.3

-0.2

Central Denmark Region

3,085,200

188,300

-7,900

-3,300

6.1

-0.3

-0.1

North Jutland

1,351,700

131,900

10,300

25,100

9.8

0.8

1.9

North Denmark Region

1,351,700

131,900

10,300

25,100

9.8

0.8

1.9

Denmark, total

12,554,000

839,900

7,300

40,600

6.7

0.1

0.3

Central Copenhagen Copenhagen surroundings North Zealand Bornholm Capital Region of Denmark

East Zealand

Source: Ejendomstorvet-ED Statistikken, data as of 1 January 2020

Available retail space as a percentage of building stock 12%

10%

8%

6%

4%

2%

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

0%

Source: Ejendomstorvet-ED Statistikken, data as of 1 January 2020 Region Hovedstaden

Region SjĂŚlland

Region Syddanmark

37

Region Midtjylland

Region Nordjylland

Hele landet


Industrial Yield in %, annual market rent in DKK/sq m incl. operating expenses and trends for the next 12 months Area

Remaining Copenhagen

Western suburbs

Northern suburbs

North Zealand

East Zealand

West & South Zealand

Odense

Other Funen

Vejle

Kolding

Fredericia

Esbjerg

Other South Jutland

Aarhus

Silkeborg

Viborg

Aalborg

Hjørring

Frederikshavn

Prime Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m Yield in % Annual market rent in DKK/sq m

Secondary

Teritary

Trend

5.00%

7.00%

9.25%

800 DKK

500 DKK

375 DKK

5.50%

7.25%

9.50%

650 DKK

500 DKK

375 DKK

6.00%

7.75%

9.00%

625 DKK

475 DKK

350 DKK

6.50%

8.00%

9.50%

600 DKK

450 DKK

325 DKK

6.00%

8.00%

10.25%

600 DKK

425 DKK

300 DKK

7.00%

8.00%

10.25%

500 DKK

375 DKK

300 DKK

7.00%

8.25%

10.00%

450 DKK

350 DKK

250 DKK

9.00%

10.00%

12.00%

400 DKK

300 DKK

200 DKK

6.50%

9.00%

11.50%

450 DKK

375 DKK

250 DKK

6.50%

9.00%

10.00%

425 DKK

350 DKK

225 DKK

6.00%

8.75%

10.00%

575 DKK

350 DKK

225 DKK

7.00%

9.00%

11.75%

400 DKK

300 DKK

175 DKK

7.00%

9.00%

11.75%

425 DKK

300 DKK

175 DKK

6.00%

7.50%

9.75%

550 DKK

425 DKK

300 DKK

6.50%

8.00%

10.25%

450 DKK

300 DKK

125 DKK

6.75%

7.75%

10.00%

475 DKK

375 DKK

250 DKK

6.50%

7.50%

9.00%

400 DKK

325 DKK

250 DKK

7.00%

9.00%

11.00%

375 DKK

300 DKK

175 DKK

7.25%

9.50%

11.75%

375 DKK

275 DKK

150 DKK

Source: EDC International Poul Erik Bech, data as of 15 April 2020

38


Industrial

availability

Available industrial space in sq m and in percent of building stock Area

Building stock

Sq m

QoQ change sq m

YoY change sq m

% of stock

QoQ change %

YoY change %

Central Copenhagen

5,224,400

34,100

2,500

20,500

0.7

0.1

0.4

Copenhagen surroundings

7,851,400

270,900

8,800

26,300

3.5

0.2

0.4

North Zealand

4,195,000

95,100

2,500

-4,500

2.3

0.1

-0.1

815,600

9,200

800

5,300

1.1

0.1

0.6

18,086,400

409,400

14,600

47,700

2.3

0.4

0.3

East Zealand

3,585,500

137,100

13,000

37,800

3.8

0.3

1.0

West & South Zealand

10,002,500

139,000

-11,100

-61,200

1.4

-0.1

-0.6

Region Zealand

13,587,900

276,100

1,900

-23,500

2.0

0.0

-0.2

Funen

9,281,500

185,700

6,500

35,600

2.0

0.1

0.4

South Jutland

19,597,600

433,200

15,100

5,900

2.2

0.1

0.0

Region of Southern Denmark

28,879,000

618,900

21,600

41,500

2.1

0.0

0.1

East Jutland

16,369,600

288,100

2,000

-29,100

1.8

0.1

-0.1

West Jutland

13,080,900

184,200

-24,900

-34,800

1.4

-0.2

-0.3

Central Denmark Region

29,450,400

472,200

-23,000

-64,000

1.6

-0.1

-0.2

North Jutland

13,551,600

189,600

-5,100

37,100

1.4

0.0

0.3

North Denmark Region

13,551,600

189,600

-5,100

37,100

1.4

0.0

0.3

Denmark, total

103,555,400

1,966,200

9,900

38,900

1.9

0.0

0.0

Bornholm Capital Region of Denmark

Source: Ejendomstorvet-ED Statistikken, data as of 1 January 2020

Available industrial space as a percentage of building stock 6%

5%

4%

3%

2%

1%

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

0%

Source: Ejendomstorvet-ED Statistikken, data as of 1 January 2020 Region Hovedstaden

Region SjĂŚlland

Region Syddanmark

39

Region Midtjylland

Region Nordjylland

Hele landet


Definitions

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 15 A et al. 2) Older residential rental properties are 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 5 (2) of the Danish Residential Rent Regulation Act.

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.

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/statistic/udbudsstatistik.

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.

Trends: All trends reflect our expectations to the level in 12 months time. ďƒž The figure is expected to increase ďƒš The figure is expected to remain unchanged ďƒ The figure is expected to decrease

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 net initial yields and is defined as the annualised 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.

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 acknowledgement 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.

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.

40


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26

Profile for EDC Poul Erik Bech

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