THE DANISH PROPERTY FEDERATION MARKET STATISTICS – CONSENSUS FORECAST COVERING THE PROFESSIONAL INVESTMENT PROPERTY MARKET IN DENMARK October 2015
Good times The participants in the market statistics consensus forecast expect the total return to be 5.5 in 2015, which is an increase of 0.1 percentage points compared to third quarter and 0,2 percentage points compared to last year. The next two years, the participants expect the total return to increase from 5.6 to 5.7 percent, which is a flat rate compared to last quarter. In 2015 2019 a total return of 5.6 percent is expected. Even though the participants expect acceptable total return in the years 2015 – 2019, total return is still below the last fifteen years average of approx. eight percent. Only about one tenth of the participants believe that the total return will reach 7.0 percent or above in 2015. Another ten percent expects a total return of 4.3 percent or below.
All indicators are positive for the first time ever
WEB REPORT
The property industry’s expectations for 2015 increase 2015
2016
2017
20152019
Total return
5.5
5.6
5.7
5.6
Quarterly change
0.1
0.0
0.0
0.0
Annual change
0.2
0.0
New
New
Source: The Danish Property Federation Market Statistics. The average total return based on the replies is presented in the table. Quarterly and annual changes are in percentage points.
Half the property industry expects a total return of between 5.0 and 5.8 in 2015 20% 18% 16%
For the first time since this survey was established (January 2011), all indicators covering all sectors are positive. This indicates that the property industry expects increasing capital value, occupied space and market rent for office, retail, industry and residential. The prospects for industry has earlier been negative, but this quarter, the market rent expectations for industry is now positive. It shows that this positive feeling makes industry an attractive sector for investors. 21 percent of the participants expect the coming year to show an increase in market rent covering industry, while only six percent believe that it will decrease. The rest expects it to be flat.
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 Market Statistics. 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.
Especially, when it comes to market rent, indicator values for all four sectors have never been higher than this
For the first time ever, all indicators are above zero (indicator values between -100 and 100)
Capital value October 2015 Office
26.5
Retail Industry Residential
Quarterly change
Occupied space
Annual change
October 2015
Quarterly change
Market rent
Annual change
October 2015
Quarterly change
Annual change
-0.1
13.1
30.4
0.6
19.3
18.6
4.8
20.8
28.4
5.0
11.8
17.6
4.9
11.0
23.5
6.5
14.6
16.7
12.4
22.2
7.8
2.5
-2.2
6.9
9.0
15.8
35.3
-1.9
-2.5
12.7
-1.1
-1.7
31.4
5.8
3.6
Source: The Danish Property Federation Market Statistics. 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 35.3 is feasible by 35.3 percent of the participants answering ‘much higher’ and the remaining answers are ‘unchanged’.
Published by the Danish Property Federation