October 2021
The Danish Property Federation’s Market Statistics – Consensus Forecast • The property business is no longer shocked by Corona • However, the total return still decreases. • Largest expectations to industry • The Triangle Area experiences progress
The Corona shock is over After the Corona shock hit in 2020, it is now the fifth quarterly survey in a row, where the expectations have either progressed - or has stabilised on an overall national level for all sectors. There are still negative expectations to retail properties, but the expectations to retail properties were even more negative before Corona than they are now. However, the total return is still expected to decrease compared to 2020, when it was 6.0 percent. In 2021, the total return is expected to be 5.6 percent. That is a decrease of 0.1 percentage points compared to last quarter but an improvement of 0.9 percentage points compared to the same time last year. In 2021 and 2022, the total return is expected to be 5.1 percent. Over the whole period 2000-2020, properties have given 7.1 percent in average total return. Highest expectations to industrial Among the four sectors, there are highest expectations to industrial and that applies to both capital value, occupied space and market rent. It is only five years ago, that there were lowest expectations to industrial. It is probably especially the expectations to logistics properties that drive the expectations to industrial upwards. In 2020, the direct return on industrial was the highest with 4.9 percent, while the value increment was a modest 0.1 percent.
/ In the entire period from 20212025, we expect an annual total return of 5.1 percent. /
/ The total return must cover financial costs, inflation and risk. /
Figure 1. The participants’ expectations For 2021
30 %
Development in total yield from 2021 to 2023
12 %
expect a total yield of 5 percent or
21 %
below.eller
expect a total yield between 7 and 6 percent.
37 %
21 %
expect a total yield of 7 percent or more.
51 %
expect an increase in total yield.
expect a decrease in total yield.
28 %
expect an unchanged total yield.
expect a total yield between 6 and 5 percent.
1