THE DANISH PROPERTY FEDERATION MARKET STATISTICS – VACANCY COVERING THE PROFESSIONAL INVESTMENT PROPERTY MARKET IN DENMARK
July 2015
WEB REPORT
Economic vacancy rate of almost 10 percent In this first release by the Danish Property Federation’s Market Statistics the economic vacancy rate for investment properties in July 2015 is measured to an average of 9.8 percent for all types of properties. The overall vacancy rates are presented in table 1.
decrease by 1.7 percentage points. Thus, the retail vacancy level is lower than the level of office and industrial rentals. The economic vacancy rate for office rentals is of 11.8 percent, which is an increase of 0.5 percentage points during the last quarter; however, compared to last year, the economic vacancy rate for office rentals has decreased by 1.3 percentage points. The annual change indicates a positive development for economic vacancy rate for office rentals. However historically, an economic vacancy rate of 11.8 percent for this sector is relatively high for Denmark. The average economic vacancy rate level over the past 15 years is around 8 percent.
The level of economic vacancy rate is to be seen in connection with the fact that after the financial crisis economic activity has been lower, which means less demand for premises. Moreover, before the financial crisis decisions for new construction and development were made. The completion at a time of economic decline let to overbuilding, put pressure on rental rates and raised vacancy.
Industrial rentals has an economic vacancy rate of 14.6 percent and thus the highest vacancy within the four sectors. The vacancy rate for industry has increased the last quarter as well as the last year.
When looking at the forecasts for economic growth in the years to come, it is expected that the vacancy rates will decrease. Today, the economic vacancy rate is declining compared to last year when the economic vacancy rate was 0.5 percentage points higher although there has been a small increase in the economic vacancy rate of 0.1 percentage points the latest quarter.
The space vacancy rate is 11.3 percent It is the economic vacancy rate which is of the greatest importance for owners evaluating management performance and the Danish economy as a market key figure. However, the Danish Property Federation’s Market Statistics also measure statistics covering the vacancy rate for space to get a better understanding of the correlation between market value and area. In general, the space vacancy rate is typically higher than the economic vacancy rate.
Low residential economic vacancy rate The economic vacancy rates vary significantly across types of investment properties. The residential economic vacancy rate for of 2.6 percent is relatively low, especially considering a certain natural vacancy due to moving in or out and renovation. Compared to the latest quarter, the economic vacancy rate for residential rentals is unchanged.
The space vacancy rate is 11.3 percent. This is an increase of 0.3 percentage points compared to the last quarter and a decrease of 0.2 percentage points over the last year. The level of space vacancy is a little lower than the economic vacancy rate for residential and retail rentals while the opposite applies to office and industrial rentals.
Compared to residential rentals the economic vacancy rate regarding commercial rentals are relatively higher. The economic vacancy rate is of 8.3 percent implying a small quarterly increase by 0.2 percentage points and a yearly
Table 1. Vacancy rates July 2015 Economic vacancy rate
Office Retail
Space vacancy rate
Vacancy (percent)
Quarterly change (percentage points)
Annual change (percentage points)
Vacancy (percent)
Quarterly change (percentage points)
Annual change (percentage points)
11.8
0.5
-1.3
13.9
0.3
-1.1
8.3
-1.7
0.2
8.0
-0.7
-0.7
14.6
1.0
0.5
15.7
0.9
-2.3
Residential
2.6
0.0
-1.5
2.5
0.0
-1.0
Total
9.8
0.1
-0.5
11.3
0.3
-0.2
Industry
Source: The Danish Property Federation. The vacancy rate covering all sectors also include rent and space for other commercial sectors and secondary premises.
Published by the Danish Property Federation