The Danish Property Federation´s market statistics - consensus forecast (January 2017)

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THE DANISH PROPERTY FEDERATION MARKET STATISTICS – CONSENSUS FORECAST COVERING THE PROFESSIONAL INVESTMENT PROPERTY MARKET IN DENMARK January 2017

WEB REPORT

In the period 2016-2020 a total return of 5.8 percent is expected

Results • Total return for investment properties expected to be 5.9 percent in 2016 • Never has so much been expected of the results for the Industry sector • Never have expectations for capital value growth for the office sector been higher • Progress for Odense and Aalborg

The election of Donald Trump had no effect At the time of Brexit, the participants lowered their expectations, but the election of Donald Trump had no immediate impact on expectations. Expectations for total return remain unchanged compared to last quarter. Total return in 2016 is expected to be 5.9 percent, which is an increase of 0.3 percentage points compared to expectations a year ago. Total return in 2017 is expected to be a little less, 5.8 percent, which is an increase of 0.1 percentage point compared to last year.

2016

2017

2018

20162020

Total return

5.9

5.8

5.8

5.8

Quarterly change

0.1

0.0

0.0

0.0

Annual change

0.3

0.1

New

New

Source: The Danish Property Federation Market Statistics. The average total return based on the replies is presented in the table. Total return is in percentage and shows return on investment property compared to the size of the investment in a given period. Total return consists of two types of returns: Direct return and return on value. Direct return is current net operating profit of the period divided by investments size at the beginning of the period. Return on value is the value added in the given period divided by the size of investment at beginning of period.

In 2018 half of the participants expect a total return between 5.4 percent and 6.0 percent 20% 18% 16% 14% 12% 10% 8% 6% 4%

Half of the participants expect that total return in 2016 will lie between 5.3 and 6.5 percentage points. In 2017 half of the participants believe that total return will lie between 5.2 percent and 6.0 percent. Almost three out of four participants expect total return to remain unchanged or decrease from 2016 to 2017.

2% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: IPD Denmark Annual Property Index and the Danish Property Federation Market Statistics. Total return for investment properties. 2000 to 2015 shows the total return of IPD Denmark Annual Property Index. 2016 to 2018 shows the average of the replies from the Consensus Forecast. 50 percent of the replies lie within the blue lines.

Slight increase in expectations to capital value (indicator values between -100 and 100)

Capital Value January 2017

Quarterly change

Occupied space

Annual change

January 2017

Quarterly change

Market rent

Annual change

January 2015

Quarterly change

Annual change

Office

34.4

5.7

4.4

17.8

-1.4

-8.9

16.7

-1.4

1.1

Retail

25.6

4.3

5.6

5.6

2.4

-7.8

11.1

-5.9

-4.4

Industry

23.3

8.4

15.6

20.0

11.5

11.1

17.8

9.3

14.4

Residential

32.2

4.6

2.2

7.8

-1.8

-5.6

16.7

-6.7

-10.0

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 34.4 is feasible by 34.4 percent of the participants answering ‘much higher’ and the remaining answers are ‘unchanged’.

Published by the Danish Property Federation


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