THE DANISH PROPERTY FEDERATION CONSENSUS FORECAST COVERING THE PROFESSIONAL INVESTMENT PROPERTY MARKET IN DENMARK JULY 2015
WEB REPORT
Still optimism
From 2015 to 2019 a total return of 5.6 percent in average is expected, which can be described as good times for the coming five years. 25 percent of the participants expect a total return of 5.3 percent in average or just below from 2015 to 2019, while 25 percent of the participants expect a total return of 6.0 percent or above.
A total return of 5.4 percent is expected this year 2015
2016
2017
2015-2019
Total return
5.4
5.6
Quarterly change
-0.1
0.0
0.1
0.1
Annual change
0.0
0.0
New
New
5.7
5.6
Source: The Danish Property Federation.
Û
I seems that there are still good times ahead for investment properties in Denmark in 2015. A total return of 5.4 percent is expected for 2015, which is 0.1 percentage points less than last quarter and unchanged compared to the same time last year. This corresponds to a slight increase in capital value and a reasonable return compared to other assets. In 2016, total return is expected to increase to 5.6 percent, which is unchanged compared to last quarter and last year, while total return in 2017 is expected to be 5.7 percent, giving an increase of 0.1 percentage point compared to last quarter.
The average total return based on the replies is presented in the table. Quarterly and annual changes are in percentage points.
In 2015, half of the participants expect a total return of between 5.0 and 5.9 percent 20% 18%
Increasing occupied space – especially for office During the next year, the participants expect that occupied space will still increase. Indicator values for all four sectors (office, retail, industry, and residential) are positive, and we also see a positive trend compared to last quarter. Especially office, where the participants in this quarter have changed their expectations more positively. Back in 1st quarter 2013, the participants expected continuous decrease in occupied space, while they now expect that occupied space for office increase the fastest. 61 percent of the participants expect that occupied space for office increase.
14% 12% 10% 8% 6% 4% 2% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: IPD Denmark Annual Property Index and the Danish Property Federation.
Û
Compared to last quarter, the expectations for capital values decreases slightly while expectations for market rent are almost unchanged compared to last quarter.
16%
Total return for investment properties. 2000 to 2014 shows the total return of IPD Denmark Annual Property Index. 2015 to 2017 shows the average of the replies from the consensus forecast. 50 percent of the replies lie within the blue lines.
Almost all indicator values are positive (indicator values between -100 og 100)
July 2015
Capital value Quarterly change
Annual change
Occupied space Quarterly Annual July 2015 change change
Office
26.6
-2.1
21.0
29.8
12.8
Retail
23.4
-2.1
16.7
12.8
4.3
-3.2
13.1
5.3
37.2
-6.4
2.8
13.8
Industry Residential
July 2015
Market rent Quarterly change
Annual change
18.7
13.8
3.2
17.2
6.4
2.8
17.0
0.0
10.4
2.1
10.9
-2.1
3.2
11.2
0.0
-6.2
25.5
-2.1
0.0
Source: The Danish Property Federation.
Û
The participants have answered: ‘very low’, ‘lower’, ‘unchanged’, ‘higher’, ‘much higher’. The answers give a value in order to obtain an indicator between -100 and 100. An indicator of 100 is identical to everyone having answered ‘much higher’, and -100 is identical to everyone having answered ‘very low’. An indicator of 0 indicates unchanged expectations. For example, an indicator of 29.8 is feasible by 29.8 percent of the participants answering ‘much higher’ and the remaining answers are ‘unchanged’.
Published by the Danish Property Federation