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Ejendomsforeningen Danmarks markedsstatistik – tomgang, oktober 2017

The Danish Property Federation Market Statistics

October 2017

WEB REPORT VACANCY

Results • Economic vacancy remains at a low level • Office vacancy has decreased five quarters in a row • Retail increases 0.2 percentage points but is 7.3 percentage points below the peak in January 2013 • Still low vacancy for residential

The end of 2017 establishes a solid foundation for 2018 After a strong year for investment properties and with the prospect of a solid close of 2017, the foundation for the Danish economy looks strong in the time to come. Although the expectations for the investment market are peaking in 2017, as well as the expectations for the coming years’ average return on investment properties seems to decrease a little, the industry still has positive expectations for the future . The demand for real estate is offset by increased construction. According to a business cycle analysis from the Danish Construction Association from October

2017, a small increase is expected within all sectors in commercial construction. Employment within real estate development is expected to increase with approximately 20 percent in the period from 2016 to 2019. Initiated commercial construction is also expected to increase from 2.2 million square meters in 2016 to 2.7 million square meters in 2019. The consumer confidence, that is compiled by Statistics Denmark, is also positive although there is a conservative decrease over the last three months from August to October 2017. Furthermore, Statistics Denmark estimate the unemployment rate which has been stable in 2017 with a small decline from July to August.

Table 1. Vacancy rates in October 2017 Economic vacancy

Office Retail

Spatial vacancy

Vacancy (percent)

Quarterly change (percentage points)

Annual change (percentage points)

Vacancy (percent)

Quarterly change (percentage points)

Annual change (percentage points)

11.2

0.0

-1.0

12.6

-0.4

-1.1

6.8

0.2

-1.5

6.5

0.3

-1.4

11.1

0.5

-0.8

10.8

0.2

-1.0

Residential

3.5

0.1

0.7

3.2

0.1

0.5

Other commercial

7.9

0.4

7.3

-0.7

Total

8.3

0.0

9.3

0.3

Industry

-0.7

-0.4

Source: The Danish Property Federation. Rem.: The Vacancy rates for all sectors also include actual annual rent and space for other commercial and secondary spaces. Published by

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The Danish Property Federation Market Statistics, October 2017

INTERAKTIV WEBRAPPORT TOMGANG

Altogether, there are positive, but also in certain areas vaguer, expectations for the nearest future. Among other things, an increased retail turnover and office employment suggest that there is still a foundation for future decrease in vacancy for investment properties.

centage points at national level. In the other sectors, there are marginal increases compared to July 2017.

Decrease in vacancy on hold

In the sector Other Commercial the economic vacancy has increased since July 2017. The level at 7.9 percent is still below the average for commercial leases and below national average.

Despite the positive notes, the level of the total economic vacancy from July 2017 is maintained at 8.3 percent in October 2017. As such, property investors can look forward to 2017 ending at a low vacancy level due to quarterly decreases since April 2016. It is the overall development in office that keeps the vacancy at bay with a marginal decrease of 0.049 per-

Office has the highest vacancy among the sectors with 11.2 percent. Although it is 1.0 percentage points below the level for October 2016 a lower level can still be expected in the long-term.

Spatial vacancy for office decreases with 0.4 percentage points compared to July 2017. Nevertheless, increase within retail, industry, and residential causes the total spatial vacancy over the last three months to increase by 0.3 percentage points to 9.3 percent.

Figure 1. Development in economic vacancy Percent 25,00

20,00

15,00

10,00

5,00

Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt. Jan. Apr. Jul. Okt.

0,00 2000

2001

2002

2003

2004

2005

2006

OfďŹ ce

2007

Retail

2008

2009

Industry

2010

2011

Residential

2012

2013

2014

2015

2016

2017

Total

Source: The Danish Property Federation and own calculations based on data from IPD Danish Property Index and Oline-­ ED statistics. Note: Data from January 2014 and onwards is from The Danish Property Federation. From 2001 to 2013 is data from IPD Danish Property index based on difference in level in 2014. In year 2000, office data from The Danish Property Federation incorporated. Calculations method differs, hence there is data breaches between October 2013 and January 2014. From January 2014 the publication is divided quarterly, while it is yearly before 2014. Therefore, from 2014 there is a bigger data base.

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The Danish Property Federation Market Statistics, October 2017

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Office – Vacancy decreases in Copenhagen and Aarhus The economic vacancy for office decreases by 0.049 percentage points in October 2017 but due to rounding it is not visible in the figures and is now at 11.2 percent. Compared to October 2016 the economic vacancy has decreased by 1.0 percentage points and is now at the lowest level since July 2012. The reason for the small decrease is that the annual rent for rented leases increases a bit compared to the rent in vacant leases which have decreased a little. The spatial vacancy for office decreases by 0.4 percentage points and is now at 12.6 percent. Compared to October 2016 the spatial vacancy has decreased by 1.1 percentage points. In the Capital Region the economic vacancy for office has decreased by 0.2 percentage points to 11.2 percent. This is mainly due to a decrease in the economic vacancy in Copenhagen CBD of 1.1 percentage points ending at 4.5 percent. In Other Copenhagen Municipal there is also a minor decrease while the Northern Zealand Region increases. In the Mid Jutland Region, the economic vacancy decreases by 0.5 percentage points to 9.0 percent. Aarhus contributes with a decrease of 0.7 percentage points ending at 9.5 percent which is a decrease of 6.2 percentage points compared to October 2016. In the Zealand Region, the Southern Denmark Region, and the Northern Jutland Region, the economic vacancy increases with 4.9, 0.3, and 1.4 percentage points respectively.

Retail – Major decrease replaced by a small increase Although there is a smaller increase from July to October, retail is still the commercial sector with the lowest national vacancy level at 6.8 percent. The increase of 0.2 percentage points from July to October 2017 is minor compared to the larger decrease of approximately 1.5 percentage points from April to July 2017, cf. figure 1. The development is the result of different geographical changes in the vacancy level for retail leases. The Danish Property Federation Market Statistics – Vacancy for October 2017 shows that the vacancy level in the Capital Region overall is steady. This is based on a quarterly increase of 0.7 percentage points in Copenhagen CBD and decreases of 0.3 percentage points in both Other Copenhagen Municipal and the Northern Zealand Region. In the Mid Jutland Region and the Southern Denmark Region there are increases in the retail vacancy of 1.1 percentage points and 1.5 percentage points respectively, mainly due to changes in Aarhus and the Triangle Area of 1.9 percentage points and 2.1 percentage points respectively. On an annual basis the changes are relatively small with 0.2 and 0.9 percentage points respectively. In the Northern Jutland Region there is a smaller increase of 0.2 percentage points, including an increase of 0.6 percentage points in Aalborg.

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The Danish Property Federation Market Statistics, October 2017

INTERAKTIV WEBRAPPORT TOMGANG

Industry – Small increase in vacancy The economic vacancy for industry increases by 0.5 percentage points from 10.6 percent in July 2017 to 11.1 percent in October 2017. The increase in the economic vacancy for industry is due to vacancy rent has been revised upwards and that more leases are now vacant. However, compared to October last year it is still a decrease of 0.8 percentage points in economic vacancy. The spatial vacancy also increases although only by 0.2 percentage points to 10.8 percent. Compared to October 2016 there has been a decrease in the spatial vacancy of 1.0 percentage points. The increase in the economic vacancy derives in part from the increase in the Southern Denmark Region. In the Capital Region the economic vacancy is almost unchanged at 11.6 percent, however, decreased by 1.3 percentage points since last year. In the Zealand Region, the economic vacancy increases by 1.3 percentage points but decreases by 3.4 percent compared to October 2016. The Mid Jutland Region is the only region where the economic vacancy decreases. It is now 4.0 percent after a decrease of 1.1 percentage points compared to July 2017.

Residential – The vacancy level remains low Despite a small increase in the economic vacancy for residential the level remains low and is still much lower than the level for commercial leases. The increase in economic vacancy for residential is 0.1 percentage points compared to July 2017. On an annual basis, the increase is a little higher at 0.7 percentage points. This increase is mainly caused by an increase of leases that have changed status from rented to vacant than the other way around. Additionally, a small part of the change is due to new leases entering the statistic. Further explanations can be the increased level of investment and development in residential in Copenhagen CBD and Aarhus. This contributes to a shorter period of vacancy. As observed in figure 1, the economic vacancy for residential has been cut in half since the peak during the financial crisis in 2009, where the vacancy was approximately seven percent. In average, the economic vacancy for residential fluctuates less compared to other sectors and is generally at a lower vacancy level only interrupted by the period from summer 2007 to summer 2009. In the Northern Jutland Region, the economic vacancy for residential decreases by 0.7 percentage points compared to last quarter. After three quarters of increase in the economic vacancy for residential in Other Northern Jutland there is now a decrease of 0.8 percentage points. The economic vacancy for residential is increasing in the other four regions although it is only minor changes of for example an increase of 0.1 percentage points in the Capital Region.

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The Danish Property Federation Market Statistics, October 2017

INTERAKTIV WEBRAPPORT TOMGANG

Geographical overview Copenhagen CBD

Lynettehavnen

Margretheholm

Kongebrovej

Christiansborg Christianshavn

Tivoli

Northern Jutland Region

Aalborg

Mid Jutland Region

Aarhus Northern Zealand Capital Region

Triangle Area

Copenhagen Centre Zealand Region

Southern Denmark Region

Odense

Western and Southern Zealand

Eastern Zealand

Other Copenhagen Municipal Other Capital Region

Source: The Danish Property Federation. Rem.: Copenhagen CBD covers the zipcodes: 900, 1000-1559, 1562-1609 og 1611-1614. CBD stands for Central Business District.

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The Danish Property Federation Market Statistics, October 2017

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Table 2. Office Economic vacancy

Capital Region Copenhagen Centre

Spatial vacancy

October 2017 (percent)

Quarterly change (percentage points)

Annual change (percentage points)

October 2017 (percent)

Quarterly change (percentage points)

Annual change (percentage points)

11.2

-0.2

-1.0

12.5

-0.6

-1.2

4.5

-1.1

-0.9

4.6

-1.3

-1.2

Other Copenhagen Municipal

12.6

-0.2

-1.2

13.8

-0.7

-1.3

Northern Zealand

22.8

4.2

1.0

21.2

3.9

1.0

12.5

4.9

3.4

14.6

4.2

3.4

Zealand Region Eastern Zealand

9.3

0.0

-0.4

14.4

1.0

1.0

12.8

0.3

2.2

15.7

-1.1

2.0

Odense

17.5

3.7

2.7

18.1

1.5

-1.0

Triangle Area

14.7 9.0

-0.5

-4.6

10.5

-0.2

-4.9

Aarhus

9.5

-0.7

-6.2

10.5

0.4

-6.6

Other

7.5

0.3

1.0

10.4

-2.1

0.5

13.4

1.4

1.3

15.1

1.3

0.9

13.7

1.8

1.4

16.0

1.8

1.3

11.2

0.0

-1.0

12.6

-0.4

-1.1

Southern Denmark Region

Mid Jutland Region

Northern Jutland Region Aalborg Total

19.6

Source: The Danish Property Federation.

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The Danish Property Federation Market Statistics, October 2017

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Table 3. Retail Economic vacancy

Capital Region

Spatial vacancy

October 2017 (percent)

Quarterly change (percentage points)

Annual change (percentage points)

October 2017 (percent)

Quarterly change (percentage points)

Annual change (percentage points)

6.7

0.0

-0.7

6.0

0.2

-0.6

Copenhagen Centre

3.9

0.7

1.4

3.4

0.4

1.7

Other Copenhagen Municipal

7.6

-0.3

-1.1

6.4

0.2

-1.3

10.1

-0.3

0.3

9.7

0.1

-0.5

9.8

-0.3

-2.6

8.9

-0.3

-2.8

9.1

0.0

-2.6

7.0

0.2

-3.4

11.4

-1.3

-2.7

11.7

-1.0

-1.8

7.5

1.5

0.0

7.2

1.0

-0.4

8.1

2.1

0.9

8.1

1.4

0.6

6.1

1.1

-1.4

6.7

0.3

-2.7

Aarhus

5.3

1.9

0.2

4.9

1.3

0.3

Other

7.3

-0.5

-5.5

8.7

-1.1

-7.4

3.5

0.2

-13.2

5.6

0.9

-6.6

3.9

0.6

6.6

1.3

6.8

0.2

6.5

0.3

Northern Zealand Zealand Region Eastern Zealand Western and Southern Zealand Southern Denmark Region Triangle Area Mid Jutland Region

Northern Jutland Region Aalborg Total

-1.5

-1.4

Source: The Danish Property Federation.

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The Danish Property Federation Market Statistics, October 2017

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Table 4. Industry Economic vacancy October 2017 (percent) Capital Region

Quarterly change (percentage points)

Spatial vacancy

Annual change (percentage points)

October 2017 (percent)

Quarterly change (percentage points)

Annual change (percentage points)

11.6

0.1

-1.3

11.4

0.4

-1.1

Copenhagen Centre

12.9

-1.4

-0.1

15.8

-2.3

-8.3

Other Copenhagen Municipal

10.9

0.1

-2.1

10.5

0.3

-1.0

Northern Zealand

18.6

1.5

7.2

19.9

4.7

7.4

Zealand Region

13.4

1.3

-3.4

10.4

1.4

-1.8

Southern Denmark Region

18.5

7.9

6.9

18.5

-3.1

2.2

Mid Jutland Region

4.0

-1.1

-1.3

4.7

-1.1

-1.9

4.0

-0.3

-1.3

4.5

0.4

-2.1

11.1

0.5

-0.8

10.8

0.2

-1.0

Aarhus Total

Source: The Danish Property Federation.

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The Danish Property Federation Market Statistics, October 2017

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Table 5. Residential Economic vacancy October 2017 (percent) Capital Region

Spatial vacancy

Quarterly change (percentage points)

Annual change (percentage points)

October 2017 (percent)

Quarterly change (percentage points)

Annual change (percentage points)

3.6

0.1

0.6

3.1

0.1

0.4

Copenhagen Centre

5.0

-0.2

0.9

4.0

0.1

0.6

Other Copenhagen Municipal

3.5

0.1

0.9

3.0

0.0

0.6

Northern Zealand

2.7

0.8

-0.9

2.5

0.5

-1.0

2.8

0.7

-0.4

3.5

0.7

-0.5

Eastern Zealand

1.5

0.7

-0.7

1.5

0.7

-0.8

Western and Southern Zealand

3.3

0.6

-0.3

4.1

0.6

-0.5

2.1

0.4

0.6

2.1

0.4

0.6

Odense

1.4

-0.5

0.3

1.5

-0.4

0.4

Triangle Area

2.0

0.0

0.9

2.0

0.2

1.0

Other Southern Denmark Region

2.8

1.5

0.7

2.8

1.4

0.6

Zealand Region

Southern Denmark Region

Mid Jutland Region

4.5

0.3

1.1

4.0

0.5

0.9

Aarhus

4.9

0.5

1.4

4.4

0.6

1.5

Other

3.4

-0.1

0.0

3.0

0.5

-0.2

Northern Jutland Region

4.3

-0.7

0.6

4.3

-0.7

0.5

Aalborg

4.1

-0.7

0.5

4.1

-0.7

0.4

Other Northern Jutland

7.6

-0.8

3.5

9.4

-0.7

3.3

3.5

0.1

0.7

3.2

0.1

0.5

Total

Source: The Danish Property Federation.

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About the Market Statistics This web report is published in November 2017.

This report is based on data from

The portfolios have approximately 78,500 rentals corresponding to an annual lease value of DKK 18.5 billion and 15.4 million square meters. In comparison the statistical base in October 2016 had an annual lease value of DKK 15.4 billion and 13.3 million square meters. 4,900 properties* are included in the market statistics.

2 + 3 Ejendomme, Aberdeen Asset Management, Akelius, Alm. Brand, Andersen Partners Ejendomsadministration, AP Pension, Arkitekternes Pensionskasse, ATP, Bevica Fonden, Blue Vision, Carlsbergfondet, CBRE, CEJ Ejendomsadministration, Coller Capital, CS Pensionsfond, CW Obel Ejendomme, DADES, Danica, Dansk Sygeplejeråd, Danske Bank, DATEA, DEAS, DEAS Invest 1, DIP, DNP Ejendomme, DSB Ejendomme, Ejendomsselskaberne Grønløkkevej 10, Fast Ejendom Danmark, Fokus Asset Management, FrederiksbergFonden, Færchfonden, Grosserer Schiellerup og Hustrus Fonde, Gudbjørg og Ejnar Honorés Fond, HD Ejendomme, Højgaard Ejendomme, Industriens Pension, Jammerbugt Kommune, Jeudan, Jorcks Ejendomsselskab, JØP, Kalkværksgrundene, Kalvebod Ejendomme, Karberghus, KIRKBI, KLP Ejendomme, Kramers Legat, LB Forsikring, Lægernes Pensionskasse, Lærernes Pension, MP Pension, Niam, Nordea Ejendomme, Nordea Liv og Pension, North Property Asset Management, Patrizia Denmark, PBU, PenSam, PensionDanmark, Pensionskassen for Farmakonomer, PFA, Pitzner Ejendomme, PKA, Probus, ProDomus, Realdania, Sampension, SEB, SPG Omsorg DK1, Steen & Strøm, Taurus Ejendomsadministration, TDC Pensionskasse, Topdanmark, Tryg, Valad, Wagner Ejendomme og Aage Larsens Boligudlejning.

The base of the economic vacancy is the actual annual rent. The economic vacancy is defined as: Sum of actual rent in all vacant rentals divided by the sum of actual annual rent in both occupied and vacant rentals. 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 30 September 2017 and is called October 2017. Quarterly change is from October 2017 (closed 30 September 2017) compared to July 2017 (closed 30 June 2017). Annual change is from October 2017 (closed 30 September 2017) compared to October 2016 (closed 30 September 2016). Published data are updated and valid on the date of publication. As the Market Statistics are updated ongoing historic data might also be updated. We have chosen not to publish data, where the data is not sufficient to give valid and representative results or in combinations where only one or very few portfolios are represented.

*

The number of properties include properties and parent

properties. A property can include one or more buildings and one or more residentials or office units. A parent property includes a property, in which there is apartments, which are registered as independent properties. For these units it is the parent properties that are counted and not each apartment.

Further information If you wish to know more about this publication please contact Director in the Danish Property Federation

Morten Marott Larsen mml@ejendomsforeningen.dk Phone: +45 28 45 56 51

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The Danish Property Federation's Market Statistics - vacancy (October 2017)  

Economic vacancy remains at a low level Office vacancy has decreased five quarters in a row Retail increases 0.2 percentage points but is 7....

The Danish Property Federation's Market Statistics - vacancy (October 2017)  

Economic vacancy remains at a low level Office vacancy has decreased five quarters in a row Retail increases 0.2 percentage points but is 7....

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