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THE DANISH PROPERTY FEDERATION MARKET STATISTICS – VACANCY COVERING THE PROFESSIONAL INVESTMENT PROPERTY MARKET IN DENMARK April 2016

Results

WEB REPORT

might adjust with a certain delay. At the moment, the economic vacancy for investment properties is impacted by market conditions, meaning that the economic vacancy is above the normal level.

• Decrease in office vacancy by with 0.3 percentage points • In two years, the economic vacancy rate for office has decreased by 4.4 percentage points in Copenhagen CBD

This goes especially for office, which over the last 15 years has had an average vacancy of approximately eight percent, which is four to five percentage points below the present level. It is therefore especially encouraging that the economic vacancy for office has decreased with 0.3 percentage point in the last quarter. Hopefully, this is the first sign of a future with more activity within the investment property market.

• Decrease in the spatial vacancy rates for all four sectors • Even lower vacancy rates for residential

The economic vacancy rate decreases with 0.1 percentage point

Increased activity within investment properties

The economic vacancy decreased in April 2016 with 0.1 percentage point compared to last quarter, while the economic vacancy is unchanged compared to last year.

The Danish society benefits from full employment and full activity within the property sector. As there will always be a certain unemployment, there will also be a certain economic vacancy.

The decrease in economic vacancy compared to last quarter is mainly due to office, which after having experienced an increased economic vacancy over the last three quarters has now experienced a decrease of 0.3 percentage point to 12.7 percent. From the statistics, office rentals included in both January and April 2016, we have

Two factors influence the level. One is the natural vacancy coming from moves and renovations. The other is determined by the state of the economy and that it takes time to adjust the supply with demand. While demand can change relatively quickly, the supply of premises

Table 1. Vacancy rates in April 2016

Economic vacancy rate Vacancy (percent)

Quarterly change (percentage points)

Annual change (percentage points)

Spatial vacancy rate Vacancy (percent)

Quarterly change (percentage points)

Annual change (percentage points)

Office

12.7

-0.3

1.3

14.6

-0.3

1.0

Retail

8.2

0.2

-1.9

7.6

-0.8

-1.1

Industry

13.4

0.2

0.4

13.7

-0.7

-1.1

Residential

3.0

-0.1

0.4

2.9

-0.1

0.4

Total

9.7

-0.1

0.0

10.8

-0.3

-0.2

Source: The Danish Property Federation Rem.: The vacancy rate covering all sectors also include rent and space for other commercial sectors and secondary premises.

Published by the Danish Property Federation

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THE DANISH PROPERTY FEDERATION MARKET STATISTICS – VACANCY COVERING THE PROFESSIONAL INVESTMENT PROPERTY MARKET IN DENMARK April 2016

WEB REPORT

Lower spatial vacancy rates

more rental-bearing value going from rented to vacant compared to vacant to rented. All things being equal, this means more lost rent and higher economic vacancy. One of the explanations to the decrease in economic vacancy for offices is that the rent for rented office rentals has increased, which shows a tendency for a total lower economic vacancy.

The spatial vacancy decreased in April 2016 with 0.3 percentage points to 10.8 percent. This is the lowest spatial vacancy since April 2014. Spatial vacancy decreased in all sectors. Spatial vacancy for industry at 13.7 percent is the lowest vacancy ever measured for industry, now including nine quarters. 14.6 percent of offices are vacant in April 2016 and this is a decrease of 0.3 percentage points compared to last quarter. Spatial vacancy is almost two percentage points higher than economic vacancy, meaning that it is typically cheap premises that are vacant.

There is also a slight decrease in economic vacancy for residential of 0.1 percentage point to 3.0 percent, which is 0.4 percentage points more compared to the same quarter last year. Residential continues to have a low economic vacancy. Retail and industry both experienced a slight increase of 0.2 percentage point compared to last quarter.

Figure 1. Development in economic vacancy Percent

Percent 25,0

20,0

15,0

10,0

0,0

Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. tOct. Oct. Jan. Apr. Jan. Jul. Apr. Oct. Jul. Jan. Oct. Apr. Jan. Jul. Apr. Oct. Jul. Jan. Oct. Apr. Jan. Jul. Apr. Oct. Jan. Jul. Apr. Oct. Jul. Jan. Apr. Jul. Oct.

5,0

2000

2001

2002

2003 OďŹƒce

2004

2005 Retail

2006

2007

2008 Industry

2009

2010

2011

2012

Residential

2013

2014

2015

Total

Source: The Danish Property Federation and own calculations based on data from IPD Danish Property Index and Oline-ED statistics. Anm.: Data from January 2014 and forward is from the Danish Property Federation. From 2001 to 2013, data is from IPD Danish Property Index has been processed based on differences in level in 2014. In year 2000, office data from Oline-ED statistics has been included. Methods are not identical, which is why there is a gap between October 2013 and January 2014. From January 2014 data is quarterly and before this annual. From 2014 there is a larger base of data.

Published by the Danish Property Federation

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THE DANISH PROPERTY FEDERATION MARKET STATISTICS – VACANCY COVERING THE PROFESSIONAL INVESTMENT PROPERTY MARKET IN DENMARK April 2016

Office

WEB REPORT

Vacancy rate in Copenhagen CBD is now down at eight percent The development in economic vacancy for office is moving in the right direction. The positive trend in the economic vacancy for office is evident in most of the country. Four out of five regions have experienced improvements since January. In the Capital Region, it is most evident for Copenhagen CBD with an economic vacancy of 8.0 percent in April 2016, which is a decrease of 2.4 percentage points compared to last year and 4.4 percentage points in two years. The economic vacancy in the Capital Region is 12.9 percent. The largest, quarterly decrease of the regions is found in the Sealand Region. The vacancy rate of 7.7 has decreased by 0.9 percentage point compared to last quarter and decreased by 2.0 percentage points compared to April last year. In other words, owners of office properties had a rental percent of 92.3 of the total rental-bearing value for office properties in the region, which is 5.0 percentage points better than national average. The economic vacancy for office increased by 2.4 percentage points in the Northern Jutland Region.

Retail

Minor increase in economic vacancy rates Retail rentals have increased by 0.2 percent compared to last quarter, so the economic vacancy is now 8.2 percent. In the Capital Region the economic vacancy is 7.6 percent with an increase of 0.1 percentage point compared to last quarter. Since January, the development in vacancy corresponds to the national development with increases of 0.2 percentage point in Copenhagen CBD and Other Copenhagen and area, while there is a decrease in vacancy of 0.6 percentage point in Northern Sealand. In the Sealand- and Southern Denmark Region development in vacancy is a little higher with an increased economic vacancy of 0.4 and 0.6 percentage point compared to last year, while the vacancy in the Mid Jutland Region now is the lowest compared to the other regions with a decrease of 1.2 percentage point ending at 6.6 percent. This is especially due to a decrease in vacancy in Other Mid Jutland. On the other hand, vacancy increased in the Northern Jutland Region with 4.0 percentage points since last quarter, and the economic vacancy is now at 12.3 percent.

Published by the Danish Property Federation

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THE DANISH PROPERTY FEDERATION MARKET STATISTICS – VACANCY COVERING THE PROFESSIONAL INVESTMENT PROPERTY MARKET IN DENMARK April 2016

Industry

WEB REPORT

Once again, vacancy increases a little Industry is still the sector with the highest economic vacancy. Despite quarterly decreases since July 2015, the vacancy has increased again in April to 13.4 percent. It is a modest increase of 0.2 percentage point since January 2016. Spatial vacancy has decreased with 0.7 percentage point since last quarter and 1.1 percentage points since April last year. Since last published statistic, it is now the Capital Region with the highest costs connected to industrial rentals. A quarterly increase of 0.5 percentage point gives a vacancy level of 15.0 percent in the region including 15.3 percent in Other Copenhagen and area. On the other hand, last quarter’s vacancy has decreased with 3.2 percentage points in the Sealand Region. In the Southern Denmark Region the economic vacancy increased with 4.4. percentage points since January and 1.3 percentage point since April 2015.

Residential

Decrease in economic vacancy rates The overall picture for residential shows a continuous growth in demand for residential. This is reflected in the low vacancy levels for residential through­out Denmark. At national level, the economic vacancy has been decreasing over the last two quarters. Looking further back, there has been a decreasing tendency in the economic vacancy for more than seven years, and in the same period the vacancy has been lower than for commercial properties, cf. figure 1. Regionally, the economic vacancy develops positive in the Capital Region, the Sealand Region, and the Mid Jutland Region with a decrease of 0.2, 0.1, and 0.3 percentage point respectively. On the other hand, the Southern Denmark Region and the Northern Jutland Region experience increasing vacancy rates with 0.2 and 1.1 percentage point respectively. Copenhagen CBD is the area that has had the most positive development with a decrease of 1.9 percentage point compared to last quarter, while Northern Sealand has increased by 1.3 percentage points. This means that Copenhagen CBD has an economic vacancy rate of 3.1 percent, while Northern Sealand has a vacancy rate of 4.0 percent.

Published by the Danish Property Federation

4


THE DANISH PROPERTY FEDERATION MARKET STATISTICS – VACANCY COVERING THE PROFESSIONAL INVESTMENT PROPERTY MARKET IN DENMARK April 2016 N

Ø

V

S

WEB REPORT

Geographical overview Northern Jutland Region

Aalborg

Mid Jutland Region

Aarhus Northern Seeland Capital Region

Other Copenhagen & area

Triangle area Seeland Region

Southern Denmark Region

Odense

Western and Southern Seeland

Copenhagen CBD Eastern Seeland

Source: The Danish Property Federation.

Copenhagen CBD

Christiansborg

Copenhagen CBD covers the zip codes: 900, 1000-1559,

Tivoli

1562-1609, 1611-1614. Source: The Danish Property Federation.

Published by the Danish Property Federation

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THE DANISH PROPERTY FEDERATION MARKET STATISTICS – VACANCY COVERING THE PROFESSIONAL INVESTMENT PROPERTY MARKET IN DENMARK April 2016

WEB REPORT

Table 2. Office Economic vacancy rate

Capital Region Copenhagen CBD

Spatial vacancy rate

April 2016 (percent)

Quarterly change (percentage points)

Annual change (percentage points)

April 2016 (percent)

Quarterly change (percentage points)

12.9

-0.4

1.4

14.8

-0.3

1.2

Annual change (percentage points)

8.0

-1.0

-2.4

8.9

-0.6

-2.2

Other Copenhagen and area

13.8

-0.2

2.5

15.6

-0.1

2.0

Northern Sealand

22.7

-1.4

2.8

24.1

-0.6

3.7

Sealand Region

7.7

-0.9

-2.0

10.7

-0.8

-1.8

10.0

-0.6

-3.5

11.9

-2.2

-6.3

12.5

-0.7

1.3

14.3

-4.2

-1.8

13.7

-0.1

3.9

16.3

0.4

4.3

15.1

0.1

4.8

17.4

0.6

5.5

8.1

-0.8

0.3

12.2

-0.8

0.2

Northern Jutland Region

12.6

2.4

3.1

14.5

2.6

4.2

Total

12.7

-0.3

1.3

14.6

-0.3

1.0

Southern Denmark Region Odense Mid Jutland Region Aarhus Other Mid Jutland

Source: The Danish Property Federation.

Table 3. Retail Economic vacancy rate

Spatial vacancy rate

April 2016 (percent)

Quarterly change (percentage points)

Annual change (percentage points)

April 2016 (percent)

Quarterly change (percentage points)

Annual change (percentage points)

7.6

0.1

-2.8

6.6

-1.1

-2.3

Copenhagen CBD

1.4

0.2

-1.2

1.3

0.3

-0.8

Other Copenhagen and area

9.3

0.2

-3.7

7.4

-1.8

-3.7

10.6

-0.6

2.4

11.5

-0.6

3.7

Capital Region

Northern Sealand Sealand Region

12.3

0.4

-3.0

10.8

0.3

-1.5

Eastern Sealand

11.6

1.4

-0.9

9.9

1.6

0.4

Western and Southern Sealand

13.9

-2.7

-6.8

12.1

-1.8

-4.5

7.4

0.6

0.1

8.0

1.3

-0.2

Southern Denmark Region The Triangle Area

8.6

0.5

-0.1

9.1

1.6

-0.3

Mid Jutland Region

6.6

-1.2

2.6

8.2

-2.0

4.4

Aarhus

5.1

-0.4

0.2

-0.9

Other Mid Jutland

9.7

-4.1

12.3

4.0

8.2

0.2

Northern Jutland Region Total

4.3

-1.1

13.5

-5.1

-2.6

9.4

-0.8

-3.0

-1.9

7.6

-0.8

-1.1

*

*

Source: The Danish Property Federation.

Published by the Danish Property Federation

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THE DANISH PROPERTY FEDERATION MARKET STATISTICS – VACANCY COVERING THE PROFESSIONAL INVESTMENT PROPERTY MARKET IN DENMARK April 2016

WEB REPORT

Table 4. Industry Economic vacancy rate

Spatial vacancy rate

April 2016 (percent)

Quarterly change (percentage points)

Annual change (percentage points)

April 2016 (percent)

Quarterly change (percentage points)

Annual change (percentage points)

15.0

0.5

0.8

14.9

-0.1

-1.1

Copenhagen CBD

13.8

-1.1

2.3

26.5

1.1

2.6

Other Copenhagen and area

15.3

0.7

0.6

14.1

-0.1

-1.3

Northern Sealand

13.3

0.7

0.5

14.3

0.4

-0.7

Sealand Region

14.3

-3.2

2.6

10.5

-7.5

-4.4

Southern Denmark Region

13.4

4.4

1.3

19.4

2.9

3.1

5.9

-1.3

0.8

7.2

-2.2

-0.4

7.8

0.0

-1.3

8.8

0.0

-5.8

13.4

0.2

0.4

13.7

-0.7

-1.1

Capital Region

Mid Jutland Region Aarhus Total Source: The Danish Property Federation.

Table 5. Residential Economic vacancy rate

Spatial vacancy rate

April 2016 (percent)

Quarterly change (percentage points)

Annual change (percentage points)

April 2016 (percent)

Quarterly change (percentage points)

Annual change (percentage points)

3.0

-0.2

0.7

2.7

-0.2

0.4

Copenhagen CBD

3.1

-1.9

-2.2

3.0

-1.3

-1.7

Other Copenhagen and area

2.7

-0.2

0.7

2.5

-0.2

0.4

Northern Sealand

4.0

1.3

3.0

3.8

1.2

2.5

Capital Region

Sealand Region

4.2

-0.1

3.2

5.1

-0.3

3.6

Eastern Sealand

2.6

-0.1

2.4

2.5

-0.1

2.2

Western- and Southern Sealand

4.9

-0.1

3.4

6.0

-0.3

3.8

Southern Denmark Region

2.1

0.2

-0.2

1.9

0.1

-0.1

Odense

1.6

-0.1

1.3

1.7

-0.1

1.3

The Triangle Area

3.3

1.1

1.0

2.8

0.6

0.9

Other Southern Denmark

1.6

-0.2

-1.7

1.5

-0.3

-1.6

3.8

-0.3

-2.3

3.4

-0.3

-1.7

Aarhus

3.5

-0.4

-2.2

2.8

-0.4

-1.3

Other Mid Jutland

5.2

0.3

-2.7

5.1

0.2

-2.7

Mid Jutland Region

Northern Jutland Region

2.7

1.1

1.2

3.2

1.3

1.3

Aalborg

2.4

1.2

1.2

2.6

1.3

1.4

Other Northern Jutland

5.2

0.1

1.5

7.8

0.8

2.1

3.0

-0.1

0.4

2.9

-0.1

0.4

Total Source: The Danish Property Federation.

Published by the Danish Udgivet Property af Ejendomsforeningen Federation Danmark 7


THE DANISH PROPERTY FEDERATION MARKET STATISTICS – VACANCY COVERING THE PROFESSIONAL INVESTMENT PROPERTY MARKET IN DENMARK April 2016

WEB REPORT

About the Market Statistics This web report is published 27 May 2016. Next planned publishing is mid-August 2016. The report has been based on data from: 2 + 3 Ejendomme, Aberdeen Asset Management, Alm. Brand, Andersen Partners Ejendomsadministration P/S, AP Pension, ATP, Bevica Fonden, Carlsbergfondet, CEJ Ejendomsadministration, Coller Capital, CS Pensionsfond, CW Obel Ejendomme, DADES, Danica, Dansk Sygeplejeråd, Danske Bank, DATEA, DEAS, DIP, Ejendomsselskaberne Grønløkkevej 10, Fast Ejendom Danmark, FrederiksbergFonden, Færchfonden, Grosserer Schiellerup og Hustrus Fonde, Gudbjørg og Ejnar Honorés Fond, Højgaard Ejendomme, Industriens Pension, Jammerbugt Kommune, Jeudan, Jorcks Ejendomsselskab, JØP, KIRKBI A/S, Kramers Legat, LB Forsikring, Lægernes Pensionskasse, Lærernes Pension, Niam, Nordea Ejendomme, Nordea Liv og Pension, North Property Asset Management, NREP, PBU, PenSam, PensionDanmark, Pensionskassen for Farmakonomer, PFA, PKA, Sampension, SEB, SPG Omsorg DK1, Steen & Strøm, Taurus Ejendomsadministration, TDC Pensionskasse, Topdanmark, Tryg, Unipension, Valad and Aage Larsens Boligudlejning. The portfolios have approx. 65.000 rentals corresponding to an annual lease value of DKK 16.7 bn and 14.1 m m2. In order to compare, the statistical base in April 2015 was a lease value of DKK 13.6 bn and 12.2 m m2. The calculation of the economic vacancy rate is based on the actual rent. Thus, economic vacancy is defined as the sum of actual rent in vacant rentals divided by the sum of actual rent for rented and vacant rentals in the statistic. The Market Statistics is based on quarterly processed property data for rentals and vacancies within the period in question. This web report has been closed as per 31 March 2016 and is called April 2016. The quarterly change is from April 2016 (closed as per 31 March 2016) compared to January 2016 (closed as per 31 December 2015). The annual change is from April 2016 (closed as per 31 March 2016) compared to April 2015 (closed as per 31 March 2015). We have chosen not to publish data, where the data is not sufficient to give a valid and representative result or in combinations where only one or few portfolios are represented. For further information regarding this web report, please contact Chief Economist Morten Marott Larsen, mml@ejendomsforeningen.dk, phone +45 28 45 56 51.

Published by the Danish Property Federation

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Profile for EjendomDanmark

EjendomDanmark marked statistics - Vacancy (april 2016)  

- Decrease in office vacancy by with 0.3 percentage points - In two years, the economic vacancy rate for office has decreased by 4.4 percent...

EjendomDanmark marked statistics - Vacancy (april 2016)  

- Decrease in office vacancy by with 0.3 percentage points - In two years, the economic vacancy rate for office has decreased by 4.4 percent...

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