THE DANISH PROPERTY FEDERATION CONSENSUS FORECAST COVERING THE PROFESSIONAL INVESTMENT PROPERTY MARKET IN DENMARK JULY 2013
indicator value of 32.5 is the highest measured on residential capital value and it is the second highest indicator value ever measured on all sectors within capital value, occupied space, and market rent. Two thirds of the participants expect increased capital value on residential with prime location in a year compared with today. Both office, retail, industry, and residential experience smaller increases in expectations for the occupied space. The expectations to the occupied space is at its highest on all four sectors since third quarter 2011.Conversely, there is a decrease in the expectation for market rent on office and retail. 21 percent of the participants believe that the market rent on office with prime location will decrease a year from now.
There is a broad consensus that the capital value for the rest of the country will develop slower than in Copenhagen, Aarhus, and the Triangle Region in Jutland in all of 2013. It seems that they expect a growth in capital value in the larger cities probably followed by the rest of the country.
Also lower economic growth in 2013 Unfortunately, we see a trend that the expectations of growth for the Danish economy have to be downgraded. This also applies for the economic advisers, who, in May, downgraded the growth expectations for 2013 from 1.6 percent to only 0.2 percent. Compared to the period from 1997 to 2007, where the Danish economy experienced an average economic growth of 1.9 percent, the present economic situation is not satisfactory. In general, it has been expected that the economy would quickly move towards a boom after the economic crisis, but from 2010 to 2012 the economic growth rates have only been 1.6, 1.1, and -0.5 percent. When the property industry downgrade the expectations to the investment property market over the coming years compared to last quarter, it is linked to the low economic growth. If the economic advisers’ forecast with growth rates of 1.8 and 1.9 percent for 2014 and 2015 hopefully fulfils, it will mean higher activity on the property market again.
Still no trust in capital value for the rest of Denmark
Source: The Danish Property Federation.
Relatively low growth in capital value for the rest of the country
The map shows which regions in Denmark that have the highest value growth compared to other regions. We have asked about the Triangle Region in Jutland (Fredericia, Kolding, and Vejle), Copenhagen, Aarhus and all other regions as one region. From the replies, we have created an indicator. If the area is light green, at least 70 percent of the participants have agreed that this region is doing best compared to other regions.
40 market players participated in this forecast. 40 percent of the participants are property owners. Furthermore, 33 percent are commercial brokers, 10 percent are banks/mortgage providers, and 18 percent are other players.
Please find below the names of some of the companies, which have contributed Aareal Bank, ATP Ejendomme, Bertélco Ejendomme A/S, BBN Consult, BRF Kredit, Carlsberg Byen, CB Richard Ellis, Chr. Hjorth Erhvervsejendomme, Cura Management, DADES, Danbolig erhverv Johnny Hallas, DN-Erhverv, DTZ, EDC Erhverv Poul Erik Bech, FIH Erhvervsbank, Jeudan, Karberghus, Københavns Lufthavne, Lund & Lindhardt, NCC Construction Danmark A/S, Nordea, Nordea Ejendomme, PFA Ejendomme, PKA, Reinholdt A/S, RICS Nordic, Sadolin & Albæk, Sampension, Saxo Properties, Sinding Gruppen.
About the Consensus Forecast These results from July 2013 are based on data collected and released by the Danish Property Federation. The objective is to create a more transparent property market. The Consensus Forecast is published on a quarterly basis and is very dependant on the participating companies’ good will to report data every quarter. Without these companies the Consensus Forecasts would never have been possible. Published Udgivetby afthe Ejendomsforeningen Danish Property Federation Danmark.
Expectations for 2013 hit the lowest level