July 2019
The Danish Property Federation’s market statistics – Consensus Forecast • A total return on 5.4% is expected in 2019 • Uncertainty in the expectations for retail • Regression in Copenhagen, Aarhus, Odense and Aalborg • The market rent for office in Copenhagen is expected to increase with 2.6% in 2019
Expectations of lower total return of up to DKK 20bn The total return in 2018 was 7.1% and the expected total return in 2019 is 5.4%. It corresponds to a decrease in total return of up to DKK 20bn. In 2018, properties yielded a return of about DKK 70bn. After a major decline in expectations beginning in 2017, the last two quarters have been largely positive. The total return is expected to be 5.4% in 2019, which is an increase of 0.1 percentage points compared to the last quarter. In 2020 and 2021, the total return is expected to decrease to 5.2% and 5.1% There is a large difference between the expectations of the participants. 50% of the participants expect a return in 2019 between 5.1% and 6.0%. Only 5% of the participants expect a total return of or over 7%, while 14% expect a total return below 5% in 2019.
The fundamentally healthy Danish economy supports the positive total return.
5.2% is still the most negative measurement for a future five-year period measured since 2011.
The total return of 7.1% in 2018 is expected to decrease in the future Table 1
Historic 2018
2019
2020
2021
2019-2023
7.1
5.4
5.2
5.1
5.2
Quarterly change
0.1
0.1
0.0
0.0
Annual change
0.0
-0.2
New
New
Total return
Source: The Danish Property Federation’s market statistics. See remarks on page 4.
Figure 1. The participants’ expectations For 2019
For the development in total return 2019-2021
5%
14%
14%
expect a total return
expect a total
of 7% or above.
return of less
30%
than 5%
expect a total
51%
return between
expect a total return between
6 to 7%
51%
expect an increase in total return.
expect a decline in total return.
35% expect status quo in total return.
6 to 5%.
1