April 2022
The Danish Property Federation’s Market Statistics - Consensus Forecast • The expectations for total return on properties are increasing • The total return is expected to be 6.8 percent in 2022 • Significantly better expectations to retail • Highest expectations to the development in office properties
Increasing expectations – but large uncertainty The total return is expected to increase to 6.8 percent in 2022. That is an increase of 1.7 percentage points compared to last quarter and an increase of 1.6 percentage points compared to the same time last year. An expectation of 6.8 percent in a single year has not been higher in the 12-year period in which expectations to the total return has been measured. The expectations to the whole period 2022-2026 is 5.6 percent, which is the best expectation for a future 5-year period in almost 5 years. But there is large uncertainty among the participant. Half of the participants expect a total return between 5.1 and 8.0 percent in 2022, while the other half expect total returns that are either higher than 8.0 percent or lower than 5.1 percent.
/ Expectations for the total return are increasing. /
/ But the uncertainty of the total returns is also increasing. /
The uncertainty can also be seen from the invasion of Ukraine on 24 February, where the data for this collection took place during the course of February. We will have to wait for the next surveys to see how the invasion affects the total return in 2022. Highest expectations to office As it can be seen in figure 1, office now has the highest expectations. The best expectations to office are measured in 2018. The last two years, the expectations to office have increased. The largest increase in expectations are, however, in retail. There were overall
Figure 1. The expectations to retail are the best since 2018 40 30
Office
20
Retail
10
Industry
0 -10
111
311 112 312 113 313 114 314 115 315 116 316 117 317 118 318 119 319 120 320 121 321 122
Residential
-20 -30 -40 -50 Source: The Danish Property Federation’s Market Statistics. The answers are given a value in order to achieve an indicator between -100 and 100 for the four different property sectors regarding capital value, occupied space and market rent. An indicator of 100 means that everybody has answered “much higher”, and -100 means that everybody has answered “much lower”.
1