Support
Research Erhverv Poul Erik Bech
MARKET UPDATE Q 1
2 0 1 9
EDC MARKET UPDATE Q 1
Contact us: Jørgen Jørgensen Director Tel: +45 33 30 10 25 Mail: jjo@edc.dk Copenhagen area: Thor Heltborg Head of Corporate Clients Tel.: +45 33 30 10 66 Mail: the@edc.dk North Zealand: Stephen Wielje Berthelsen Department Manager Tlf: +45 48 26 99 10 Mail: stbe@edc.dk Region Zealand: East, West and South Zealand John Borrisholt Regional Director Tlf.: +45 58 58 79 39 Mail: jsb@edc.dk Central Denmark Region: Søren Leth Pedersen Regional Director, Partner, MSc.(f), Chartered Surveyor, MDE Tel: +45 58 58 78 76 Mail: slp@edc.dk North Denmark Region: Frank Jensen Regional Director, Partner, CBA Tel: +45 58 58 75 72 Mail: frje@edc.dk Southern Denmark: Claus Fenger Dept. Manager, Partner, Chartered Surveyor, MDE Tel: +45 58 58 74 04 Mail: cfe@edc.dk Funen: Morten Nielsen Dept. Manager, Partner, Chartered Surveyor, MDE Tel: +45 58 58 78 56 Mail: monie@edc.dk Research: Morten Nielsen Business Consultant Tel: +45 58 58 80 70 Mail: mon@edc.dk ejendomstorvet.dk/info/statistik
Tendencies Increasing Stable
2 0 1 9
REMARKS FOR OUR ESTIMATES: The valuation of a property depends on various property specific attributes, including, but not limited to, the lease conditions, the tenant’s credit rating and the property’s condition. When valuing a property, the estimates should not be relied upon without seeking qualified, professional advice. However, the estimates can serve as useful input in the valuation process. Any reproduction of data in this report should be credited to EDC Erhverv Poul Erik Bech. Whilst data and estimates have been rigorously checked, EDC Erhverv Poul Erik Bech can take no responsibility for any inaccuracy within this report. Estimates and forecasts of rents and yields are as of Q1 2019. Estimates are subject to change.
YIELDS, MARKET RENTS AND FORECASTS: LOCATION: Yield and market rent estimates covers properties with prime, secondary and tertiary location. FACILITY CLASS: Location aside, our estimates are based upon a segmentation of property facility classes; facility class A, B and C, where class A is the best facility class. 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. 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 traded at the lowest yield for the area, have the highest market rent and have a short reletting process. Naturally, yield and market rent estimates are subject to certain deviations depending on the exact location and property specific facilities. YIELD DEFINITION: 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. MARKET RENT ESTIMATES: 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 €/sq m/year. Figures have been rounded when converting from DKK (Danish Kroner) to €. It is assumed that all properties are let at market-conform conditions. TENDENCIES: All tendencies are based upon the historical trend between this and previous quarter. RESIDENTIAL RENTAL PROPERTIES: In this report estimates are included for “Newer residential rental properties”, “Fully developed older residential rental properties” and “Older residential rental properties”. In Denmark residential rental levels cannot be determined freely and is subject to far reaching rent control. The major difference between the before mentioned types of residential rental property is that older residential rental properties are regulated by the provisions in the Danish rent act (Lejeloven) and the Housing Regulation Act (Boligreguleringsloven) concerning cost driven rental levels. Newer residential rental properties taken in to use no earlier than 1 July 1992 are subject to the rules concerning free market rent, pursuant to the Housing Regulation Act § 15 A and others.
DATA FOR VACANT COMMERCIAL SPACE ( VACANCY RATE) Source: Ejendomstorvet-ED Statistikken (Ejendomstorvet-ED Statistics), data as of Q1 2019. For more information we refer to ejendomstorvet.dk/info/statistik.
Decreasing
EDC Research - Q1 2019 - page 2
EDC MARKET UPDATE Q 1
2 0 1 9
Regions of Denmark and selected market areas
Capital Region of Denmark Region Zealand Aalborg
Southern Denmark Region Central Jutland Region Region North Jutland
Aarhus
Vejle
Kolding
Triangle Area
Copenhagen
Fredericia
Odense
EDC Research - Q1 2019 - page 3
EDC MARKET UPDATE O FFI C E
Q 1
2019
Office Yield in %, yearly market rent in â‚Ź / sq m and the last quarters historical tendency Facility class A Copenhagen
Facility class B
Facility class C
Facility class A
Facility class B
Facility class C
Yearly market rent in â‚Ź / sq m
Yield in %
Prime
4.00
4.50
5.00
325
265
205
Secondary
5.00
5.25
5.50
245
210
165
Tertiary
6.00
7.50
8.50
165
115
85 90
North Zealand Prime
7.50
7.75
8.25
135
105
Secondary
7.75
8.00
8.75
125
90
75
Tertiary
8.00
8.50
9.25
105
75
65
East Zealand Prime
6.75
7.75
8.25
175
110
70
Secondary
7.75
8.75
9.75
125
85
50
Tertiary
9.25
9.75
10.50
85
50
40
Prime
7.50
8.25
8.75
125
90
55
Secondary
8.75
9.75
10.50
95
65
45
Tertiary
10.50
12.00
14.00
65
50
30
West and South Zealand
Aarhus Prime
4.50
5.00
5.50
215
185
145
Secondary
5.00
5.75
7.00
185
135
110
Tertiary
6.50
7.00
7.75
150
110
85 105
Aalborg Prime
5.50
6.25
7.25
150
130
Secondary
6.25
7.25
8.00
125
110
85
Tertiary
7.25
8.00
8.50
105
85
70 75
Triangle area Prime
6.25
6.50
6.75
165
115
Secondary
7.00
7.50
7.75
125
95
70
Tertiary
7.75
8.75
9.75
60
55
50
Odense Prime
5.75
7.00
8.00
155
110
95
Secondary
7.00
8.00
9.00
135
95
90
Tertiary
8.00
9.00
10.00
90
85
70
Source: EDC Erhverv Poul Erik Bech. Data as of Q1 2019. Tendencies: All tendencies represent the historical trend between this and previous quarter.
Vacant office space in sq m and in % of building stock
Central Copenhagen North Zealand
Vacancy sq m
As % of building stock
Change % QoQ
353,500
6.0
0.0
Change % YoY 0.3
78,000
4.9
0.1
-1.2
East Zealand
32,300
4.4
0.5
0.8
West- and south Zealand
81,900
5.2
0.1
1.7
East Jutland
250,900
8.2
-0.2
0.5
Region North Jutland
108,800
5.6
0.2
-0.3
South Jutland
187,900
8.0
0.0
-0.5
Funen (including Odense)
125,900
8.4
0.1
-0.5
Source: Ejendomstorvet-ED-Statistikken (Ejendomstorvet-ED-statistics), data as of Q1 2019. Changes quarter on quarter and year on year.
EDC Research - Q1 2019 - page 4
EDC MARKET UPDATE O FFI C E
Q 1
2019
Vacant office space in sq m and in % of building stock 10% 9%
125,900 sq m
250,900 sq m
187,900 sq m
8% 7% 6%
353,500 sq m 108,800 sq m 81,900 sq m
5%
78,000 sq m 32,300 sq m
4% 3% 2% 1% 0% Central Copenhagen
North Zealand
East Zealand
West and South Zealand
East Jutland
Region North Jutland
South Jutland
Funen (including Odense)
Source: Vacancy data from Ejendomstorvet-ED-Statistikken (Ejendomstorvet-ED-statistics). Data as of Q1 2019.
Key vacancy figures from Ejendomstorvet-ED Statistikken (Ejendomstorvet-ED statistics) Office
Building stock
Vacancy sq m
Change sq m QoQ
As % of building stock
Change in % QoQ
Central Copenhagen
5,996,400
353,500
200
6.0%
0.0%
Copenhagen area
3,784,900
400,100
19,100
10.6%
0.5%
North Zealand
1,606,700
78,000
100
4.9%
0.1%
114,400
2,700
300
2.4%
0.3%
11,502,400
834,300
19,700
7.3%
0.2%
726,400
32,300
3,800
4.4%
0.5%
Bornholm Capital Region of Denmark East Zealand West- and south Zealand
1,568,100
81,900
1,300
5.2%
0.1%
Region Zealand
2,294,500
114,200
5,200
5.0%
0.2%
Funen (including Odense)
1,492,800
125,900
2,400
8.4%
0.1%
South Jutland
2,360,100
187,900
-300
8.0%
0.0%
Southern Denmark Region
3,852,900
313,800
2,200
8.1%
0.0%
East Jutland
3,066,800
250,900
-7,700
8.2%
-0.2%
West Jutland
1,408,500
50,900
-6,200
3.6%
-0.5%
Central Jutland Region
4,475,300
301,800
-13,900
6.7%
-0.4%
North Jutland
1,953,800
108,800
2,700
5.6%
0.2%
Region North Jutland
1,953,800
108,800
2,700
5.6%
0.2%
24,079,000
1,672,900
15,900
7.0%
0.1%
Denmark. total
Source: Ejendomstorvet-ED-Statistikken (Ejendomstorvet-ED-statistics), data as of Q1 2019. "% of building stock" is the proportion of empty space in sq m relative to the total building stock.
EDC Research - Q1 2019 - page 5
EDC MARKET UPDATE O F F I C E
Q 1
2019
Location segmentation for offices 8
201
Sotoften
Copenhagen
Aarhus
Skjoldelev
Lystrup
Olsted
15
46 18 E47
511
Sabro
3 20
Hellerup
Gladsaxe
Egaa
19
47
Bispebjerg
Borum
Brendstrup
Risskov
Nordhavn
Husum Utterslev
O2
Nørrebro
23
180
Yderup
Ydre Østerbro
Tilst
Amerika Plads
26
True
Indre Østerbro
Lyngby
Labing
Gellerup
Vanløse
Rødovre
Hasle
City
O3
O1
Frederiksberg
Brabrand
195
156 O2
Brøndbyøster E47
21
Vejby
Skejby
Tuborg Havn
16
Valby
Vesterbro
Aaby
E45
Sundbyvester
Marselisborg
151 Hvidovre
2
501
Stavtrup
Ormslev Stationsby
Sydhavn
Avedøre
Aarhus
Aarslev Mark
Ørestad Nord Havnefront Syd
1
Aabyhoj
Aarslev
Kalvebod Brygge
Vigerslev
21
505
Kasted
Geding
E45
Søborg
O4
17
19 20
Faarup
Gentofte
Mørkhøj
15
Kvottrup
O3
4
18
Lisbjerg
Kastrup
Ørestad City
Aabo
17
E20
19
Ormslev
170 2
Lemming Viby
22
20
Ørestad Syd
21
Holme
Tårnby
O2
E20
Bering
1 km
Hasselager
Kolt
Kbh. Lufthavn
1 km
451
Bjostrup Slet
Kattrup
501
Skaade
Prime locations
Secondary locations
Tertiary locations
Jegstrup
51
•
Trains
•
Tranbjerg Metro
Horning
Overballe
Osterby
Storhoj
Horret
The map for office properties in Copenhagen/Aarhus illustrates a location segmentation in prime, secondary and tertiary locations, where the prime area typically has the best locations for office property in Copenhagen/Aarhus. The location segmentation has been made by EDC Erhverv Poul Erik Bech. The location segmentation can change over time. The segmentation is our perception of general location segmentation and should not be perceived as a definitive segmentation of the best, good and below average locations.
Copenhagen
Aarhus
Yield in % Location
Facility class A
Facility class B
Facility class C
Location
Facility class A
Facility class B
Facility class C
Prime
4.00
4.50
5.00
Prime
4.50
5.00
5.50
Secondary
5.00
5.25
5.50
Secondary
5.00
5.75
7.00
Tertiary
6.00
7.50
8.50
Tertiary
6.50
7.00
7.75
Yearly market rent in € / sq m Location
Facility class A
Facility class B
Facility class C
Location
Facility class A
Facility class B
Facility class C
Prime
325
265
205
Prime
215
185
145
Secondary
245
210
165
Secondary
185
135
110
Tertiary
165
115
85
Tertiary
150
110
85
Tendencies: All tendencies represent the historical trend between this and previous quarter.
EDC Research - Q1 2019 - page 6
EDC MARKET UPDATE R E TA I L
Q 1
2019
Retail Yield in %, yearly market rent in â‚Ź / sq m and the last quarters historical tendency Facility class A Copenhagen
Facility class B
Facility class C
Facility class A
Facility class B
Facility class C
Yearly market rent in â‚Ź / sq m
Yield in %
Prime
3.75
4.50
5.00
2,685
1,880
1,610
Secondary
5.50
5.75
6.50
500
340
270
Tertiary
7.00
7.50
7.75
165
145
125
Prime
7.50
7.75
8.25
380
150
110
Secondary
7.75
8.00
8.50
235
125
105
Tertiary
8.00
8.50
9.00
170
110
90
North Zealand
East Zealand Prime
6.00
7.00
8.00
380
305
135
Secondary
7.50
8.00
9.50
235
205
105
Tertiary
9.00
9.25
10.00
105
70
35
West and South Zealand Prime
6.75
7.50
9.00
245
205
135
Secondary
7.50
9.00
10.00
170
115
55
Tertiary
8.75
10.00
11.00
75
55
30 470
Aarhus Prime
4.50
4.75
5.00
1.075
740
Secondary
5.25
5.50
6.00
605
470
340
Tertiary
6.00
6.50
7.00
270
215
165
Prime
4.50
5.50
6.00
570
440
270
Secondary
6.25
6.50
7.00
175
145
95
Tertiary
7.25
7.75
8.25
85
70
60 165
Aalborg
Triangle area Prime
6.00
6.25
6.50
405
325
Secondary
6.50
6.75
7.00
215
125
95
Tertiary
7.25
7.75
8.25
95
70
70
Odense Prime
5.00
6.00
6.50
675
510
340
Secondary
5.75
7.00
8.00
340
245
175
Tertiary
8.00
9.00
10.00
110
85
55
Source: EDC Erhverv Poul Erik Bech. Data as of Q1 2019. Tendencies: All tendencies represent the historical trend between this and previous quarter.
Vacant retail space in sq m and in % of building stock. Vacancy sq m
As % of building stock
Change % QoQ
Central Copenhagen
49,800
3.9
-0.1
Change % YoY 0.3
North Zealand
55,000
5.0
0.0
0.6 -0.1
East Zealand
29,000
6.3
0.0
West- and south Zealand
91,200
6.9
0.4
2.2
122,500
6.1
0.5
0.6
East Jutland Region North Jutland
106,800
7.8
-0.4
1.1
South Jutland
150,100
8.8
-0.4
1.3
85,000
6.7
0.4
1.4
Funen (including Odense)
Source: Ejendomstorvet-ED-Statistikken (Ejendomstorvet-ED-statistics), data as of Q1 2019. Changes quarter on quarter and year on year.
EDC Research - Q1 2019 - page 7
EDC MARKET UPDATE R E TA I L
Q 1
2019
Vacant retail space in sq m and in % of building stock 10% 150,100 sq m
9% 106,800 sq m
8% 91,200 sq m
7% 29,000 sq m
6% 55,000 sq m
5% 4%
85,000 sq m 122,500 sq m
49,800 sq m
3% 2% 1% 0% Central Copenhagen
North Zealand
East Zealand
West and South Zealand
East Jutland
Region North Jutland
South Jutland
Funen (including Odense)
Source: Vacancy data from Ejendomstorvet-ED-Statistikken (Ejendomstorvet-ED-statistics). Data as of Q1 20189.
Key vacancy figures from Ejendomstorvet-ED Statistikken (Ejendomstorvet-ED statistics) Retail Central Copenhagen
Building stock
Vacancy sq m
Change sq m QoQ
As % of building stock
Change in % QoQ
1,245,500
49,800
-300
3.9%
-0.1%
902,600
36,400
1,000
4.0%
0.1%
1,096,300
55,000
500
5.0%
0.0%
92,500
4,300
500
4.6%
0.5%
3,336,900
145,500
1,700
4.4%
0.1%
458,200
29,000
300
6.3%
0.0%
West- and south Zealand
1,314,100
91,200
6,200
6.9%
0.4%
Region Zealand
1,772,300
120,200
6,500
6.8%
0.4%
Funen (including Odense)
1,276,600
85,000
4,500
6.7%
0.4%
South Jutland
1,714,300
150,100
-6,800
8.8%
-0.4%
Southern Denmark Region
2,991,000
235,100
-2,300
7.9%
0.0%
East Jutland
2,018,000
122,500
8,900
6.1%
0.5%
West Jutland
1,038,100
69,100
3,700
6.7%
0.4%
Central Jutland Region
3,056,100
191,600
12,600
6.3%
0.4%
North Jutland
1,366,400
106,800
-5,100
7.8%
-0.4%
Region North Jutland
1,366,400
106,800
-5,100
7.8%
-0.4%
12,522,700
799,300
13,400
6.4%
0.1%
Copenhagen area North Zealand Bornholm Capital Region of Denmark East Zealand
Denmark. total
Source: Ejendomstorvet-ED-Statistikken (Ejendomstorvet-ED-statistics), data as of Q1 2019. "% of building stock" is the proportion of empty space in sq m relative to the total building stock.
EDC Research - Q1 2019 - page 8
EDC MARKET UPDATE B O X
R E TA I L
Q1
2019
Box retail
BOX RETAIL: Box retail stores are typically located in external retail areas and selling goods that do not require unusually large quantities of floor space. In this publication, we do not include big box retailing with permission for selling items that require unusually large quantities of floor space according to the provisions in the Danish Planning Act (Planloven). Yield and rent estimates are stated as “above average”, “average”, “below average” for different areas (primary, secondary, tertiary).
Yield in %, yearly market rent in € / sq m and the last quarters historical tendency Above average North Zealand
Average
Below Average
Above average
Average
Below Average
Yearly market rent in € / sq m
Yield in %
Prime
7.50
7.75
8.25
145
125
70
Secondary
7.75
8.00
8.50
110
105
50
Prime
6.75
7.25
7.75
150
130
110
Secondary
7.50
7.75
9.00
105
85
65
Prime
7.00
7.75
8.50
110
100
65
Secondary
8.00
9.00
10.00
95
65
45
East Zealand
West and South Zealand
Capital Region of Denmark Prime
6.50
7.00
7.50
150
135
125
Secondary
7.00
8.00
9.00
110
95
85
Prime
6.75
8.00
9.50
150
110
95
Secondary
8.00
9.50
10.50
95
85
65
Prime
7.00
7.25
7.50
150
135
125
Secondary
7.75
8.00
8.25
110
95
85
Prime
6.50
7.00
8.00
165
125
110
Secondary
7.50
8.00
9.00
125
110
85
Prime
7.25
7.50
8.00
150
125
110
Secondary
7.50
7.75
8.50
95
85
70
Prime
7.50
8.00
8.50
135
110
95
Secondary
8.25
9.00
9.50
110
95
75
Region Zealand
Central Jutland Region
Region North Jutland
South Jutland
Funen
Source: EDC Erhverv Poul Erik Bech. Data as of Q1 2019. Tendencies: All tendencies represent the historical trend between this and previous quarter.
EDC Research - Q1 2019 - page 9
EDC MARKET UPDATE I N D U S T R I A L & LOGI S TI C S Q 1 2 0 19
Industrial & Logistics Yield in %, yearly market rent in â‚Ź / sq m and the last quarters historical tendency Facility class A Copenhagen
Facility class B
Facility class C
Facility class A
Facility class B
Facility class C
Yearly market rent in â‚Ź / sq m
Yield in %
Prime
6.50
7.50
8.00
90
65
55
Secondary
7.25
8.25
8.75
70
60
45
Tertiary
8.00
9.25
9.75
55
45
40
North Zealand Prime
6.75
8.00
8.75
80
55
45
Secondary
7.50
8.50
9.25
65
55
45
Tertiary
8.50
9.00
9.75
55
50
35
East Zealand Prime
7.00
8.00
8.50
85
65
45
Secondary
8.00
8.00
9.00
65
45
35
Tertiary
9.00
9.50
10.50
50
35
25 45
West and South Zealand Prime
7.50
8.50
9.50
65
55
Secondary
8.50
9.50
10.50
50
35
30
Tertiary
9.50
10.50
12.50
30
25
20
Aarhus Prime
6.75
7.50
8.00
60
50
45
Secondary
7.00
7.75
8.50
55
45
40
Aalborg Prime
7.00
8.00
9.00
55
45
35
Secondary
8.75
9.25
10.25
45
35
25
Triangle area Prime
7.00
7.50
8.00
55
45
40
Secondary
8.25
8.75
10.00
40
35
30
Odense Prime
6.50
8.50
9.00
55
45
35
Secondary
8.25
9.50
10.50
40
35
20
Source: EDC Erhverv Poul Erik Bech. Data as of Q1 2019. Tendencies: All tendencies represent the historical trend between this and previous quarter.
Vacant industrial & logistics space in sq m and in % of building stock Vacancy sq m
As % of building stock
Change % QoQ
Change % YoY
361,700
2.0
0.2
-0.4
North Zealand
99,600
2.4
0.4
0.0
East Zealand
99,300
2.8
-0.2
0.2
Capital Region of Denmark
West- and south Zealand
200,200
2.0
0.2
0.3
East Jutland
317,200
2.0
-0.3
-1.1
Region North Jutland
152,500
1.1
-0.2
-0.6
South Jutland
427,300
2.2
0.0
-0.2
Funen (including Odense)
150,100
1.6
-0.2
-0.3
Source: Ejendomstorvet-ED-Statistikken (Ejendomstorvet-ED-statistics), data as of Q1 2019. Changes quarter on quarter and year on year.
EDC Research - Q1 2019 - page 10
EDC MARKET UPDATE I N D U S T R I A L & LOGI S TI C S Q 1 2 0 19
Vacant industrial & logistics space in sq m and in % of building stock
5%
4%
3%
99,300 sq m 99,600 sq m
427,300 sq m
361,700 sq m
2%
200,200 sq m
317,200 sq m 150,100 sq m
152,500 sq m
1%
0% Central Region of Denmark
North Zealand
East Zealand
West and South Zealand
East Jutland
Region North Jutland
South Jutland
Funen (including Odense)
Source: Vacancy data from Ejendomstorvet-ED-Statistikken (Ejendomstorvet-ED-statistics). Data as of Q1 2019.
Key vacancy figures from Ejendomstorvet-ED Statistikken (Ejendomstorvet-ED statistics) Industrial & Logistics
Building stock
Vacancy sq m
Change sq m QoQ
As % of building stock
Change in % QoQ
Central Copenhagen
5,183,100
13,600
7,200
0.3%
0.2%
Copenhagen area
7,903,500
244,600
16,200
3.1%
0.2%
North Zealand
4,220,000
99,600
13,900
2.4%
0.4%
830,000
3,900
1,500
0.5%
0.2%
18,136,700
361,700
38,800
2.0%
0.2%
3,579,500
99,300
-9,800
2.8%
-0.2%
Bornholm Capital Region of Denmark East Zealand West- and south Zealand Region Zealand Funen (including Odense)
9,932,700
200,200
22,200
2.0%
0.2%
13,512,200
299,600
12,500
2.2%
0.1% -0.2%
9,234,500
150,100
-15,500
1.6%
South Jutland
19,544,600
427,300
-4,300
2.2%
0.0%
Southern Denmark Region
28,779,100
577,400
-19,800
2.0%
-0.1%
East Jutland
16,189,200
317,200
-58,100
2.0%
-0.3%
West Jutland
12,998,400
219,000
-24,300
1.7%
-0.2% -0.3%
Central Jutland Region
29,187,600
536,200
-82,400
1.8%
North Jutland
13,699,700
152,500
-19,700
1.1%
-0.2%
Region North Jutland
13,699,700
152,500
-19,700
1.1%
-0.2%
103,315,300
1,927,300
-70,700
1.9%
0.0%
Denmark. total
Source: Ejendomstorvet-ED-Statistikken (Ejendomstorvet-ED-statistics), data as of Q1 2019. "% of building stock" is the proportion of empty space in sq m relative to the total building stock.
EDC Research - Q1 2019 - page 11
EDC MARKET UPDATE R E S I D E N T I A L R EN TA L P R O P E RT I ES Q 1 2 0 1 9
Yield in %, yearly market rent in € / sq m and the last quarters historical tendency
Residential rental properties
Newer residential rental properties Facility class A Copenhagen
Facility class B
Yield in %
Prime Secondary Tertiary
Facility class A
Facility class B
Yearly market rent in € / sq m
3.75 4.00 4.50
4.00 4.50 4.75
255 235 205
230 205 170
4.00 4.25 4.75
5.00 5.50 5.75
225 190 165
175 155 150
4.75 5.00 5.50
5.25 6.25 7.50
215 185 110
170 125 85
5.25 6.00 7.00
6.50 7.50 8.50
170 130 105
125 110 85
4.00 4.50 4.75
4.25 4.75 5.00
225 185 165
190 150 135
4.25 4.75 5.50
4.50 5.25 6.00
170 150 125
145 115 110
4.75 5.50
5.25 6.00
165 135
145 130
4.50 5.25
5.25 6.00
175 150
130 115
North Zealand Prime Secondary Tertiary East Zealand Prime Secondary Tertiary West and South Zealand Prime Secondary Tertiary Aarhus Prime Secondary Tertiary Aalborg Prime Secondary Tertiary Triangle area Prime Secondary Odense Prime Secondary
Older residential rental properties Facility class A Copenhagen Prime Secondary Tertiary
Facility class B
Facility class C
Fully developed older residential rental properties Facility class A
Yield in %
Facility class B
Yield in %
Facility class A
Facility class B
Yearly market rent in € / sq m
1.75 2.50 3.50
2.00 3.25 4.25
3.00 4.00 5.50
3.75 4.25 5.00
4.25 4.50 5.25
230 205 170
205 185 155
4.00 4.25 4.50
4.50 5.25 5.50
5.25 5.50 5.75
4.00 4.50 5.75
5.25 5.75 6.00
210 205 175
175 165 150
2.75 4.00 5.00
3.00 4.50 6.00
4.00 5.00 6.00
4.75 5.25 7.25
5.25 7.00 8.25
195 135 95
155 125 85
4.25 5.25 7.00
5.25 7.00 8.50
7.50 8.00 10.00
5.50 6.50 8.00
6.50 7.50 9.00
170 110 85
115 95 75
2.50 3.00 4.00
2.75 3.25 4.25
3.00 3.50 4.50
3.75 4.25 5.00
4.00 4.75 5.25
195 165 145
175 145 115
2.75 4.00 5.50
3.50 4.50 6.00
4.00 5.00 6.50
4.00 4.75 5.25
4.25 5.00 5.75
150 125 110
130 110 95
5.25 5.50 7.25
5.75 6.50 8.00
6.50 7.75 8.50
5.50 6.25 7.50
6.00 6.75 7.75
4.00 4.50
4.50 5.25
5.25 6.00
4.50 5.25
5.50 6.00
North Zealand Prime Secondary Tertiary East Zealand Prime Secondary Tertiary West and South Zealand Prime Secondary Tertiary Aarhus Prime Secondary Tertiary Aalborg Prime Secondary Tertiary Triangle area Prime Secondary Tertiary Odense Prime Secondary
Source: EDC Erhverv Poul Erik Bech. Data as of Q1 2019. Tendencies: All tendencies represent the historical trend between this and previous quarter.
EDC Research - Q1 2019 - page 12
EDC MARKET UPDATE Q 1
2 0 1 9
Hard work, ethics and a solid business sense – were the three pillars on which I founded my company in 1978. These core values are still the same and their legitimacy has been confirmed by good results, solid growth and satisfied clients. Hard work is part of our culture which is deeply rooted throughout the company. Every day our employees do their utmost to provide our clients with knowledge-based advice and first-class service and our phones are open from 7 a.m. to 9. p.m. - 365 days a year. Our ethics mean you can have confidence in us; in our dedication and our business ethics, in our way of working together, and in our transparent processes that provide our clients with security and overview. A solid business sense is your guarantee for a satisfactory and profitable business outcome. Our focus is representing our clients and their interests in the most optimal way possible. The performance of our experienced specialists is continuously assessed with regards to competence, performance and negotiating skills to ensure our clients always have confidence in the quality of our services. Nationwide commercial real estate company – with local knowledge Our commitment to our core values has turned EDC Poul Erik Bech in to a nationwide company with a strong presence in Denmark. Our 16 commercial offices ensure that we have in-depth knowledge of the local area and the market as a whole. We continuously work actively and highly focused to have the industry’s most powerful network in order to be up to date with the changing market and our clients’ needs. We look forward to working with you.
Purchases International division
Poul Erik Bech Chairman
Selling of development projects
Developer advisory
Selling
Valuations (RICS)
EDC Property Invest – a complete solution for commercial property
Property & facilities management
Letting services
Sale & Lease Back Advisory
EDC Research - Q1 2019 - page 13
EDC MARKET UPDATE Q 1
2 0 1 9
Why invest in Denmark
Why invest in Danish real estate? • Low transaction costs • High degree of market transparency and stability
The Danish mortgage system
• Low financing rates through Danish mortgage
credit institutions • Solid key economic indicators • AAA/A-1+ credit rating and stable outlook* *S&P as of September 2016
Low financing rates • Low origination costs • Low APR compared to the majority of European markets • Highly transparent, stable and liquid mortgage bond
market
Loan
Investment
Repayment. interest and margin
Bonds Repayment and interest
• Flexible loans on conditions close to funding
conditions of capital market players
Borrower
Mortgage institution
Investor
EDC Research - Q1 2019 - page 14
EDC MARKET UPDATE Q 1
2 0 1 9
• Low financing rate: Bond yield plus a small markup
(margin) for the mortgage bank • Debt/value ratio: Financing through the mortgage
Low transaction costs
institutions, normally up to 60% of valuation
As buyer:
• Loan maturity: Min. 1 year (yearly refinancing), max. 20 years
Deed registration: 0.6% of purchase price + € 190
• Payment structure: Floating or fixed rates, with or
without quarterly principal repayments
Mortgage: 1.5% of the mortgage’s principal +€ 190
• Each new loan is in principle funded by the issuance of
new mortgage bonds of equal size and identical cash flow and maturity characteristics, called the Balance Principle. Proceeds from the sale of the bonds are passed on to the borrower and similarly, interest and principal payments are passed directly to investors holding mortgage bonds
Costs for own advisor, lawyer, agent etc. are typically very low As seller: Agent, lawyer etc. varies, but typically between 1 - 4% of purchase price depending on deal size
• The Danish mortgage institutions have existed since
1850 and are considered very strong and very low risk financial instruments
Denmark is known to have some of the lowest roundtrip property transactions costs
• In terms of volume outstanding, Denmark has the
second largest share of the mortgage bond market in Europe • There has never been an incidence of default on a
Danish mortgage bond
High degree of transparency Denmark is among the most transparent markets in Europe and worldwide. The transparent Danish market provides the investor with a secure and low risk environment for foreign direct investment. Investments in Denmark are conducted in a market which benefits from a highly transparent and stable legal and regulatory framework coupled with a simple transaction process. Lease structure
Solid key economic indicators
2018
2019
2020
GDP growth (%), yoy Denmark
0.8
EU
1.9
1.6
1.3
1.3
1.6
Unemployment rate (%) Denmark
6.1
6.2
6.1
EU
6.9
6.6
6.3
Current account balance (% of GDP) Denmark
7.8
6.1
6.2
EU
3.0
3.5
3.3
• Rent review every fourth year. Terms are flexible
Denmark
1.1
0.8
1.5
• It is possible to agree on a threshold for the rent. Eg.
EU
1.7
1.4
1.5
• Rent adjustment, normally adjusted yearly with the
rate of inflation or a fixed minimum rate
the rent cannot drop further than the rent in force at the start of the tenancy
Inflation (%)
Source: The Economic forecast (Spring 2018) from the European Commission.
• The landlord and the tenant can freely agree on the rent
amount as long as the rent is not unreasonable or contrary to sound business practices • Lease length: There are no statutory restrictions on the
duration of a commercial lease agreement. It is normal to have interminable leases in place
EDC Research - Q1 2019 - page 15
Erhverv Poul Erik Bech
• The leading real estate agency in Denmark in the areas of selling, leasing, valuation and advisory • Founded in 1978, operating nationwide across 17 commercial real estate branches, more than 55 residential real estate branches, and finally 3 residential real estate branches in France and Sweden. • Owner of the property management company LEA Ejendomspartner • More than 500 employees Our greatest strength is our nationwide presence and local knowledge with 70 commercial specialists servicing our clients. We are chartered surveyors, valuers and certified members of RICS. We especially deal with the following types of properties: • Investment properties, properties for rent and owner-user properties • Offices, high street retail, industrial & logistics and mixed-use properties • Residential rental properties • Land and development projects • Hotels, restaurants and other properties in the leisure sector We offer our clients a wide range of services: • Execution of investment transactions of single assets. portfolios and on a company level
• Due diligence
• Letting services
• Property and facilities management
• Valuations (RICS)
• Project development consultancy
• Capital structure advisory
• Sale and Lease Back
• Tenant and landlord representation • EDC Location Search • EDC PropertySWAP® • Research services • Bespoke consultancy and market study services
Office locations: Copenhagen +45 33 30 10 00 • 114@edc.dk
Herlev +45 44 57 03 37 • 278@edc.dk
Hillerod +45 48 26 99 10 • 342@edc.dk
Roskilde +45 46 33 33 33 • 403@edc.dk
Koge +45 55 35 55 53 • 469@edc.dk
Naestved +45 55 78 66 03 • 473@edc.dk
Slagelse +45 58 58 75 50 • 474@edc.dk
Odense +45 58 58 82 00 • 512@edc.dk
Kolding +45 76 33 80 10 • 603@edc.dk
Aabenraa +45 73 33 13 00 • 620@edc.dk
Sonderborg +45 58 58 80 20 • 641@edc.dk
Esbjerg +45 76 10 48 00 • 670@edc.dk
Vejle +45 75 83 13 11 • 710@edc.dk
Aarhus +45 87 30 99 30 • 802@edc.dk
Viborg +45 58 58 77 10 • 751@edc.dk
Aalborg +45 96 31 49 00 • 912@edc.dk
CHARTERED SURVEYORS & INTERNATIONAL PROPERTY CONSULTANTS
Read more: edc.dk/erhverv
