October 2019
The Danish Property Federation’s market statistics – Consensus Forecast • Expectation of 5.4 percent total return in 2019 • Largest faith in industrial property – mostly for capital value and market rent. • The property owners have more negative expectations than the rest of the property business. • The Triangle Area achieves the best survey since 2011
Decreasing total return Over the next five years, the property business expects a total return of 5.2 percent, which is a 0.1 percentage point drop since last quarter. In the last four years, the total return has been an average of 6.7 percent. In 2019, a total return is expected to be 5.4 percent, which is a drop of 0.1 percent since last quarter. The total return in 2020 is expected to be 5.2 percent, which is also a decrease of 0.1 percentage points compared to last quarter.
The fear of a future recession and political unrest means lower expectations to the total return.
The expectations can be divided between the participants who are owners, commercial brokers and other property players. Here, it is the property owners who have the lowest expectations to the total return in the future. In 2019, the owners expect that the total return is 5.2 percent, the commercial brokers expect a return of 5.4 percent, while other property players expect a total return of 57 percent. The difference becomes smaller if you
The property owners have slightly more negative expectations than commercial brokers and other property players.
The total return is expected to be 5.2 percent in the period from 2019-2023 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
-0.1
Annual change
0.1
-0.1
Ny
Ny
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
16 % expect a total
8% of 7 percent or more
return below 5 percent.
57 % expect a total return of between 6 and 5 percent.
12 %
expect a total return
18 %
59 % decreaseng
return of
total return.
6 percent.
total return.
expect a
expect a total between 7 and
expect an increasing
29 % expect an unchanged total return.
1