Det danske ejendomsmarked - forår 2018

2018

DET DANSKE EJENDOMSMARKED THE DANISH PROPERTY MARKET

THE FULL SERVICE PROPERTY HOUSE IN NORTHERN EUROPE

FORORD Morten Jensen Executive Senior Director, Senior Partner Head of Valuation & Research E-MBA, State-Authorized Public Accountant

Den positive økonomiske udvikling kombineret med politisk stabilitet og et sundt realkreditsystem giver generelt et fortsat godt miljø for ejendomsinvesteringer i 2018. I 2017 så vi en rekordhøj transaktionsvolumen. Hos Newsec Advisory har vi oplevet en stor interesse for erhvervsejendomme, hvilket har resulteret i et øget antal transaktioner og en samlet dansk transaktionsvolumen for 2017 i omegnen af 80-90 mia. kr. Heraf udgør transaktionsvolumen i Storkøbenhavn i niveauet 59 mia. kr., svarende til cirka 70%.

Udviklingen er i høj grad fortsat drevet af interesse fra internationale investorer. Det anslås at internationale investorer i de seneste 12 måneder har stået for cirka 60% af transaktionsvolumen, hvilket er 10 procentpoint højere sammenlignet med 2016, hvor udenlandske investorer stod for cirka halvdelen af transaktionsvolumen i Danmark. Denne markedsudvikling afspejles i udviklingen hos Newsec Advisory, hvor vi igennem de sidste to år har forstærket vores alliancefælleskab med Stronghold i Sverige og BNP Paribas Real Estate på europæisk plan.

2 DET DANSKE EJENDOMSMARKED 2018

Markedet for boligudlejningsejendomme er fortsat det største segment, mens detailejendomme er det næststørste segment med flere store transaktioner indenfor shoppingcentre og butiksejendomsporteføljer. Tomgangen for stort set alle segmenter er faldet de sidste par år som et resultat af en øget efterspørgsel blandt brugere. Forrentningskravet er ligeledes faldet, og lejeniveauet er generelt steget.

Newsec Advisory forventer, at transaktionsvolumen for 2018 vil være på samme niveau som i 2017, da den danske økonomi er inde i en stabil højkonjunktur, og vi oplever fortsat stor interesse fra danske såvel som udenlandske investorer. Det fortsatte lave renteniveau giver et godt grundlag for ejendomsinvesteringer. Der er dog mange markedsaktører, der forventer rentestigninger inden for de kommende år, hvilket kan få indvirkning på ejendomsinvesteringsaktiviteten. Dette tema sætter vi fokus på i Det Danske Ejendomsmarked Forår 2018.

PREFACE

The positive economic development combined with political stability and a solid mortgage credit system generally provide a good environment for real estate investment in 2018. In 2017 we saw a record high transaction volume. At Newsec, we have experienced a great interest in commercial properties, causing an increase in transactions and a total Danish transaction volume for 2017 around DKK 80-90 billion.

Copenhagen amounts to DKK 59 billion, corresponding to approximately 70% of the total volume.

The increase is to a large extent driven by interest from international investors. It is estimated that international investors in the past 12 months accounted for about 60% of the total volume, which is 10 percentage points higher compared to 2016, where foreign investors accounted for 50% of the transaction volume in Denmark. These numbers support the strategy at Newsec Advisory, where we have created a strong alliance in the last two years with Stronghold in Sweden and BNP Paribas Real Estate in Europe.

The market for residential properties remains the largest segment, whereas retail properties is the second largest segment with several major transactions within shopping centers and retail property portfolios. Vacancy rates across almost every segment have fallen over the last few years, caused by an increase in demand for properties by users. Yield requirements have also decreased, and the rent levels are generally increasing.

Newsec expects the transaction volume for 2018 to be at the same level as in 2017, as the Danish economy is in a stable upswing and we continue to experience great interest from Danish as well as foreign investors. The continued low interest rate levels provide a good foundation for real estate investment. However, the market anticipates interest rate levels to increase within the coming years that can have a major impact on property investment activity. We will be focusing on these aspects in the Danish Property Market Spring 2018.

3  THE DANISH PROPERTY MARKET 2018

Foruden temaartiklen kan du i denne udgave læse om: • Dansk økonomi, s. 6 • Ejendomsfinansiering, s. 14 • Markederne for: - Capital Markets, s. 17 - Kontorejendomme, s. 20 - Industrimarkedet, s. 26 - Detailmarkedet, s. 32 - Boligmarkedet, s. 38 - De nordiske markeder, s. 42 - International Appendix, s. 51 • Temaartikel, s. 56 Renters indflydelse på ejendomsafkast

In addition to our featured article, this report offers insights on: • Danish economy, p. 6 • Property financing, p. 14 • The markets for: - Capital Markets, p. 14 - Office properties, p. 20 - Logistic, p. 26 - The Retail market, p. 32 - The residential market, p. 38 - The Nordic markets, p. 42 - International Appendix, s. 51 • Featured article, p. 56 Interest rates influence on property yields

DANSK ØKONOMI 1.1 DANSK ØKONOMI I STÆRK FREMGANG Danmark er inde i en stabil økonomisk periode med øget vækst, flere nye arbejdspladser og tillid til forhøjet forbrug og investeringsaktivitet. I første halvår af 2017 voksede Danmarks BNP relativt meget, og efter en lille tilbagegang på -0,3% i tredje kvartal viser de nyeste tal fra Danmarks statistik en vækst på 0,9% i fjerde kvartal, så alt tyder på en real BNP-vækst på 2,0% i 2017. Det er andet år i træk, at BNP vokser med 2% og vismandsrapporter peger på en årlig vækst i dette niveau helt frem mod 2025 på betingelse af, at finanspolitikken holdes stram, og arbejdsudbuddet øges.

Danmark er yderst afhængig af den politiske og økonomiske udvikling i landene omkring

os. Mange tal peger på, at den positive økonomiske udvikling også er gældende for mange af Danmarks handelspartnere, men den internationale valutafond, IMF, advarer mod en forestående recession, hvis ikke der bliver gennemført nødvendige reformer primært for at øge arbejdsudbuddet, mens der er gang i hjulene. Den økonomiske vækst kan endvidere få den Europæiske Centralbank til at hæve renterne i 2018, hvilket vil få konsekvenser for det danske renteniveau.

1.2 FORBRUGERTILLID De danske forbrugere er således også bevidste om den positive økonomiske udvikling.

Tilliden blandt forbrugerne havde samme udvikling som væksten i BNP. Vi så en stigende forbrugertillid i første halvår af 2017 for så derefter at falde en smule i tredje kvartal. Fra

november 2017 til februar 2018 er niveauet steget til 8,5, hvilket er højere end de seneste seks måneders gennemsnit på 7,5.

Forbrugerne forventer generelt en forbedret økonomisk situation om 12 måneder end på nuværende tidspunkt samt faldende arbejdsløshed. Ifølge husholdningerne, har de ikke planlagt at anskaffe sig større forbrugsgoder i øjeblikket, da der i højere grad spares op.

Privatforbruget har dog været konstant stigende siden 2012, og senest tal for tredje kvartal 2017 viser et privatforbrug på 251 milliarder kr. – en stigning på 2,6% i forhold til samme kvartal året før. Det er positivt, at privatforbruget stiger samtidig med, at danskernes forbrugstillid vokser.

THE DANISH ECONOMY 1.1 THE DANISH ECONOMY IS BOOMING Denmark finds itself in an economically stable period with increasing growth, more new workplaces as well as trust in increased spending and investments. During the first half of 2017 the Danish GDP grew considerably and, following a slight decline of -0.3% in the third quarter, the newest numbers from Danmarks Statistik (Statistics Denmark) show a growth of 0.9% in the fourth quarter, so that everything points towards a real growth in GDP of 2.0% in 2017.It is the second year in a row with a GDP growth of 2% and the Wise Men´s report predicts an annual growth rate of this size all the way to 2025, providing that the finance politics are kept tight and the amount of jobs increases.

Denmark, obviously, depends very much on the political and financial developments in 6 DET DANSKE EJENDOMSMARKED 2018

the countries around us. Many numbers point towards the positive financial development affecting many of Denmark´s most important trade partners. However, the international monetary fund, IMF, state that they see warning signs of a potential recession, if necessary reforms are not implemented, primarily to increase the workforce, while the economy is booming. The financial growth might also make the ECB raise interest rates in 2018, which will have consequences for the level of interest rates in Denmark.

1.2 CONSUMERS TRUST Thus, Danish consumers are also aware of the positive financial developments. The trust among consumers followed the same development as the growth in GDP. We saw a rise in consumers trust in the first half of 2017, fol-

lowed by a slight decline in the third quarter.

From November 2017 to February 2018 the level has risen to 8.5, which is higher than the previous six months average of 7.5.

In general, consumers expect the financial situation to have improved 12 months from now compared to the present situation, as well as a lower unemployment rate. According to statements made by the individual households, the consumers in general are not planning to purchase large consumer goods at the moment, because they are focused on savings.

Private consumption has, however, been on the rise constantly since 2012 and the latest numbers, for the third quarter of 2017, show a total private consumption of DKK 251 billion – a growth of 2.6% compared to the same

TABEL 1.1: NATIONALREGNSKABETS HOVEDPOSTER TABLE 1.1: NATIONAL ACCOUNTS PRINCIPAL ITEMS Realvækst i% Real growth in%

2012

2013

2014

2015

2016

2017

2018*

2019*

2020*

Bruttonationalprodukt, BNP Gross Domestic Product, GDP

0,2

0,9

1,6

1,6

2,0

2,0

1,9

1,8

1,7

Import af varer og tjenester Imports of goods and services

2,8

1,4

3,9

1,9

3,8

4,1

2,5

3,8

3,9

Eksport af varer og tjenester Exports of goods and services

1,3

1,6

3,1

2,4

2,9

4,6

2,1

2,7

2,9

Privat forbrugsudgift Household consumtion

0,4

0,4

1,0

1,7

2,3

1,5

2,2

2,3

2,2

Offentlig forbrugsudgift Public consumption

0,8

-0,1

1,9

1,1

0,3

1,1

1,0

0,8

0,8

Faste bruttoinvesteringer mv.

Gross fixed asset formation, etc.

3,7

2,7

3,1

3,1

6,0

2,1

4,1

3,5

3,4

*Forventninger, Estimate Kilde: Nationalbanken / Source: Danmarks Nationalbank

FIGUR 2.1: REAL VÆKST I BNP I PROCENT FIGURE 2.1: REAL GDP GROWTH IN PER CENT

FIGUR 2.1: REAL VÆKST I BNP I PROCENT FIGURE 2.1: REAL GDP GROWTH IN PER CENT % 3

2

1

0

-1

-2

-3

Q1

Q2

Q3

Q4

Q1

2012

Q2

Q3

Q4

Q1

2013

Q2

Q3

Q4

Q1

2014

Q2

Q3

Q4

Q1

2015

Q2

Q3

Q4

Q1

2016

Q2

Q3

Q4

2017

Kilde / Source: Danmarks Statistik

Kilde: Danmarks statistik / Source: Danmarks statistik

FIGUR 2.2: PRIVATFORBRUGET FIGURE 2.2: PRIVATE CONSUMPTION

FIGUR 2.2: PRIVATFORBRUG FIGURE 2.2: PRIVATE CONSUMPTION MIA DKK / BN DKK 300 290 280 270 260 250 240 230 220 210 200

Q1

Q2

Q3

2012

Q4

Q1

Q2

Q3

2013

Q4

Q1

Q2

Q3

2014

Q4

Q1

Q2

Q3

2015

Q4

Q1

Q2

Q3

2016

Q4

Q1

Q2

Q3

Q4

2017

Kilde / Source: Danmarks Statistik

7 THE DANISH PROPERTY MARKET 2018

FIGUR 2.3: OFFENTLIG GÆLD FIGUR 2.3: OFFENTLIG GÆLD FIGURE 2.3: PUBLIC DEBT FIGURE: 2.3: PUBLIC DEBT

Mia./Billion DKK 1.000 950 900 850 800 750 700 650 600 550 500

Q1

Q2

Q3

Q4

Q1

Q2

2012

Q3

Q4

Q1

Q2

2013

Q3

Q4

Q1

Q2

2014

Q3

Q4

Q1

Q2

2015

Q3

Q4

Q1

Q2

2016

Q3

Q4

2017

Kilde: Danmarks statistik / Source: Danmarks statistik Kilde / Source: Danmarks Statistik

FIGUR 2.4: FASTE BRUTTOINVESTERINGER FIGURE 2.4:BRUTTOINVESTERINGER GROSS FIXED ASSET FORMATION FIGUR 2.4: FASTE FIGURE: 2.4: GROSS FIXED ASSET INVESTMENTS Mia./Billion DKK 120

110

100

90

80

70

60

Q1

Q2

Q3

Q4

Q1

Q2

2012

Q3

Q4

Q1

Q2

2013

Q3

Q4

Q1

Q2

2014

Q3

Q4

Q1

Q2

2015

Q3

Q4

Q1

Q2

2016

Q3

Q4

2017

Kilde: Danmarks statistik / Source: Danmarks statistik Kilde / Source: Danmarks Statistik

FIGUR 2.5: BETALINGSBALANCENS LØBENDE POSTER FIGURE CURRENT ACCOUNT FIGUR 2.5: 2.5: BETALINGSBALANCENS LØBENDE POSTERBALANCE FIGURE: 2.5: CURRENT ACCOUNT BALANCE Mio./Million DKK 60.000

50.000

40.000

30.000

20.000

10.000

0

Q1

Q2

Q3

Q4

Q1

2012

Q2

Q3

Q4

Q1

2013

Q2

Q3

Q4

Q1

Q2

2014

Q3

Q4

Q1

2015

Q2

Q3

Q4

Q1

2016

Q2

Q3

Q4

2017

Kilde / Source: Danmarks Statistik Kilde: Danmarks statistik / Source: Danmarks statistik

FIGUR 2.6: ERHVERVSBYGGERI FIGUR 2.6: ERHVERVSBYGGERI FIGURE 2.6: COMMERCIAL CONSTRUCTIONS FIGURE: 2.6: COMMERCIAL CONSTRUCTION

KVM / SQ M 350.000 300.000 250.000 200.000 150.000 100.000 50.000 0

Q1

Q2

Q3

Q4

Q1

2012 Kilde / Source: Danmarks Statistik

Q2

Q3

Q4

Q1

2013

Q2

Q3

Q4

Q1

2014

Påbegyndt byggeri

Påbegyndt byggeri / Startet construction

Q4

Q1

Q2

Q3

2016

Q4

Q1

Q2

Q3

2017

Tilladt byggeri

Fuldført byggeri / Completed construction

Tilladt byggeri / Approved construction

Kilde: Danmarks statistik / Source: Danmarks statistik

8

Q3

2015

Kilde / Source: Danmarks Statistik

DET DANSKE EJENDOMSMARKED 2018

Q2

Fuldført byggeri

Q4

1.3 OFFENTLIG GÆLD Danmarks offentlige bruttogæld (ØMU-gælden) var senest opgjort til 784 milliarder i tredje kvartal 2017, hvilket er en stigning på 2,1 milliarder i 2017. Den offentlige gæld udgør således 36,5% af det samlede BNP, hvilket er langt lavere end EU’s grænse på 60%. Således var Danmark blandt kun 12 lande i EU, der opfylder den fastsatte grænse og landet med den sjette laveste gældsrate i EU. Det er også en af de primære årsager til, at Danmark har den højest mulige kreditvurdering (AAA/Aaa) hos de internationale kreditvurderinger, hvilket vidner om en robust gældsstruktur og et attraktivt investeringsmarked for investorer med lav risikoappetit.

Danmark har stadig et signifikant nettooverskud på betalingsbalancen, hvilket har været tilfældet siden 1990’erne. Dansk eksport af varer og tjenester går godt, og det er er især over for USA, at Danmark har et højt overskud. Danmark har dog et underskud over for EU, hvilket til dels skyldes store bidrag til EU. Det er dog blevet sværere at konkludere noget for dansk økonomi på baggrund af betalingsbalancen på grund af globaliseringen, fastslår en ny analyse fra Nationalbanken. Eksempelvis er nogle danske produkter, der eksporteres til USA, faktisk produceret i USA eller andre lande, men det juridiske ejerskab er i Danmark, og derfor bliver det registreret som dansk eksport.

1.4 FASTE BRUTTOINVESTERINGER OG BETALINGSBALANCEN

1.5 RENTE OG INFLATION Nationalbanken fastholder det lave renteniveau for udlånsrenten, hvilket ligger i tråd med Den Europæiske Centralbanks (ECB) pengepolitik. ECB’s opkøbsprogram blev dog halveret i november 2017, og i USA har vi allerede set små rentestigninger i 2017, hvilket forventes at fortsætte i 2018. ECB har længe hævdet, at de ikke hæver renten, før deres opkøbsprogram er slut, hvilket vil tage endnu seks til ni måneder.

De faste bruttoinvesteringer omfatter udgifter til opførelse af nye bygninger og anlæg samt købt af transportmidler, maskiner, software og inventar. Faste bruttoinvesteringer steg med 3,2 milliarder fra tredje kvartal 2016 til tredje kvartal 2017 og har de sidste to år ligget på et niveau over 100 milliarder kr., hvilket er i samme niveau som i 2007. Det er primært udgifter til bygninger og anlæg samt software, som trækker investeringerne op.

Det er et sundhedstegn for dansk økonomi, når virksomhederne øger deres investeringer, da det vidner om en god tro på fremtiden.

quarter of the previous year. It is positive that the private consumption is on the rise and that the consumers trust among the Danes is growing at the same time.

1.3 PUBLIC DEBT Denmark´s public gross debt (the so called ØMU-debt) was at DKK 784 billion in the third quarter of 2017, which is equivalent to a rise of DKK 2.1 billion in 2017.The public debt makes up 36.5% of the total GDP, which is far below the EU limit of 60%. Thus, Denmark was among just 12 countries in the EU which complied with the EU limit and also the country with the sixth lowest debt rate in the EU. That is one of the most important reasons why Denmark has the highest possible credit evaluation (AAA/Aaa) at the international institutions for credit evaluation. This signifies a robust structure for debt and an attractive investment market for investors with a low appetite for risk taking.

1.4 REGULAR GROSS INVESTMENTS AND THE BALANCE OF PAYMENTS The regular gross investments comprise expenses for the construction of new buildings, plants, and installations, as well as the purchasing of means of transport, machines, software, and fixtures. Regular gross invest-

Det vurderes, at det langt fra er usandsynligt, at de lange renter vil stige i løbet af 2018.

Hvor meget og i hvilket niveau er svært at spå

ments went up by DKK 3.2 billion from the third quarter of 2016 to the third quarter of 2017 and the level for these investments has been at above DKK 100 billion for the last two years, which is the same level as in 2007. Primarily, expenses for buildings, plants, and installations account for a rise in the total cost of these investments. Typically, it is a sign of a healthy economy, when businesses spend more on investments, as it is the case with the present Danish economy, because this is seen as a sign of positive expectations for the future.

Denmark still has a significant net profit on the balance of payments. This has been the case since the 1990´s.Danish export of goods and services is going well. It is in particular with regards to export to the US that Denmark has a high profit. However, Denmark experiences a deficit with regards to the EU, which to some extent is due to large contributions to the EU. It has become increasingly difficult to conclude something specific regarding the Danish economy based on the balance of payments because of the globalization. This has been noted in a recent analysis from the Danish national bank. For example, some Danish products, that are exported to the US, are actually manufactured in the

om, men alt afhænger af stabiliteten i både dansk og international økonomi samt udviklingen i inflation, hvilket for mange centralbanker har været et vigtigt mål at få op i niveauet 2%.

Inflationen faldt kraftigt i perioden 20122016, men steg i 2017 med 1.1%, hvilket er det højeste i fem år. Gennemsnitlige prisstigninger på lige over 1% er stadig så lavt, at lønninger er steget mere end priserne, hvilket betyder at danskerne har fået en fin fremgang i reallønnen.

Nogle undrer sig over, hvorfor højere inflation er et mål, da man i årtier har prøvet at bekæmpe hyperinflation i mange lande ved at sætte et mål på 2% årligt. Høj inflation uden lønstigninger resulterer i, at befolkningen mister deres købekraft. En stabil og lidt højere inflation end det niveau, vi har oplevet de sidste to-tre år, giver incitament til at foretage investeringer tidligere, da investorerne vil have en forventning om, at at værdien af investeringen er stigende og mere værd i morgen end i dag.

Estimaterne for de næste par år er stigende inflation, som er begrundet i den generelt positive økonomiske udvikling. Økonomer og eksperter har dog før taget fejl i deres forudsigelser vedrørende inflationen. Så sent som

US or other countries. But the legal ownership is in Denmark, and so it is registered as Danish export.

1.5 INTEREST RATES AND INFLATION The Danish national bank maintains the low level of rates for the interest on loans, which is in line with the monetary politics of the European Central Bank (ECB).However, the ECB’s purchase program was cut in half in November 2017 and in the US we have already seen minor increases in interest rates in 2017, and this is expected to continue in 2018. For a long time, the ECB has stated that they will not raise interest rate levels before their purchase program is completed. This will take another six to nine months.

It is estimated that it is not at all unlikely that the interest rates for long term loans are going to go up in 2018.It is difficult to predict how much and to what level, but it all depends on the stability in the Danish and the international economy as well as the development with regards to inflation. For many central banks it has been an objective to get the inflation to a level of around 2%.

The inflation dropped significantly between 2012 and 2016 but in 2017 it went up by 1.1%, 9 THE DANISH PROPERTY MARKET 2018

i 2016 spåede mange inflationen til at blive 1,0-1,5%, men måtte konstatere at inflationen endte på 0,3%.

1.6 LEDIGHED OG BESKÆFTIGELSE Arbejdsmarkedet er i klar fremgang. Antallet af beskæftigede er steget med over 140.000 personer de sidste fire år. I december var der således 2.000 flere lønmodtagere i job end måneden før, hvilket kun er 1.100 under det højeste niveau siden marts 2008.

Den faldende arbejdsløshed kan også læses på fuldtidsledigheden opgjort af Danmarks Statistik. Bruttoledigheden er faldet næsten to procentpoint i perioden 2013-2017 og er senest opgjort til 4,1% for fjerde kvartal 2017.

Kurven er dog fladet en smule ud i 2017, hvilket kan undre mange, eftersom beskæftigelsen steg i samme periode. Forklaringen skal ifølge Dansk Erhverv findes ved en gruppe af ledige, der ikke ønsker at være i job, men udelukkende vil have dagpenge eller kontanthjælp, og at det derfor er deltidsansatte eller udlændinge, der får job.

Fald i arbejdsløshed er naturligvis positivt og et sundhedstegn på, at virksomhederne tjener penge og har brug for flere kræfter. Der er dog meldinger om brancher hvor de oplever vanskeligheder med at anskaffe den fornødne arbejdskraft. Det er primært inden for

which is the highest in five years. Prices going up by, on average, slightly more than 1% is still low enough for the salaries to have risen more than the prices, so that, all in all, the real wages for the Danes have progressed nicely.

Some may wonder why a higher level of inflation is an objective, since many countries have tried to fight hyper-inflation by setting a goal of max. 2% per year. High inflation without higher wages weakens the purchasing power within the population. A stable and slightly higher inflation compared to the level we have seen over the last two to three years causes investments to be made earlier, because investors will expect the investment value to increase and therefore have more value tomorrow, compared to today.

The estimates for the next few years predict a rising inflation, due to the positive financial developments in general. However, economists and other experts have on some occasions been wrong in terms of their predictions regarding inflation. As recently as in 2016, many experts predicted the inflation to reach 1.0-1.5%, but, as it turns out, the inflation got to 0.3%.

10 DET DANSKE EJENDOMSMARKED 2018

det konjunkturfølsomme erhverv bygge og anlægsindustrien, at ledige er kommet i beskæftigelse, og hvor der er mangel på kvalificerede ansatte, men mange andre brancher melder også om de samme udfordringer.

Flere eksperter peger på, at det manglende arbejdskraftudbud og mobiliseringen deraf kan forbedres gennem politisk handling ved hjælp af bedre adgang til udenlandsk arbejdskraft, skattereformer, højere pensionsalder og initiativer til at få ledige hurtigere i arbejde.

1.7 INTERNATIONALE FORHOLD Der er et tiltagende opsving i verdensøkonomien, hvor væksten estimeres til at blive højere end det historiske gennemsnit. Det er således på tværs af lande og sektorer, der er drevet af de samme forhold som i Danmark, nemlig lave renter, høje aktivpriser og positive tillidsindikatorer.

Trods meget uro omkring Præsident Trump, har der generelt været bedring i amerikansk økonomi i løbet af 2017. En skattereform blev gennemført i 2017, og på trods af en midlertidig statslukning i januar blev budgetaftalen stemt igennem i februar. USA er, som nævnt i afsnit 1.4, Danmarks største eksportmarked, og derfor er handelen mellem USA og Europa vigtig. Den ambitiøse TTIP-aftale, der skulle

1.6 UNEMPLOYMENT AND EMPLOYMENT The labour market is booming. The number of employees has risen with over 140 000 persons over the last four years. Thus, in December there were 2000 more wage earners with employment compared to the previous month. That is just 1100 less than the highest level since March of 2008.

The drop in unemployment can also be read out of the full-time unemployment statistics published by Danmarks Statistik (Statistics Denmark). The gross unemployment has dropped by almost two percentage points in the period 2013-2017 and the most recent count is at 4.1% for the fourth quarter of 2017. However, the development has stagnated a little in 2017, which for many seems strange, since employment went up in the same period. According to Dansk Erhverv (The Danish Chamber of Commerce), this can be explained by looking at the group of unemployed, who do not actually want a job but just want to receive unemployment benefits or cash assistance. The jobs that, in theory, may have been given to those people, are given to part time employees and foreigners instead.

sikre frihandel mellem EU og USA, er endnu ikke kommet videre, og Præsident Trumps varsel om fald på medicinpriser samt told på blandt andet solceller kan få stor betydning for nogle danske virksomheder. Eksporten til USA har dog endnu ikke vist de store svækkelser.

Jobmarkedet i USA er i kraftig vækst og beskæftigelsen steg med 200.000 personer i januar 2018. Læg hertil at både lønninger og inflation er opadgående. Derudover overraskede forbrugertilliden positivt i årets første måned, hvilket er vigtigt for den amerikanske økonomi, da det giver en retningspil for det fremtidige privatforbrug. Alle disse mekanismer kan medvirke til at trække dansk eksport til USA i vejret i løbet af 2018. Til gengæld er dollaren faldet voldsomt i løbet af de sidste 12 måneder, hvilket kan sætte en dæmper på dansk eksport.

I 2017 så vi flere rentestigninger fra den amerikanske centralbank, Federal Reserve. Kombinationen af en svækket dollar og udsigten til at inflationsmålsætningen i USA ser ud til at kunne opnås i løbet af 2018, har fået Federal Reserve (FED) til at hæve renteniveauet.

Eurozonen har siden efteråret 2017 oplevet en større grad af stabilitet på grund af en bekræftet tilknytning fra både Tyskland og

Naturally, the drop in unemployment is positive and a sign of a healthy development where the companies have higher earnings and need more employees. However, some business areas report problems with getting the necessary number of employees. It is primarily within building and construction, an area which is very sensitive to cyclical fluctuations, that many unemployed have found work and where there is a lack of qualified employees, but similar problems are being reported in other business areas as well.

Experts suggest solutions to these recruitment problems in the shape of political initiatives which could provide better access to foreign employees. They also suggest tax reforms, a higher age before employees can retire, and initiatives which can make unemployed persons find a job sooner.

1.7 INTERNATIONAL RELATIONS The world economy is recovering fast and the growth is estimated to be higher than the historical average. This is the case throughout countries and sectors that are driven by the same conditions as Denmark, such as low interest rates, high asset prices

and indications for trust in positive developments in the near future.

Despite a lot of unrest surrounding president Trump, there has been a recovery within the American economy during 2017.A tax reform was carried through in 2017 and in spite of a temporary government shutdown in January, the state budget deal was accepted in February. As mentioned in section 1.4, the US is the largest export market for Denmark and therefore the trade activities between the US and Europe are important. The ambitious TTIP-agreement, which was supposed to ensure free trade between the EU and the US has not yet moved on. Also, president Trumps notice regarding the lowering of prices for medication as well as customs duties on for instance solar cells can be of great importance to some Danish businesses. However, so far, the export to the US has not been seen to show any major signs of weakness.

FIGUR 2.7: RENTEUDVIKLING FIGUR 2.7: RENTEUDVIKLING FIGURE 2.7: INTEREST RATE FIGURE 2.7: INTEREST RATE DEVELOPMENT

DEVELOPMENT

% 0,5

0,4

0,3

0,2

0,1

0

2012

2013

2014

2015

2016

2017

2018

Kilde: Danmarks Nationalbank / Source: Danmarks Nationalbank Kilde/Source: Danmarks Nationalbanken

FIGUR 2.8: FORBRUGERINFLATION FIGURE 2.8: CONSUMER PRICE INFLATION

FIGUR 2.8: FORBRUGERINDEKS INFLATION FIGURE 2.8: CONSUMER PRICE INFLATION % 7

The labour market in the US is in strong progress, and employment went up by 200 000 persons in January of 2018. Additionally, wages are going up and so is the inflation rate. Also, consumers trust follows a surprisingly positive development in the first month of the year, and this is important for the American economy because it indicates a direction for the future development of private consumption. These mechanisms can help the Danish export to the US grow during 2018.On the other hand, the dollar has experienced a significant fall during the most recent 12 months, which might attenuate the Danish export activities.

6 5 4 3 2 1 0

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017 2018E 2019E

Kilde: Danmarks Statistik Nationalbanken / Source: Danmarks Statistik Nationalbanken

Kilde / Source: Danmarks Statistik

FIGUR 2.9: BESKÆFTIGELSE, 15-64 ÅRIGE, 1.000 PERSONER FIGURE 2.9: EMPLOYMENT, AGE 15-64, 1,000 PERSONS

FIGUR 2.9: BESKÆFTIGELSE, 15-64 årige, 1.000 PERSONER FIGURE 2.9: EMPLOYMENT, age 15-64, 1,000 PERSONS Personer i 1.000

In 2017, we saw the Federal Reserve raise interest rates several times. The combination of a weakened dollar and the predicted chance of reaching the objectives in terms of inflation in the US in 2018, has made the Federal Reserve (FED) raise the level for interest rates.

2.850

2.800

2.750

2.700

2.650

2.600

2.550

The Eurozone has experienced a larger degree of stability in the fall of 2017 because of a renewed and confirmed commitment from Germany as well as France. However, the latest presidential election in Italy in March shows that outer wing parties are becoming increasingly popular, which can create some political instabilities in the EU. Additionally, there is the continued discussion about immigration and refugees. This is still very much a part of the public political debate in many countries and it can potentially lead to discord and disagreements with regards to the question of reallocation between countries in the east and those in the west.

Q1

Q2

Q3

Q4

Q1

2012

Q2

Q3

2013

Q4

Q1

Q2

Q3

Q4

Q1

2014

Q2

Q3

2015

Q4

Q1

Q2

Q3

2016

Q4

Q1

Q2

Q3

Q4

2017

Kilde / Source: Danmarks Statistik

Kilde: Danmarks Statistik / Source: Danmarks Statistik

FIGUR 2.10 FULDTIDS BRUTTOLEDIGE FIGURE 2.10 UNEMPLOYMENT

FIGUR 2.10 FULDTIDS BRUTTOLEDIGE FIGURE 2.10 UNEMPLOYMENT % 10 9 8 7 6 5 4 3 2

The economy in the EU has seen some improvement, but the inflation is lower compared to the inflation in Denmark and the ECB has stated that interest rates are not going to go up before the purchase program is

1 0

Kilde / Source: Danmarks Statistik

Kilde: Danmarks Statistik / Source: Danmarks Statistik

11 THE DANISH PROPERTY MARKET 2017

Frankrig. Det seneste præsidentvalg i Italien i marts, viste dog at der i høj grad er ydrefløjspatier der vinder større tilslutning, hvilken kan skabe nogle politiske usikkerheder i EU. Læg dertil den fortsættende immigrationsog flygtningediskussion, som stadig er på dagsordenen i mange lande og potentielt kan skabe splid ved spørgsmålet om omfordeling mellem øst- og vestlandene. Økonomien i EU er generelt forbedret, men inflationen er dog lavere end i Danmark, og ECB har senest meldt ud, at renten tidligst bliver sat op, når opkøbsprogrammet er slut, da den europæiske centralbankdirektør, Mario Dragi mener, at forbedringen i den europæiske økonomi er et resultat af den lempelige pengepolitik. Der er dog udsigter til, at rentestigninger kan forekomme inden for de næste 12 måneder, eftersom ECB valgte at halvere deres opkøbsprogram i november 2017. Opkøbsprogrammet slutter i september 2018, og meldingen fra ECB er, at der går et par måneder efter september før renten stiger igen.

Markedsrenten for korte og lange renter i EU kan dog godt ændre sig før ECB sætter udlånsrenten i vejret.

completed, because the director of the ECB, Mario Draghi, thinks that the improvement in the European economy is a result of the accommodative monetary politics. However, it looks like the interest rates could go up within the next 12 months, seeing as the ECB elected to cut the purchase program in half in November of 2017. The purchase program is due to end in September 2018 and the latest statement from the ECB is that it is going to take a couple of months after September before the interest rates will go up again. The market rate for short and long- term interests in the EU can change, however, before the ECB decides to make the lending rate go up.

The Brexit-negotiations will have to find some sort of shape within the next 12 months, since the deadline for the British exit from the EU is at the beginning of 2019. There is still a lot of scepticism from both sides with regards to how the negotiations are going to proceed.

The insecurity regarding the influence of the Brexit on the financial markets and the prop-

12 DET DANSKE EJENDOMSMARKED 2018

Brexitforhandlingerne er nødsaget til at tage form inden for de næste 12 måneder, da deadline for Storbritanniens udtrædelse af EU er i starten af 2019. Der er fortsat meget skepsis fra begge sider i forhold til, hvorledes forhandlingerne vil forløbe. Usikkerheden vedrørende Brexits indflydelse på de finansielle markeder og ejendomsmarkedet i Storbritannien og eurozonen medvirker til en større interesse blandt udenlandske investorerne for alternative investeringer i Norden, herunder Danmark.

Ruslands militærøvelser tæt ved grænsen til de baltiske lande, cybersikkerhedsspørgsmål samt Nordkoreas atomprogram og provokationer mod USA og nabolandene Sydkorea og Japan udgør en sikkerhedspolitisk trussel.

Dog har disse geopolitiske spændinger endnu ikke har haft den store påvirkning på de finansielle markeder. Andre risici er pludselige rentestigninger, korrektionen i prisfastsættelsen af finansielle aktiver og protektionisme.

stærk tro på rentestigninger i markedet i øjeblikket, hvilket påvirker prisfastsættelsen på de globale aktier. Der er kommet en negativ korrektion på aktiemarkedet i løbet af februar, hvilket skyldes kombinationen af en foregående periode med høje prisfastsætter, rentestigninger i USA samt en svækket dollarkurs.

Olieprisen faldt voldsomt i perioden 2014 til starten af 2016 og nåede sit laveste niveau på knap 31 dollars pr. tønde i januar 2016. Prisen er siden steget ganske markant, og det nuværende niveau ligger på over 60 dollars pr. tønde. Der er en bred forventning om, at olieprisen vil fortsætte med at stige i første halvår af 2018, dog i et meget lavere tempo, for så til gengæld at falde i sidste halvdel af 2018. Stigende oliepriser er positivt for den danske nationaløkonomi og statens indtægter fra Nordsøen. Omvendt gavner faldende oliepriser alle andre end dem, der tjener penge på olien.

De positive økonomiske forhold har længe haft en afsmittende effekt på de amerikanske og europæiske aktiemarkeder. Der hersker en

erty market in Great Britain and the Eurozone contributes to a renewed interest from foreign investors in the Nordic countries, including Denmark.

Russian military exercises near the border towards the Baltic countries, questions regarding cyber security as well as North Korea nuclear program and provocations towards the US and neighbouring South Korea and Japan are all potential threats to European security.

However, these geopolitical tensions have not yet had any significant impact on the financial markets. Other risks include sudden rises in the interest rates, corrections in the pricing of financial assets and protectionism.

For a long time, the positive financial relations have had a spillover effect on the American and European stock markets.

There is a great faith in interest rates going up at the moment, which affect pricing on global equities. In February we have seen a negative correction on the stock market,

which is caused by a combination of a period with high pricing, increased interest rates in the US and a weakened dollar.

The oil prices dropped significantly from 2014 to 2016 and reached a low point of just short of 31 dollars a barrel in January of 2016. The prices have since then gone up considerably, and the present level is at over 60 dollars a barrel. In general, it is expected that the oil prices are going to continue to go up in the first half of 2018, at a much slower pace, though, followed by a fall over the second half of the year. Oil prices going up is positive for the Danish national finances and the states income from the North Sea. On the other hand, oil prices going down is beneficial for those without income from oil resources.

FIGUR 2.11: GÆLDSKORT. GÆLD AF BNP FIGURE 2.11: MAP OF DEBT. DEBT OF GDP

>100%

60-100%

<60%

Kilde: Eurostat / Source: Eurostat

FIGUR 2.12: OLIEPRISENS UDVIKLING

FIGUR 2.12: UDVIKLING I OLIEPRIS FIGURE2.12 2.12: OIL PRICE IN DEVELOPMENT FIGURE DEVELOPMENT OILPRICE USD per tønde / USD per barrel

100

80

60

40

20

2012

2013

2014

Kilde/Source: U.S. Energy Information Administration Administration Kilde: U.S. Energy Information

2015

2016

2017

M03

M01

M11

M09

M07

M05

M03

M01

M11

M09

M07

M05

M03

M01

M11

M09

M07

M05

M03

M01

M11

M09

M07

M05

M03

M01

M11

M09

M07

M05

M03

M01

M11

M09

M07

M05

M03

M01

0

2018

/ Source: U.S. Energy Information Administration

FIGUR 2.13: IORR RATE - AMERIKANSKE CENTRALBANKRENTE

FIGUR 2.12: IORR RATE - AMERIKANSKE CENTRALBANKRENTE FIGURE 2.13 IORR RATE - FEDERAL RESERVE INTEREST RATE FIGURE 2.12 IORR RATE - FEDERAL RESERVE INTEREST RATE % 2 1,8 1,6 1,4 1,2 1 0,8 0,6 0,4 0,2

2012

2013

2014

2015

2016

2017

M03

M01

M11

M09

M07

M05

M03

M01

M11

M09

M07

M05

M03

M01

M11

M09

M07

M05

M03

M01

M11

M09

M07

M05

M03

M01

M11

M09

M07

M05

M03

M01

M11

M09

M07

M05

M03

M01

0

2018

Kilde/Source: Federalreserve.gov Kilde/Source: Federalreserve.gov

13

EJENDOMSFINANSIERING DET DANSKE REALKREDITSYSTEM ER ROBUST Danmark har et sundt og stabilt realkreditsystem, hvor der er lovkrav til minimumsgrænsen for egenfinansiering. Kravet om egenkapital giver lånemarkederne en større grad af robusthed i tilfældet af konjunkturnedgang eller ”Financial Distress”. De mest almindelige låntyper er realkreditlån udstedt af realkreditinstitutter, mens banker og pengeinstitutter yder en række forskellige typer lån – både midlertidige lån og endelig finansiering. De midlertidige lån kan blandt andet ydes i form af byggekredit under opførelsen af et byggeri.

I Danmark er det muligt at låne 60% af markedsværdien af en erhvervsejendom gennem realkredit. Det samme gælder industri- og

håndværksejendomme. For boligudlejningsejendomme gælder en højere grænse for at give private muligheden for at låne til fast ejendom, hvor den maksimale lånegrænse er 80% af markedsværdien.

Ser vi nærmere på virksomhedernes valg af fremmedkapital til ejendomsfinansiering, er det tydeligt, at de mest populære lån er de rentetilpassede, hvilket udgør 85% af samlet udlån i 2017. Der er dog en stigende tendens til, at fastforrentede lån bliver mere udbredte, hvilket forklares ved de generelle forventninger til rentestigninger, der i markedet, hvorfor et fastforrentet lån med så lav en rente er attraktivt.

dragsfrihed været virksomhedernes fortrukne lån, men stramninger i reglerne for lån i Danmark har haft en tydelig effekt, da samlet udlån med afdrag i 2017 vægtede 51% mod kun 45% i 2016. Virksomheder med den fornødne egenkapital har tidligere valgt afdragsfrihed, da det har givet fleksibilitet og billigere ydelser.

Derudover er det værd at bemærke, at lån uden afdragsfrihed nu vægter mere end lån med afdragsfrihed. Historisk har lån med af-

PROPERTY FINANCING THE DANISH MORTGAGE SYSTEM IS ROBUST Denmark has a healthy and stable mortgage system, with legal requirements for equity.

The requirements for equity provides a high degree of robustness for the loan markets in case of “Financial Distress” or financial downturns. The most common types of loans are real estate loans or mortgage loans, issued by mortgage institutes, while banks and financial institutes issue a range of different types of loans – both temporary loans and final financing. The temporary loans can, for instance, be issued in the shape of a building credit during the construction of a new building.

14 DET DANSKE EJENDOMSMARKED 2018

In Denmark it is possible to loan 60% of the market value of a commercial property via a mortgage institute. The same applies to properties for industrial and manufacturing purposes. For rental properties on the housing market, a higher limit is set for private persons opportunities for loaning for the purchase of properties. In such cases, it is possible to loan up to 80% of the market value.

If we take a closer look at the companies’ choice in foreign capital for property financing, it is clear that the most popular loans are the ones with repricing. They make up 85% of the total amount of loans in 2017.

However, there is a tendency towards repriced loans becoming more common. This

is explained by the general expectations on the market to interest rates going up. Therefore, a repriced loan with an interest rate that low is attractive.

It is also worth noticing that loans with amortization now weigh in more than loans free of amortization. Historically, loans free of amortization have been preferred by the companies. A tightening of the rules for loans in Denmark has had a clear effect, since a total loan with amortization in 2017 weighed in at 51% compared to only 45% in 2016. Companies with the necessary equity have previously chosen loans free of amortization, because that provided flexibility and cheaper services.

TABEL 3.1: FINANSIERINGSSKEMA TABLE 3.1: FINANCING TABLE 2008 Samlet udlån for kontor- og forretningsejendomme i mia. DKK Total loans for commercial properties in DKK billions

2009

2010

2011

2012

2013

2014

2015

2016

2017

182,93 215,68 230,73 239,73 250,88 264,15 272,48 273,95 274,30 274,67

Andel af samlet udlån / Share of total loans Fastforrentet med afdragsfrihed / Fixed rate with grace period

3%

2%

2%

1%

1%

1%

1%

2%

2%

2%

Rentetilpasset med afdragsfrihed / Adjustable rate with grace period

51%

58%

60%

61%

60%

60%

59%

56%

53%

47%

Fastforrentet med afdrag / Fixed rate with repayment

22%

16%

12%

10%

9%

8%

8%

10%

11%

14%

Rentetilpasset med afdrag / Adjustable rate with repayment

24%

24%

26%

28%

30%

31%

32%

32%

34%

37%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Fastforrentet / Fixed rate

25%

19%

14%

12%

10%

10%

9%

11%

13%

15%

Rentetilpasset / Adjustable rate

75%

81%

86%

88%

90%

90%

91%

89%

87%

85%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Afdragsfrihed / Grace period

54%

60%

62%

62%

61%

61%

61%

58%

55%

49%

Afdrag / Repayment

46%

40%

38%

38%

39%

39%

39%

42%

45%

51%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Andel af samlet udlån / Share of total loans

Andel af samlet udlån m. & u. afdrag/ Share of total loans

Andel med afdragsfrihed Fastforrentet / Fixed rate Rentetilpasset / Adjustable rate

6%

4%

3%

2%

2%

2%

2%

3%

3%

3%

94%

96%

97%

98%

98%

98%

98%

97%

97%

97%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

47%

40%

33%

28%

23%

22%

20%

23%

25%

27%

Andel med afdrag Fastforrentet / Fixed rate Rentetilpasset / Adjustable rate

53%

60%

67%

72%

77%

78%

80%

77%

75%

73%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Kilde: Realkreditrådet / Source: Realkreditrådet

15 THE DANISH PROPERTY MARKET 2017

STIGENDE UDENLANDSK INTERESSE FOR DANSKE REALKREDITOBLIGATIONER Positivt for ejendomsfinansieringsmarkedet er også, at der, for fjerde kvartal 2017, meldes om faldene nedskrivninger på udlån til erhvervskunder i forhold til kvartalet før. Der er dog et lidt større fald i nedskrivningerne over for privatkunder, men gradvist giver det færre nedskrivninger og tab på det samlede udlån. Dette er endnu en understregning af, at der er positive takter i dansk økonomi, da låntagernes evne til at tilbagebetale gæld er forbedret. Det stabile realkreditsystem er også interessant for udenlandske investorer, hvis ejerandel af danske realkreditobligationer er steget fra 13% i 2010 til 26% i 2017, hvilket er en fordobling på bare syv år.

INCREASING FOREIGN INTEREST IN DANISH MORTGAGE BONDS It is also positive for the property financing market that, for the fourth quarter of 2017, impairments on loans for commercial customers are reported to have dropped compared to the previous quarter. However, impairments for private customers have dropped a little further, but it provides fewer impairments and losses on the total loans. This is yet another underlining of the positive developments in the Danish economy, since the ability of loan takers to pay back debt has improved. The stable mortgage system is also interesting for foreign investors, whose owners share in Danish mortgage bonds have risen from 13% in 2010 to 26% in 2017, which is to say it has doubled in only seven years.

STØRRE ERHVERVSUDLÅN I 2017 Udlånet til danske virksomheder steg med 2,1% i 2017 og dermed en fortsættelse af stigningen i 2016. Stigningen skyldes primært høj udlånsvækst til landbrug mv. og fast ejendom der voksede med 5,7% og 3,6% henholdsvis. Ifølge Nationalbanken er fast ejendom klart det mest dominerende aktiv for udlån, da cirka to tredjedele af det samlede erhvervsudlån dækker over ejendomshandel og udlejning.

Den stigende udvikling i virksomhedernes låntagning skyldes primært to faktorer: 1) de lave renter der billiggør fremmedkapital.

2) det økonomiske opsving hvor virksomhederne har behov for at foretage investeringer.

LARGE COMMERCIAL LOANS IN 2017 Loans to Danish companies went up by 2.1% in 2017 and thus the development from 2016 continued. The increase was primarily due to a high growth of lending to agriculture etc. and real estate of 5.7% and 3.6%, respectively. According to Nationalbanken (the National Bank), real estate is clearly the most dominating asset for loans, since around two thirds of the total commercial loans is actually property trade and rentals.

The rise in companies taking out loans is primarily due to two factors: 1) the low interest rates, making foreign capital cheaper.

2) the financial recovery, where the companies need to make investments.

16 DET DANSKE EJENDOMSMARKED 2018

CAPITAL MARKETS REKORDÅR FOR INVESTERINGSEJENDOMME 2017 blev uden tvivl det bedste år nogensinde for handlede investeringsejendomme og efterspørgslen er fortsat ind i 1. kvartal 2018 med en stigningpå næsten 20 procent i forhold til 1. kvartal sidste år. Transaktionsvolumen har vi anslået til at udgøre cirka 87 milliarder kr.

Følgende forhold har været medvirkende til den større volumen: • De gunstige finansieringsforhold, dvs. det lave renteniveau og muligheden for at kunne bruge det danske realkreditsystem med fastforrentede lån.

• Kontinuerlig politisk og økonomisk stabilitet, hvilket tiltrækker mange udenlandske investorer, som ser det danske marked for sikker havn i forhold til andre mindre sikre markeder.

• Ejendomspriserne i Danmark fortsat er lavere end resten af det nordeuropæiske marked herunder Tyskland, Holland, Norge og Sverige, hvilket giver investorerne mulighed for at bedre afkast i de kommende år.

Boligmarkedet var stadig den største sektor i 2017 med en andel på 44%. Volumen i segmentet for detail- og butiksejendomme var dog højere end kontorejendomme i 2017, hvilket primært skyldes salg af store shoppingcentre og butiksejendomme. I 2015 og 2016

udgjorde boligudlejnings- og kontorejendomme langt den største andel af transaktionsvolumen med næsten 75%. Dermed er bolig, detail og kontor fortsat de segmenter, der efterspørges mest. Det er værd at notere, at det hovedsageligt er primære aktiver / ejendomme, der efterspørges, og der er fortsat en relativt begrænset efterspørgsel på sekundært beliggende ejendomme.

I løbet af 2017 skete der flere større transaktioner, bl.a. erhvervede ATP Ejendomme 50% af Danica Pensions shoppingcenterportefølje i Danmark, og Danica købte ”Postgrunden”, hvor der skal udvikles meget store arealer som for eksempel et nyt hovedsæde til Danske Bank. I 2017 har flere af de registrerede større transaktioner involveret projektudvik-

CAPITAL MARKETS RECORD BREAKING YEAR FOR INVESTMENT PROPERTIES 2017 was the best year ever for trade activities with investment properties and this activity has continued in Q1 2018 with an increase of up to 20% from the same period the year before. We have estimated the transactional volume to be around DKK 87 billion.

The following circumstances have contributed to a larger volume: • Favourable financing possibilities, i.e. the low interest rates and the possibility of using the Danish mortgage system with loans with fixed interest rates.

• Continuous political and economic stability, which attracts many foreign investors, who

see the Danish market for safe harbor in relation to other less secure markets.

• Property prices in Denmark remain lower than the rest of the northern European market including Germany, the Netherlands, Norway and Sweden, which gives investors the opportunity to improve returns in the coming years.

The housing market was still the largest sector in 2017 with a share of 44%. The volume for the segment for retail properties and stores was bigger compared to office properties in 2017, which was primarily due to the sale of large shopping malls and stores. In 2015 and 2016, rental properties and offices, at almost 75%, were by far the largest part of the transactional volume. Thus, housing,

retail and offices are still the segments where the largest number of properties are in demand. It is worth noticing that the demand is primarily for primary properties.

The demand for secondary properties is still relatively limited.

During 2017, several major transactions took place, among others ATP Ejendomme bought 50% of Danica Pensions shoppingcentreportfolio in Denmark, and Danica bought ”Postgrunden”, where large areas are to be developed, for instance a new headquarters for Danske Bank. Many of the larger, registered transactions in 2017 have involved development projects, among other reasons because the market has only a relatively narrow selection to choose from – an element which we also see in other European countries.

17 THE DANISH PROPERTY MARKET 2018

ling, bl.a. fordi der ikke er et særligt stort udvalg i markedet – et element man også ser i de andre europæiske lande.

DEN LAVE RENTE ER STADIG EN DRIVER FOR INVESTERINGER I 2018 Den lave rente gør, at pensionskasser og investorer diversificerer væk fra obligationer, som historisk set har været et foretrukket aktiv grundet sikkerheden.

Ejendomme er en af de alternative investeringsmuligheder, som investorerne har udnyttet. Det danske marked byder på en høj sikkerhed og et godt afkast samtidig med en lav rente, som gør det meget attraktivt for investorerne.

I Newsec forventer vi, at den lave rente stadig vil være en driver for investeringer på sigt, og vi har derfor en forventning om, at transaktionsvolumen i 2018 vil komme til at matche 2017. Vi er opmærksomme på, at den amerikanske nationalbank vil fortsætte rentestigningerne, som vi forventer vil påvirke renteniveauet i Europa inden for de næste par år.

INVESTERINGER I PROJEKTER Mangel på de attraktive primære ejendomme i København og Aarhus giver investorer-

THE LOW INTEREST RATES ARE STILL A DRIVING FORCE FOR INVESTMENTS IN 2018 The low interest rates make pension funds and investors diversify their investments away from bonds, which, from a historical point of view, have been the preferred active due to security.

Properties are one of the alternative investment options used by investors. The Danish market has a high security and good returns combined with low interest rates. This is very attractive for investors.

At Newsec we expect the low interest rates to continue to be a driving force for investments in the long term and so we expect the transactional volume of 2018 to match the one from 2017. We are aware, however, that the American national bank is going to continue with increased interest rates. We expect this to have an impact on the interest rates in Europe over the next few years.

PROJECT INVESTMENTS The lack of attractive, primary properties in Copenhagen and Aarhus makes the investors

18 DET DANSKE EJENDOMSMARKED 2018

ne lyst til at kigge på udviklingsprojekter rundt omkring i Danmark. Store porteføljer af ejendomme eller større udviklingsprojekter er derfor også en af de primære årsager til, at vi i Danmark har oplevet højere volumen per transaktion, da de største transaktioner oftest inkluderer flere bygninger og ejendomme.

På grund af en forøgelse af kapital allokeret til ejendomsinvestering, foretrækker udenlandske og institutionelle investorer store porteføljer og udviklingsprojekter, da investeringerne her er langsigtede med stort potentiale i fremtiden og med få eller enkelte ejendomme, der bygges spekulativt.

Et andet segment der oplever øget interesse, især fra danske institutionelle investorer, er hoteller.

Udviklingen er specielt drevet af de største skandinaviske og nordiske hotelkæder i København, herunder Arp-Hansen, Scandic og Comwell. Der er således en række nye hoteller på vej i Hovedstadsområdet, hvilket tilføjer over 6.000 nye værelser til København inden 2021.

Vores forventninger til hotelmarkedet er, at afkastkravet pt. i København ligger i omegnen af 4-5% for primære hotelejendomme med lange kontrakter. For udviklingsprojekter i København, hvor der er en højere tomgangsrisiko og større usikkerhed vedrørende kontrakter, kan afkastet ligge noget højere, hvilket vi vurdere er i niveauet 5,57%, afhængig af klassificeringen af hotellet samt aftale med operatørerne.

INVESTERINGER BEVÆGER SIG OGSÅ UDEN FOR HOVEDSTADEN

Investorinteressen for hoteller ligger således også i god tråd med den generelle udvikling i turismen og efterspørgsel efter hotelværelser i København. I 2016 satte hotelbranchen i Danmark ny rekord i forhold til det samlede overskud, og 2017 ser også ud til at blive endnu et positivt år. I 2016 var hotelbranchens samlede overskud på mere end 2 milliarder kroner, og antallet af overnatninger er steget med over 20% de sidste fem år i København.

København viser sig igen at være det største marked i Danmark, og der er ikke noget, som tyder på, at dette kommer til at ændre sig i den nærmeste fremtid. I det første halvår af 2017, vurderer vi, at København og dens omegn stod for godt 68% af de samlede transaktioner.

want to look at development projects in other parts of Denmark. Therefore, large portfolios of properties or bigger development projects are some of the reasons why we have seen a higher volume per transaction. The biggest transactions tend to include more buildings and properties.

was more than DKK 2 billion and the number of bednights in Copenhagen has gone up by more than 20% over the last five years.

Because of a growth in capital allocated to property investment, foreign and institutional investors prefer large portfolios and development projects. The investments are long term, often with great potential for the future, with few or single properties built speculatively.

Another segment which experiences growing interest, particularly from Danish investors, is hotels.

Thus, the interest among investors for hotels is very much in line with the general development for tourism and the demand for hotel rooms in Copenhagen. In 2016 the Danish hotel business set a new record with regards to the total surplus and it looks like 2017 will be yet another positive year. In 2016 the total surplus of the hotel business

Vi ser dog tendenser til større investeringsaktivitet uden for København, da investorer-

The development is in particular driven by the largest Scandinavian and Nordic hotel chains in Copenhagen, including Arp-Hansen, Scandic and Comwell. Thus, new hotels are coming to the greater Copenhagen area, which adds 6000 new hotel rooms to Copenhagen before 2021.

Our expectations to the hotel market is that the return requirements in Copenhagen at the moment is around 4.00%-5.00% for primary properties with long contracts. For development projects in Copenhagen, with a higher risk of vacancy and a greater uncertainty regarding contracts, the level for return requirements may be slightly higher.

Oure estimate places the return rate requirements for these projects at around 5.50%7.00%, depending on the classification of the hotel and the agreement with the organization responsible for the daily operations.

ne i stigende grad jagter et højere afkast. Investorerne holder sig dog stadig til de større byer.

FIGUR 4.1: DEN DANSKE TRANSAKTIONSVOLUMEN I MIA IN BN

FIGUR 4.1: DEN TRANSAKTIONSVOLUME I DKK MIA. FIGURE 4.1:DANSKE THE DANISH TRANSACTIONS VOLUME FIGURE 4.1: THE DANISH TRANSACTION VOLUME IN DKK BILLION DKK mia / DKK bn 100

Det er vigtigt for investorerne, at byerne, de investerer i, har et byliv, og derfor er områder med universiteter også eftertragtede markeder – som eksempelvis Aarhus, Odense, Aalborg og Trekantområdet. De nævnte områder kommer sandsynligvis til at stå for en større del af den samlede transaktionsvolumen i fremtiden.

STOR UDENLANDSK INTERESSE De udenlandske investorer bliver fortsat mere synlige i det danske marked, hvor store tyske og svenske investorer har været aktive i Q1 2018.

Hvor internationale investorer stod for 4045% af de samlede transaktioner i det første halvår i 2016, kan vi konstatere, at andelen for samme periode i 2017 ligger i niveauet 55-60%. Vores svenske og norske naboer har tillige været yderst aktive gennem 2017. Nogle af de største transaktioner, vi har set på markedet, har involveret en svensk eller norsk investor. De store udenlandske spillere på markedet har været Heimstaden, Hines, Blackstones og Patrizia.

90 80 70 60 50 40 30 20 10 0

2008

2009

2010

2011

2012

2013

2016

2017

2018 E*

FIGUR 4.2: SEGMENTFORDELING AF VOLUMEN I PROCENT

BY VOLUME

FIGUR 4.2: DEN SEGMENTFORDELING TRANSAKTIONSVOLUME AF VOLUMEN I PROCENT I DKK FIGURE 4.2:DANSKE SEGMENT BREAKDOWN INMIA. PERCENT FIGURE 4.2: SEGMENT BREAKDOWN IN PERCENT BY VOLUME 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2012

Kontor / office

2013 Office /Kontor

2014 Bolig/Residential

Bolig / Residential

Industri / Industrial

2015 Detail/Retail

Detail / Retail

Andet / Other

Kilde: Newsev Advisory / Source: Newsec Advisory

INVESTMENTS ARE MOVING OUTSIDE THE CAPITAL

GREAT INTEREST FROM FOREIGN INVESTORS

Once again, Copenhagen turns out to be the biggest market in Denmark and there is nothing which might suggest that this will change in the immediate future. According to our calculations, Copenhagen and the greater Copenhagen area had 68% of the total amount of transactions in the first half of 2017.

Foreign investors continue to bec0me more visible on the Danish market where large swedish and german investors have been active in Q1 2018.

It is important to the investors that the cities where they make their investments, have a city life. Therefore, areas with universities are attractive markets - such as Aarhus, Odense, Aalborg, and the Triangular area (Fredericia, Vejle and Kolding). These areas are likely to take over a larger proportion of the total transactional volume in the future.

2015

Kilde: Newsec Advisory / Source: Newsec Advisory

Kilde / Source: Newsec Advisory A/S

However, we see some tendencies towards more investment activities outside Copenhagen, since the investors are looking for higher returns. That being said, the investors still focus on the most densely populated areas.

2014

Danmark Copenhagen Kilde / Source: Newsec Egeskov & Lindquist / Denmark KildeDanmark / Source: Newsec Egeskov & Lindquist København / Copenhagen

Whereas foreign investors were responsible for 40-45% of the total number of transactions in the first half of 2016, we can now ascertain that the proportion for the same period of 2017 is around 55-60%. Our Swedish and Norwegian neighbours have been very active throughout 2017. Some of the largest transactions we have seen on the market have involved a Swedish or Norwegian investor. The great foreign players on the market have been Heimstaden, Hines, Blackstones and Patrizia.

Industri/Industrial

2016 Andet/Other

2017

DKK LEJESPÆND % TOMGANG

Kr. pr. m2 p.a. ekskl. drift

AALBORG

NORDJYLLAND

5,9%

700 1.200

7,4%

Pr. 01/01 2018

STORKØBENHAVN

600 1.250

HELE LANDET

STORAARHUS

700 1.100

AARHUS CITY

1.000 1.500

7,7% ØSTJYLLAND

TREKANTSOMRÅDET

ODENSE CITY

600 1.100

500 1.100

8,9%

FYN

20 DET DANSKE EJENDOMSMARKED 2018

11,4%

KØBENHAVNS OMEGN

KONTORMARKEDET KØBENHAVNS HAVNEAREALER/ NORDHAVN/TUBORG

1.000 2.100

KONTORMARKEDET ER I VÆKST Efterspørgslen for kontorejendomme, blandt brugere såvel som investorer, er høj i disse år. Den positive og stabile økonomiske udvikling med et stigende antal beskæftigede og øget vækst stiller krav til mere plads for virksomhederne rundt omkring i landet. Beliggenhed i forhold til infrastruktur og gode transportmuligheder er en af de væsentligste faktorer, når virksomheder skal placere sig. For at tiltrække de dygtige medarbejdere er det et aktiv, hvis beliggenheden er rigtig i forhold til de ansattes bopæl og afstanden til og fra arbejdspladsen.

Kontorlejere foretrækker især at være hvor der er liv. Enten i byen, hvor de er omgivet af restauranter – eller i Storkøbenhavn i flerbrugerejendomme – altså med andre lejere, hvor de deler cantine og andre fælles faciliteter m.v. På trods af forbedringen i infrastruktur er parkering også et vigtig krav for mange lejere i København city.

Derudover foretrækker lejere stadig moderne og fleksible kontorfaciliteter, hvorfor nye eller velreno-

veret kontorejendomme er attraktive og efterspurgte i markedet. Både i København og Aarhus har vi set eksempler på virksomheder, der vælger at bygge store nye domiciler for dels at sende et signal til omverdenen om virksomhedens størrelse og dels at understøtte virksomhedens identitet internt såvel som eksternt. Især banker, store medier og andre C25-virksomheder har enten færdigbygget, igangsat eller projekteret et stort kontordomicil i løbet af det sidste år.

En anden årsag til øget aktivitet på kontormarkedet kan være politiske initiativer. Regeringens beslutning om igen at udflytte statslige arbejdspladser frigiver således nogle attraktive kontorlejemål med gode placeringer i København og skaber aktivitet i nogle af landets yderområder. Det bliver i 2018 og 2019 interessant at følge, hvorledes dette har indvirkning på målet om at skabe et mere dynamisk Danmark.

Investorerne efterspørger i høj grad kontorejendomme, og kontormarkedet har yderst positive udsigter i 2018. Både danske og udenlandske investo-

THE OFFICE MARKET KØBENHAVN CITY

5,7%

THE OFFICE MARKET IS BOOMING The demand for office properties is high these days, among users as well as investors. The positive and stable development in the economy with a higher amount of people in employment and more growth demands more space for the businesses around the country. Location in relation to infrastructure and good transportation options are some of the most important factors when businesses are looking to establish themselves and find a suitable location. It is an advantage in order to attract skilled and capable employees if the location is right in relation to the employee´s residence and the distance to the workplace.

Office tenants prefer to be in lively spots. Either in the city, surrounded by restaurants – or in Copenhagen in multiuser properties together with other tenants and with canteens and other shared facilities etc. In spite of recent infrastructure improvements, parking is also an important requirement for many tenants in central Copenhagen.

Other than that, tenants still prefer modern and flexible office facilities. Therefore, newer, or newly renovated office properties are attractive and in demand on the market. In Copenhagen as well as in Aarhus we have seen businesses choosing to build large, new headquarters, in order to both make a

21 THE DANISH PROPERTY MARKET 2018

rer investerer i kontorejendomme med meget lave afkast centralt i Aarhus og København, mens vi i 2017 så en stigende interesse uden for de klassiske storbyer. Der er en forventning om fortsat faldende tomgang for kontorer, da tomgangen lige nu er lav men stadig ikke helt i bund, og derfor eksisterer der potentiale for yderligere fald.

Den stigende efterspørgsel efter kontorejendomme mærkes i høj grad ved de mange projekt- og udlejningsejendomme, der er under opførsel. Solstra har således planer om opførelse af 130.000 kvadratmeter kontor i det nye Bellakvarter i København, hvor spekulativt byggeri overvejes på grund af den øgede efterspørgsel i markedet. Danica Pension er i gang med at opføre 142.000 kvadratmeter kontor ved Posthus Grunden, og i Carlsberg Byen er der over 100.000 kvadratmeter moderne kontorfaciliteter til udlejning over de kommende år.

KØBENHAVN – FALDENDE TOMGANG ØGER LEJEPRISER OG SÆNKER FORRENTNINGSKRAV I København falder udbuddet af ledige kontorlokaler fortsat, og lige nu melder Ejendomstorvet om en tomgang på 5,7% for Kø-

statement for everyone to see about the company’s size and provide a home for the company identity, supporting the brand and the company spirit both internally and externally. Especially banks, media companies and other C25-companies have either built, started building or projected a large office headquarter during the last year.

Political initiatives can be another reason for more activity on the office market. Thus, the government’s decision to relocate state workplaces once again makes some very attractive offices with good locations in Copenhagen available and creates activity in some of the country’s more remote areas. It will be interesting to see the developments in 2018 and 2019 and find out how this influences the objective of creating a more dynamic Denmark.

The investors often ask for office properties, and the office market is looking towards a bright 2018 with positive forecasts. Danish and foreign investors invest in office properties with very low returns in central Aarhus and Copenhagen and we have seen a growing interest in properties outside the largest cities. The vacancy for offices is expected to drop even further. Vacancy rates are low 22 DET DANSKE EJENDOMSMARKED 2018

benhavn by, mens Københavns omegn er på 11,4%.

Den øgede efterspørgsel kan også ses i prisudviklingen for lejeniveauet. Prisen for primære kontorer i København ligger på 1.600 - 2.100 kr. pr. kvadratmeter (+ driftsomkostninger), hvilket er en stigning på over 10% på bare tre år. For sekundære kontorejendomme ligger lejeniveauet mellem 1.000 1.400 kr. pr. kvadratmeter.

Forrentningskravet er faldet yderligere i løbet af 2017, og gennemsnitligt ligger niveauet mellem 4,0% - 5,5% for København. Disse tal er endnu et udtryk for, at investorerne fortsat søger mod kontorejendomme, og de er villige til at acceptere lavere forrentningskrav og høje ejendomsværdier for de mest attraktive kontorejendomme. Disse faktorer presser typisk også investorer udenfor København, hvor der har været en stigende interesse og vores forventninger er, at forrentningskravene også vil blive påvirket i sekundære områder. Trods fald i tomgangen for kontorlokaler i Storkøbenhavn er efterspørgslen endnu ikke på samme niveau som i København by, hvilket fortsat ligger et pres på lejeniveauer uden for København. Det er

right now, but it is assumed that they have not yet reached the lowest point, which leaves some potential for additional vacancy rate drops.

The increasing demand for office properties can be seen when looking at the many project and rental properties that are currently under construction. Thus, Solstra is planning to build 130 000 square meters of office space, and speculative building is under consideration due to the increased demand on the market. Danica Pension are currently building 142 000 square meters of office space at Posthus Grunden, and in Carlsberg Byen there are over 100 000 square meters of modern office facilities to be leased over the next few years.

COPENHAGEN – LOWER VACANCY RATES INCREASE RENTAL PRICES AND LOWER RETURN RATE REQUIREMENTS In Copenhagen, the number of vacant offices is still decreasing, and right now Ejendomstorvet reports a vacancy of 5.7% for Copenhagen city, whereas the vacancy for the greater Copenhagen area is at 11.4%.

The increased demand is of course reflected in the development of the rent prices. The

en af hovedårsagerne til at vi ser i øjeblikket ser så store spænd i lejeniveauerne fra centrum af de store byer til ydre områder.

AARHUS – FORTSAT LAV TOMGANG PÅ TRODS AF FLERE KONTORKVADRATMETER Kontormarkedet i Aarhus buldrer således også fremad. Mange spændende projekter og kontorhuse er i udvikling, og på trods af at der bliver tilføjet flere kontorkvadratmeter til Aarhus, så er tomgangen i området omkring Østjylland fortsat lav på kun 7,7%.

For primære kontorejendomme centralt i Aarhus ligger forrentningskravet på 4,8%, hvor det andre steder i Østjylland er omkring 5,0% - 6,5%. Regionens byudvikling har i den grad bidraget til den stigende efterspørgsel på både boliger og kontorer, hvilket gør området yderst interessant for investorer.

Lejeniveauet for kontorer i Aarhus er fortsat lavere end i København, men gennemsnitligt ligger de bedst placerede ejendomme på et niveau omkring 1.400 kr. - 1.600 kr. pr. kvadratmeter (+ driftsomkostninger), mens gennemsnitslejen generelt ligger i intervallet 900 - 1.100 kr. pr. kvadratmeter.

price for primary offices in Copenhagen is at DKK 1 600 – 2 100 per square meter (not including operational expenses), which is an increase of over 10% during just three years.

For secondary office properties the rent is between DKK 1 000 and 1 400 per square meter.

The required rate of return has gone down even further in 2017, and on average the level is between 4.0% and 5.5% for Copenhagen.

These numbers yet again express the tendency for investors to seek out office properties and they are willing to accept low required rates of return and high property values for the most attractive office properties. These factors also push investors beyond the city limits of Copenhagen, where we see an increased interest in investments and we expect that to have an influence on the required rates of return in these secondary areas as well. In spite of the drop in vacancy rates for offices in the greater Copenhagen area, the demand has yet to reach the same level as in the city centre. Therefore, we still see a certain amount of pressure on the level for rent prices outside Copenhagen. That is one of the main reasons why we see such differences between the rent price level in the

FIGUR 5.1: KONTORTOMGANG I PROCENT

FIGUR 5.1: KONTORTOMGANG I PROCENT FIGURE 5.1: VACANCY RATE FOR OFFICE PROPERTIES IN PERCENT FIGURE 5.1: VACANCY RATE FOR OFFICE PROPERTIES IN PER CENT % 18 16 14 12 10 8 6 4 2 0

Q1

Q2

Q3

Q4

Q1

Q2

2012

Q3

Q4

Q1

Q2

2013

Q3

Q4

Q1

Q2

2014

Q3

Q4

Q2

Q3

Q4

Q1

2016

Østjylland Østjylland København by København

Københanvs omegn

Nordsjælland

by Københavns omegn Kilde: Newsec Advisory / Source: Kilde / Source: Ejendomstorvet.dk Kilde/Source: Newsec Advisor A/S

Q1

2015

Q2

Q3

Q4

2017

Q1

Q2

2018

Fyn Hele landetFyn Nordsjælland

Hele landet

Newsec Advisory

FIGUR 5.2: FORRENTNINGSKRAV PÅ PRIMÆRE KONTOREJENDOMME I PROCENT

FIGUR 5.2: FORRENTNINGSKRAV PÅ PRIMÆRE KONTOREJENDOMME I PROCENT FIGURE 5.2: YIELD FOR PRIMARY OFFICE PROPERTIES IN PER CENT FIGURE 5.2: YIELD FOR PRIMARY OFFICE PROPERTIES IN PER CENT % 7,00 6,00 5,00 4,00 3,00 2,00 1,00 0,00

Q1

Q2

Q3

Q4

Q1

Q2

2012

Aarhus

Q3

Q4

Q1

Q2

2013

Q3

Q4

Q1

2014

Københanv / Copenhagen Aarhus

Q2

Q3

Q4

Q1

Q2

2015

Q3

Q4

Q1

2016

Q2

Q3

Q4

2017

Q1

Q2

2018

Trekantsområdet / Triangle Area

København/Copenhagen

Trekantsområdet/Triangle Area

Kilde: Newsec Advisory / Source: Newsec Advisory Kilde / Source: Newsec Advisory A/S

FIGUR 5.3: LEJENIVEAUER PÅ PRIMÆRE KONTOREJENDOMME I DKK

FIGUR 5.3: LEJENIVEAUER PÅ PRIMÆRE KONTOREJENDOMME I DKK FIGURE 5.3: RENTAL LEVELS FOR PRIMARY OFFICE PROPERTIES IN DKK FIGURE 5.3: RENTAL LEVELS FOR PRIMARY OFFICE PROPERTIES IN DKK DKK 2.500

2.000

1.500

1.000

500

-

Q1

Q2

Q3

Q4

Q1

2012

Aarhus

Q2

Q3

Q4

Q1

Q2

2013

Københanv / Copenhagen Aarhus

Q3

Q4

Q1

2014

Q2

Q3

Q4

Q1

2015

Q2

Q3

Q4

2016

Q1

Q2

Q3

2017

Q4

Q1

Q2

2018

Trekantsområdet / Triangle Area

København/Copenhagen

Trekantsområdet/Triangle Area

Kilde: Newsec Advisory / Source: Newsec Advisory

Kilde / Source: Newsec Advisory A/S

TABEL 5.1: SIGNIFIKANTE INVESTERINGER TABLE 5.1: KEY INVESTMENT Sælger

Køber

Projekt

Primær anvendelse

Område

Volume i mio

Areal i antal m2

Dades

Klövern

Codan domicil

Kontor

København

Danica

NIAM

Undervisningslokaler

Kontor

Odense

1.440

41.000

200

26.000

SEB Ejendomme

PensionDanmark, Sampension & Kristensen Properties

Teknikkerbyen

Kontor

Virum

615

47.000

Midtconsults

PensionDanmark

Midtconsults domicil

Kontor

Herning

100

6.411 23 THE DANISH PROPERTY MARKET 2018

central areas of the bigger cities and the prices in the areas outside the city itself.

AARHUS â&#x20AC;&#x201C; CONTINUED LOW VACANCY IN SPITE OF MORE SQUARE METERS OF OFFICE SPACE The office market in Aarhus is also experiencing huge growth. Many exiting projects and office houses are being developed and in spite of more office square meters being added to Aarhus, the vacancy in East Jutland is still low at 7.7% For primary office properties in central Aarhus the required rate of return is 4.8%. The rate on other locations in East Jutland is around 5.0% to 6.5%. The urban development in the region has contributed to the increased demand for both residential properties and offices. This makes the area very attractive to investors.

The level of rent prices for offices in Aarhus is still lower compared to Copenhagen, but on average the properties with the best locations are at a level of about DKK 1 400 to 1 600 per square meter (operational expenses not included), while the average rent in general is between DKK 900 and 1 100 per square meter.

24â&#x20AC;&#x192; DET DANSKE EJENDOMSMARKED 2017

25â&#x20AC;&#x192; THE DANISH PROPERTY MARKET 2018

DKK LEJESPÆND % TOMGANG

Kr. pr. m2 p.a. ekskl. drift

AALBORG

Pr. 01/01 2018

200 400

NORDJYLLAND

1,7%

KØGE BUGT HØJLAGER

250 500

STORAARHUS

250 450 HELE LANDET

2,3%

ØSTJYLLAND

3,1%

KØBENHAVNS OMEGN

TREKANTSOMRÅDET

150 450

FYN

1,9% 26 DET DANSKE EJENDOMSMARKED 2018

150 350

4,1% SJÆLLAND

200 550

INDUSTRIMARKEDET VOKSENDE E-HANDEL DRIVER MARKEDET FOR INDUSTRI- OG LOGISTIKEJENDOMME

STORKØBENHAVN

300 600

Den klart største driver for udviklingen i markedet for industri- og logistikejendomme er e-handel.

Danskernes brug af online handel bliver ved med at vokse og giver virksomhederne incitament til at investere i smarte og moderne løsninger, der kan følge med forbrugerne og kundernes efterspørgsel. Store logistikejendomme tæt på især de større byer bliver således mere udbredt. Her, hvor der ikke er langt fra lager til kunde, samles en bred række af logistikservicevirksomheder i den samme ejendom, så forbrugsmønstre og efterspørgsel hurtigt kan tilpasses.

På trods af en lille nedgang i industriens produktionsindeks i tredje kvartal af 2017, steg indekset igen i slutningen af 2017. Danmarks produktion har haft en opadgående tendens siden 2009, hvilket har en positivt afsmittende effekt på markedet for industri- og logistikejendomme. Antallet af tomme industri- og logistik lokaler har i en længere perio-

de været lavt. Seneste tal for Storkøbenhavn viser en tomgang på 4,1%, hvilket er meget lavt. Dog ses tomgangsprocenten for Storkøbenhavn at være stigende. Efter i 2016 at have oplevet et voldsomt fald fra ca. 6,5% til under 3% er tomgangsprocenten i 2017 nu steget til ca. 4,1%. Til sammenligning er gennemsnittet på landsplan omkring 2,3%. Det er især nye lokaler med faciliteter som god loftshøjde og store, effektive læsseramper, der er høj efterspørgsel på blandt virksomheder, og flere virksomheder ses nu at overveje nybyggeri.

For 1. kvartal af 2018 har vi oplevet en stor stigning i især udenlandske investores interesse for industri og logistik ejendomme for sekundære områder.

ATTRAKTIVE BELIGGENHEDER I STORKØBENHAVN ER EN MANGELVARE Specielt nyere tomme produktions- og lagerejendomme nær gode transportmuligheder, herunder langs motorvejsstrækninger, er en mangelvare,

LOGISTICS GROWING ONLINE TRADE DRIVES THE MARKET FOR PROPERTIES FOR INDUSTRIAL AND LOGISTICAL PURPOSES Clearly, the biggest driving force for the development of the industrial and logistical property market is online trading.

The Danish use of online trading continues to grow and provides incentives for the investment in smart and modern solutions that match the demands from consumers and customers. Large logistics properties, close to the larger cities, are increasingly common. Here, with a short distance from the warehouse to the customer, a broad range of companies within logistics and service often share a single property, in order to be able to adapt quickly to changing consumption patterns and demands.

In spite of a slight decline in the industrial productivity index in the third quarter of 2017, the index increased again towards the end of 2017.The Danish productivity has had a tendency to be going up since 2009, which has a positive spillover effect on the market for properties suited for industrial and logistical purposes. The number of empty industrial rooms and warehouses has been low for quite some time. The latest numbers for the greater Copenhagen area shows a vacancy of 4.1%, which is very low. However, the vacancy in the greater Copenhagen are appears to be going up. Following a significant drop in 2016, from around 6.5% to less than 3%, the vacancy percentage has now gone up to about 4.1%. For comparison, the nationwide median percentage is around 2.3%. In particular new rooms with facilities such as good ceiling height

27 THE DANISH PROPERTY MARKET 2018

da disse ejendomme er attraktive for investorer såvel som brugere. Mange virksomheder vælger i den forbindelse at investere i udviklingsprojekter og købe tomme grunde for så at bygge nye ejendomme og lokaler.

Der er i øjeblikket et beskedent antal tomme byggegrunde i Storkøbenhavn, hvilket er problematisk for virksomheder, der ønsker at bygge nye og skræddersyede produktions-, logistik og lagerejendomme. Finansieringen af nybyg er stadig en udfordring for visse typer virksomheder. De fleste nybyggede produktions- og logistikejendomme er typisk skræddersyede til brugerne, og det er derfor oftest et krav fra investorerne, at lejere i nyopførte ejendomme skal binde sig til en lang lejekontrakt på minimum 10 år, hvilket for mindre virksomheder kan være en udfordring.

På grund af de få muligheder for nybyggeri i Storkøbenhavn og den meget lave tomgang, ses det, at både virksomheder og investorer begynder at kigge efter alternative placeringer, for eksempel Nord- eller Vestsjælland.

and large, effective loading ramps are in great demand among the businesses and we see several businesses considering the building of new properties.

In Q1 2018 we have seen great interest from especially international investors for logistic properties in secondary areas of Denmark.

ATTRACTIVE LOCATIONS IN THE GREATER COPENHAGEN AREA ARE SCARCE New, empty properties suited for industrial and logistical purposes, close to good transportation solutions, such as the motorway network, are particularly scarce, since these properties are attractive for investors as well as property users.

In this context, many businesses choose to invest in development projects and buy empty plots in order to build new properties and rooms. At the moment there is a limited amount of empty building plots in the greater Copenhagen area, which is a problem for businesses wishing to build new, customized buildings for production, logistics and warehousing. The financing of new constructions is still a challenge for certain types of businesses. Most newly built properties for production and logistics are typically customized for the property users. Thus, the investors often demand that the tenants in newly built properties commit to a long lease contract of 28 DET DANSKE EJENDOMSMARKED 2018

Hvor mange udenlandske investorer betragter det meste af Sjælland som værende Storkøbenhavn, er situationen dog en anden i forhold til danske virksomheder, der oftest finder det udelukket at overveje en placering længere væk end Greve, Taastrup eller Ballerup.

MANGE FORDELE VED NYBYG Fordelene ved at bygge nye industri- og logistikejendomme er også muligheden for selv at kunne styre, hvorledes alle virksomhedens behov til teknologi bliver opfyldt, ligesom processer kan effektiviseres. Fremfor at tilpasse virksomhedens processer til ejendommen, tilpasses ejendommen virksomhedens processer. Ligeså vigtigt er dog andre knap så åbenlyse behov som eksempelvis gennemtænkte løsninger, hvor ejendommen har den fornødne robusthed, kræver minimal vedligeholdelse og er energivenlige.

Især bæredygtighed bliver et mere alment krav for investorerne af industri- og logistikejendomme, præcis som vi ser det med kontorejendomme.

at least ten years, which can be a challenge, especially for smaller businesses.

Due to the few possibilities for new constructions in the greater Copenhagen area and the very low vacancy, we see both businesses and investors who are looking for alternative location options, for instance in North Zealand or to the west. Whereas many foreign investors see most of Zealand as actually being the greater Copenhagen area, the situation is quite different with Danish companies. Often, they refuse to look for a location further away than Greve, Taastrup or Ballerup.

MANY ADVANTAGES WHEN BUILDING NEW PROPERTIES An important advantage when building new properties for industrial and logistical purposes is the freedom to control the way the company`s needs for technological solutions are being met, and many processes can be made more efficient. Rather than changing the processes in the company to adapt to the property, the property is made to fit the company processes. Other, maybe not so obvious needs are equally important, such as solutions which are well developed, where the property is robust, energy friendly and only needs minimal maintenance. Sustainability in particular is becoming a very common demand from investors working with industrial and logistics properties, just as we see with office properties.

FIGUR INDUSTRI/LOGISTIKTOMGANG I PROCENT FIGUR 6.1:6.1: INDUSTRI/LOGISTIKTOMGANG I PROCENT FIGURE VACANCY FOR INDUSTRIAL/LOGISTICS PROPERTIES FIGURE 6.1:6.1: VACANCY RATERATE FOR INDUSTRIAL/LOGISTICS PROPERTIES IN PER CENTIN PERCENT % 8 7 6 5 4 3 2 1 0

Q1

Q2

Q3

Q4

Q1

Q2

2012

Q3

Q4

Q1

Q2

2013

Hele landet

Københanvs omegn

Hele landet

Københavns omegn

Kilde/Source: Ejendomstorvet Kilde: Newsec Advisory /

Q3

Q4

Q1

Q2

2014

Q3

Q4

Q1

2015

Nordsjælland

Nordsjælland

Fyn

Q2

Q3

Q4

Q1

2016

Fyn

Q2

Q3

Q4

Q1

2017

Q2

2018

Østjylland

Østjylland

Source: Newsec Advisory

FIGUR 6.2: FORRENTNINGSKRAV PÅ PRIMÆRE INDUSTRI/LOGISTIK EJENDOMME I PROCENT

FIGUR 6.2: FORRENTNINGSKRAV PÅ PRIMÆRE INDUSTRI/LOGISTIK EJENDOMME I PROCENT FIGURE YIELD FOR PRIMARY INDUSTRIAL/LOGISTICS IN PERCENT FIGURE 3.4:6.2: YIELD FOR PRIMARY INDUSTRIAL/LOGISTICS PROPERTIES PROPERTIES IN PER CENT % % 8,00 7,50

7,00

6,50

6,00

5,50

5,00

Q1

Q2

Q3

Q4

Q1

2012

Aarhus

Q2

Q3

Q4

Q1

2013

Q3

Q4

Q1

2014

Københanv / Copenhagen

Aarhus

Kilde: Newsec Advisory Source: Kilde / Source: Newsec Advisory/A/S

Q2

Q2

Q3

Q4

Q1

Q2

2015

Trekantsområdet / København/Copenhagen

Q3

Q4

Q1

2016

Q2

Q3

Q4

2017

Q1

Q2

2018

Triangle Area Trekantsområdet/Triangle Area

Newsec Advisory

FIGUR 6.3: LEJENIVEAUER PÅ INDUSTRI/LOGISTIK EJENDOMME I DKK

FIGUR 6.3: LEJENIVEAUER PÅ INDUSTRI/LOGISTIK EJENDOMME I DKK FIGURE 6.3: RENTAL FOR INDUSTRIAL/LOGISTICS PRIMARY INDUSTRIAL/LOGISTICS PROPERTIES IN DKK FIGURE 6.3: RENTAL LEVELSLEVELS FOR PRIMARY PROPERTIES IN DKK DKK 700 600 500 400 300 200 100 0

Q1

Q2

Q3

2012

Aarhus

Q4

Q1

Q2

Q3

Q4

2013

Københanv / Copenhagen Aarhus

Newsec / Source: KildeKilde: / Source: NewsecAdvisory Advisory A/S

Q1

Q2

Q3

Q4

Q1

2014

Q2

Q3

Q4

2015

Q1

Q2

Q3

Q4

Q1

2016

Q2

Q3

2017

Q4

Q1

Q2

2018

Trekantsområdet / Triangle Area

København/Copenhagen

Trekantsområdet/Triangle Area

Newsec Advisory

TABEL 6.1: SIGNIFIKANTE INVESTERINGER TABLE 6.1: KEY INVESTMENT Sælger

Køber

Projekt

Primær anvendelse

Område

Brugere

M7 Real Estate

Sale&Lease transaktioner

Back

Industri/Logistik

Storkøbenhavn, Trekantsområdet

Lemvigh-Müller Privat

M&G Real Estate

Portfølje af ejendomme

Industri/Logistik

Køge, Odense & Kolding

Stensdal Group

Investeringsejendom

Industri/Logistik

Brøndby

Fyn,

Volume i mio

Areal i antal m2

520

117.000

438

75.000

45

11.800 29

THE DANISH PROPERTY MARKET 2018

FIGUR PRODUKTIONSINDEKS FIGUR6.4: 6.4:INDUSTRIENS INDUSTRIENS PRODUKTIONSINDEKS FIGURE 6.4: THE INDUSTRIAL PRODUCTION INDEX

FIGURE 6.4: THE INDUSTRIAL PRODUCTION INDEX

130 125 120 115 110 105

2012

2013

2014

2015

2016

2017

Kilde/Source: Danmarks Statistik

Kilde: Danmarks Statistik / Source: Danmarks Statistik

FIGUR 6.5: DANSK E-HANDELS OMSÆTNING DKK MIA. FIGUR 6.5: DANSK E-HANDELS OMSÆTNING I DKKI MIA. FIGURE 6.5: DANISH E-COMMERCE IN DKK BILLIONS FIGURE 6.5: DANISH E-COMMERCE IN DKK BILLIONS DKK MIA / DKK BN 90

80

70

60

50

40

30

2012

Kilde / Source: DIBS.dk

30 DET DANSKE EJENDOMSMARKED 2018

2013

2014

2015

2016

2017

M01

M11

M09

M07

M05

M03

M01

M11

M09

M07

M05

M03

M01

M11

M09

M07

M05

M03

M01

M11

M09

M07

M05

M03

M01

M11

M09

M07

M05

M03

M01

M11

M09

M07

M05

M03

M01

100

2018

SVAGT STIGENDE MARKEDSLEJE Markedslejen for produktions- og logistikejendomme har været svagt stigende gennem de sidste to år. For nybyggede ejendomme i Storkøbenhavn er lejeniveauet mellem 550 - 600 kr. pr. kvadratmeter. Alt afhængig af stand, bygningshøjde og ramper er lejeniveauet for den eksisterende bygningsmasse i middel stand 350 – 450 kr. pr. kvadratmeter.

Afkastet afhænger dels af beliggenheden og lejekontraktens varighed. Afkastkravet ligger på 6,0 - 6,5% for primære ejendomme med lange kontrakter, 7,0 - 7,8% for middel placeringer og 8,0 - 8,75% for under middel placeringerne.

I Østjylland er tomgangen opgjort til 3,1%, hvilket er særdeles lavt. Forrentningskravet

SLIGHTLY INCREASING MARKET RENT The market rent for properties for industrial and logistical purposes has experienced a slight rise in the last two years. For newly built properties in the greater Copenhagen area the rent level is between DKK 550 - 600 per square meter. Depending on the condition, building height and ramps, the rent level for the existing building stock in medium condition is DKK 350 – 450 per square meter. The return depends in part in the location and the duration of the lease contract. The required rates of return are around 6.0 – 6.5% for primary properties with long leases, 7.0 – 7.8% for medium locations, and 8.0 – 8.75% for those below middle.

In East Jutland the vacancy is calculated to be 3.1%, which is very low. The required rates of

er på cirka 6,3 - 7% for de bedste ejendomme med lange lejekontrakter, 7,3 - 7,8% for middelklasse ejendomme og +8% for ejendomme under middel. Lejeniveauet er stadig lavere i Østjylland på omkring 400 kr. pr. kvadratmeter for de primære lager og logistikejendomme, og 300 kr. pr. kvadratmeter for sekundære ejendomme. I andre dele af Danmark, herunder Nordjylland og Vest- og Sydsjælland, er tomgangen helt nede under 2% for logistik- og industriejendomme.

forbrugerne overalt i landet. Derudover ligger afkastet i disse områder i niveauet 7,5 – 8,5%, hvilket er attraktivt for investorer med en større risikoappetit.

I Midtjylland og Trekantområdet ses også en stigende interesse fra danske såvel som udenlandske virksomheder i forhold til at placere sig med produktions- og industriejendomme, da området har en central beliggenhed i Danmark, hvorfra man hurtigt kan nå

return are around 6.3 - 7% for the best properties with long leases, 7.3 – 7.8% for medium properties and +8% for properties below middle. The rent level is still lower in East Jutland.

Around DKK400 per square meter for the primary properties for industrial and logistical purposes and DKK 300 per square meter for secondary properties. In other parts of Denmark, such as North Jutland and West and South Zealand, the vacancy is even below 2% for properties for industrial and logistical purposes.

reach consumers in any part of the country quickly. Additionally, the return in these areas typically lies at around 7.5 – 8.5%, which is attractive to investors with more of an appetite for risks.

In Central Jutland and the Triangular area between Vejle, Fredericia and Kolding, we also see a growing interest in positioning one´s business with properties for industrial and logistical purposes, since the area has a central location in Denmark, from which you can

31 THE DANISH PROPERTY MARKET 2018

% T OMGANG DKK LEJESPÆND Pr. 01/01 2018

Kr. pr. m2 p.a. ekskl. drift

6,7% NORDJYLLAND

AALBORG

HELE LANDET

5,4%

1.000 5.000

KØBENHAVN STRØGET/ KØBMAGERGADE

18.000 22.500

ØSTJYLLAND

5,5% STORAARHUS

500 1.500

KØBENHAVN CITY/ FREDERIKSBERG

AARHUS CITY

AARHUS STRØGET

KØBENHAVN CITY

750 2.500

1.850 5.000

3.000 7.500

3,6%

STORKØBENHAVN

800 5.000

KØBENHAVNS OMEGN

TREKANTSOMRÅDET

800 3.300

ODENSE CITY

750 2.500

ODENSE VESTERGADE

1.400 5.500

32 DET DANSKE EJENDOMSMARKED 2018

2,9%

SJÆLLAND

600 3.500

DETAILMARKEDET DETAILMARKEDET FORNYER SIG Der har været en klar stigning i dansk privatforbrug det seneste år. Større friværdi og beskæftigelse får danskerne til at bruge flere penge. Denne stigning er generelt positiv for alle sektorer af dansk detailhandel. Der er dog også en klar tendens til, at de store byer drager mest fordel af udviklingen, hvor beskæftigelsen stiger mest, og friværdien er størst.

Den stigende online-handel er stadig en udfordring for de klassiske fysiske butikker, men mange butikker har efterhånden set og udnyttet mulighederne for at komplementere e-handel samt forbedre oplevelsen for kunder, der besøger de fysiske butikker med ek-

sempelvis god service, samme priser både online som i butikken og loyalitetsklubber med særlige tilbud.

Det lader til, at investorerne også har bemærket denne tendens. Således blev der i 2017 investeret store summer i shoppingcentre og butiksporteføljer, hvor interessen var særlig høj. Investeringerne er et forsøg på at udvikle og forbedre shoppingcentrene, således at forbrugerne får en større og anderledes oplevelse, når de tager ud og handler end ved at købe sine varer på internettet.

november viste, hvorledes Amagertorv og Østergade er de fjerde og femte mest populære shoppinggader i Europa. Målt på antal fodgængere var de to københavnske gader, også kendt som Strøget, kun overgået af profilerede gader i London, Paris og Barcelona.

Det er især de store eksklusive luksusbrands inden for bolig, tøj og sko samt ure og smykker, der har til huse i de flotte gamle ejendomme på Strøget, og kombinationen af sightseeing og shopping i indre København er unik for mange turister.

Foruden stigningen i privatforbruget, er turismen også medvirkende til, at butikkerne har høj omsætning. En analyse fra BNP Paribas i

THE RETAIL MARKET THE RETAIL INDUSTRY IS CHANGING Private consumption in Denmark has been increasing over the last few years. More equity and less unemployment make the Danes spend more money. This development is generally positive for all sectors in the Danish retail industry. However, it is also clear to see that the larger cities benefit the most from this development, because these are the areas in which the employment rates are increasing, and the equity is at the highest.

The increasing online trade is still a challenge for the classic, physical stores and shops. However, many stores have now seen and exploited the possibilities of complementing online trade and improving the shopping experience for customers visiting

the physical stores by providing great services, the same prices in the store as well as online and loyalty clubs with special offers exclusively for club members.

It looks like the investors have noticed the tendency as well. Thus, significant investments were made in 2017, into shopping centres and shop portfolios, where the interest has been particularly noticeable. The investments are made in an effort to try and develop and improve shopping malls, so that the consumers may have a larger and different experience when they go to the actual store rather than buying their goods online.

for the retail industry. An analysis made by BNP Paribas in November showed how Amagertorv and Østergade in Copenhagen are in fourth and fifth place, respectively, among the most popular shopping streets in Europe. Measuring the footfall, the two streets, collectively also known as Strøget, were only surpassed by streets in London, Paris, and Barcelona. In particular many exclusive luxury brands within interior design, clothing, and shoes as well as watches and jewellery, are located in the beautiful, old houses on Strøget, and the combination of sightseeing and shopping in central Copenhagen is a unique experience for many tourists.

Apart from the rise in private consumption, tourism also contributes to a high turnover 33 THE DANISH PROPERTY MARKET 2018

Stor efterspørgsel på detailejendomme i København og omegn Tomgangen i København by er på 3,6%, hvilket er lavt sammenlignet med tomgangen på landsplan, der er på 5,4%. I Københavns omegn er tomgangen helt nede på 2,9%, som er endnu lavere end både København by og landsgennemsnittet, hvilket signalerer et godt marked i og omkring København.

For primære strøgejendomme, hvor beliggenheden er særdeles attraktiv, er forrentningskravet 3,5%, endda i få tilfælde lavere, mens det i de sekundære områder er i niveauet 5,5 - 6,0%. Lejeniveauet for de mest attraktive

detailkvadratmeter i Københavns centrum er på 18.000 - 22.500 kr. pr. kvadratmeter. Sekundære beliggenheder ligger på omkring 10.000 kr. pr. kvadratmeter.

TOMGANGEN FALDER FORTSAT I JYLLAND I de populære regioner i Jylland er tomgangen ligeledes lav. Tomgangen i Østjylland har i 2017 ligget meget stabilt i niveauet 5,3% 5,6%, og vores forventninger til udviklingen i 2018 er lidt faldende tomgang.

Centralt i Aarhus ses der også eksempler på transaktioner med forrentningskrav helt nede på 4,0%. Markedslejen for de primære

ejendomme i regionen ligger på 6.000 7.500 kr. pr. kvadratmeter. For sekundære beliggenheder er forrentningskravet mellem 5,3 - 5,75%, og lejen mellem 3.000 - 6.000 kr. pr. kvadratmeter.

I Trekantområdet ligger afkast og markedsleje for de bedste placeringer på 4,8%, en middel placering på 7,0% og en placering under middel på over 8,0%. Gennem de senere år har der ikke været de store ændringer i toplejeniveauerne, som stadig ligger i niveauet 3.000 kr. pr. kvadratmeter, mens middelniveauet ligger på 1.600 kr. pr. kvadratmeter, og under middel ligger på 800 kr. pr. kvadratmeter.

TABEL 7.1: SIGNIFIKANTE INVESTERINGER TABLE 7.1: KEY INVESTMENT Sælger

Køber

Projekt

Primær anvendelse

Område

Volume i mio

Areal i antal m2 400.000,00

Danica

ATP

Shopping centres

Detailhandel

Flere steder

6.900,00

Aberdeen Standard

Aachener Grundvermögen

Primær ejendom Købmagergade

Detailhandel

København

565

5.996

Dansk Supermarked

Blackrock

Næstved Storcenter

Detailhandel

Næstved

978

41.000

Private Investorer

JYSK

Graham Bells Vej

Detailhandel

Aarhus

144

8.465

Great demand for properties suited for retail businesses in Copenhagen and the grater Copenhagen area The vacancy in Copenhagen city is at 3.6%, which is significantly lower compared to the nationwide vacancy of 5.4%. In the greater Copenhagen area, the vacancy is 2.9%, which is higher than in the city itself but lower compared to the nationwide vacancy percentage.

This is a sign of a good potential market in and around Copenhagen.

For primary properties along Strøget, where the location is particularly attractive, the required rate of return is 3.5%, in some cases even lower, while the level for the secondary areas is around 5.5 to 6%.

The rent level for the most attractive square meters suited for retail use is at DKK 18 000 to 22 500 per square meter. Secondary loca-

34 DET DANSKE EJENDOMSMARKED 2018

tions are around DKK 10 000 per square meter.

THE VACANCY CONTINUES TO DROP IN JUTLAND In the popular regions of Jutland, vacancy is low as well. The vacancy in East Jutland has been at a stable level of 5.3 to 5.6% in 2017, and we expect the vacancy to drop even a little further in 2018.

In central Aarhus we see examples of transactions with a required rate for return as low as 4.0%. The market rent for the primary properties in the region is around DKK 6 000 – 7 500 per square meter. For secondary locations the required rate for return is between 5.3 and 5.75%, and the rent is between DKK 3 000 and 6 000 per square meter.

In the ”triangular area” (Trekantområdet) between Vejle, Fredericia and Kolding, re-

turn and market rent for the best locations is at 4.8%, a secondary location at 7.0% and a location below medium is over 8.0%. During the last few years the levels for top rents has not changed much, so that the level is around DKK 3 000 per square meter, while the medium level is at DKK 1600 per square meter and below medium is at DKK 800 per square meter.

FIGUR 7.1: DETAILTOMGANG I PROCENT

FIGUR 7.1: DETAILTOMGANG I PROCENT FIGURE VACANCY FOR RETAIL PROPERTIES IN PERCENT FIGURE 7.1:7.1: VACANCY RATERATE FOR RETAIL PROPERTIES IN PER CENT % 8 7 6 5 4 3 2 1 0

Q1

Q2

Q3

Q4

Q1

Q2

2012

Q3

Q4

Q1

Q2

2013

Hele landet

Københanvs by

Hele landet

Q3

Q1

Q2

Q3

Q4

Q1

2015

Københavns omegn

København by

Kilde: Ejendomstorvet / Source: Kilde/Source: Ejendomstorvet

Q4

2014

Q2

Q3

Q4

Q1

2016

Nordsjælland

Københavns omegn

Q2

Q3

Q4

2017

Fyn

Q1

Q2

2018

Østjylland

Nordsjælland

Fyn

Østjylland

Ejendomstorvet

FIGUR 7.2: FORRENTNINGSKRAV PÅ PRIMÆRE DETAIL EJENDOMME I PROCENT

FIGUR 7.2: FORRENTNINGSKRAV PÅ PRIMÆRE DETAIL EJENDOMME I PROCENT FIGURE 7.2: YIELD FOR PRIMARY RETAIL PROPERTIES FIGURE 7.2: YIELD FOR PRIMARY RETAIL PROPERTIES IN PER CENTIN PERCENT % 10 9 8 7 6 5 4 3 2 1 0

Q1

Q2

Q3

Q4

Q1

Q2

2012

Aarhus

Q3

Q4

Q1

2013

Q2

Q3

Q4

Q1

2014

Q2

Q3

Q4

Q1

2015

Q2

Q3

Q4

Q1

2016

Q2

Q3

Q4

2017

Q1

Q2

2018

Københanv / Copenhagen København/Copenhagen Trekantsområdet / Triangle Area Aarhus Trekantsområdet/Triangle Area

Kilde / Source: Newsec Advisory A/S

Kilde: Newsec Advisory / Source: Newsec Advisory

FIGUR 7.3: LEJENIVEAUER PÅ PRIMÆRE DETAILEJENDOMME I DKK

FIGUR 7.3: LEJENIVEAUER PÅ PRIMÆRE DETAILEJENDOMME I DKK FIGURE 7.3: RENTAL LEVELS FOR PRIMARY RETAIL IN PROPERTIES IN DKK FIGURE 7.3: RENTAL LEVELS FOR PRIMARY RETAIL PROPERTIES DKK DKK 25.000

20.000

15.000

10.000

5.000

0

Q1

Q2

Q3

2012

Aarhus

Q4

Q1

Q2

Q3

Q4

2013

Københanv / Copenhagen

Aarhus

Kilde / Source: Newsec Advisory/A/S Kilde: Newsec Advisory Source:

Q1

Q2

Q3

Q4

Q1

2014

Trekantsområdet København/Copenhagen

Q2

Q3

2015

Q4

Q1

Q2

Q3

Q4

2016

Q1

Q2

Q3

2017

Q4

Q1

Q2

2018

/ Triangle Area Trekantsområdet/Triangle Area

Newsec Advisory

35 THE DANISH PROPERTY MARKET 2018

36â&#x20AC;&#x192; DET DANSKE EJENDOMSMARKED 2018

37â&#x20AC;&#x192; THE DANISH PROPERTY MARKET 2018

BOLIGMARKEDET DE STORE BYER VOKSER OG LÆGGER PRES PÅ PRISERNE OG UDLEJNINGSBOLIGERNE Boligsegmentet fortsatte som værende det klart mest dominerende marked i 2017 med 45% af den samlede transaktionsvolumen, hvilket vil sige, at der blev handlet for cirka 40 milliarder kr. boligejendomme i det forgangne år. Den høje aktivitet og efterspørgsel, især efter primære ejendomme i København, har hævet priserne og sænket afkastkravene for investorerne. De mange udenlandske investorer har især været med til at presse udbuddet af core ejendomme i hovedstaden ned. Der har derfor været flere eksempler på salg af store porteføljer med boligejendomme, der er blevet handlet til et afkast omkring 3,5-3,8%, hvilket er relativt lavt.

Ejerlejlighedspriserne er steget markant i 2017 i de store byer. For Aarhus og København har der været en prisstigning på henholdsvis 40% og 60% fra 2012-2017. De gennemsnitlige kvadratmeterpriser i København er på 37.500 kr./m2 og Aarhus på 30.500 kr./ m2. Salgstiderne er også blevet forkortet siden 2012 fra 122 dage i tredje kvartal 2012 til 61 dage i tredje kvartal 2017 for ejerlejligheder i København, hvilket er en halvering. For Aarhus er salgstiden mere end halveret fra 160 dage til 64 dage i samme periode.

København oplever et stort pres på boligmarkedet, da befolkningen vokser kontinuerligt med +10.000 indbyggere årligt, hvilket også er forventningen til de næste 10-15 år. Det er befolkningsgrupper i alle aldre, der vælger at flytte til hovedstaden. I Aarhus ses der også

en stor befolkningstilvækst, dog i et mindre tempo end i København. Aarhus har fremskrevet befolkningen med 14% frem mod 2026, mens tallet for København er 17% frem til 2026.

Det er stort set på tværs af alle aldersgrupper, at folk vælger at flytte til de store byer.

Pensionister og ældre mennesker foretrækker at bo i byen, hvor de er tæt på kultur og oplevelser samt gode transportmuligheder.

Der kommer et stigende antal studerende til København på grund det store optag på universiteter og videregående uddannelser, der giver stor efterspørgsel efter billige boliger.

Nogle børnefamilier vælger også at blive boende i byen på grund af det netværk, som de har opbygget gennem deres studietid og fordelene ved at bo tæt på arbejdspladsen. Der

THE RESIDENTIAL MARKET THE LARGE CITIES ARE GROWING AND PUTTING RENTALS AND PRICES UNDER PRESSURE

quired rate of return of just 3.5-3.8%, which is relatively low.

The housing segment continues to be the dominating market in 2017 with 45% of the total transactional volume, which is to say that around DKK 40 billion worth of property trading took place in Denmark last year. The high volume of activity and the high demand, especially for properties in Copenhagen, has made prices go up and lowered the required return rates for the investors. The many foreign investors in particular have contributed to the increased pressure on the supply of core properties in the capital. We have seen examples of sales of large portfolios with housing properties being traded with a re-

The prices of condominiums have risen significantly in the large cities. In Aarhus and Copenhagen, the prices have gone up by 40 and 60 percent, respectively, from 2012 to 2017.

The average prices per square meter are DKK 37 500 /m2 in Copenhagen and DKK 30 500 /m2 in Aarhus. The average time it took to complete a sale of a condominium in Copenhagen has gone down from 122 days in the third quarter of 2012 to 61 days in the third quarter of 2017. For Aarhus, the time has been lowered to less than half of the time it took in 2012. The average went from 160 days to only 64 days.

38 DET DANSKE EJENDOMSMARKED 2018

Copenhagen is experiencing a great pressure on the housing market. The population grows, and ten thousand new citizens are added each year, and the de development is expected to continue over the next 10 to 15 years. People of all ages are moving to the capital area. Aarhus sees a growth in population as well, but at a slower pace compared to Copenhagen. The population of Aarhus is predicted to grow by 14% before 2026, and the growth in Copenhagen is estimated to reach 17%.

People from virtually all age groups are moving to the large cities. Senior citizens and elderly people prefer to live in the city, close to cultural institutions and with good public

FIGUR 8.1: KVADRATMETER PRISER FOR EJERLEJLIGHEDER

FIGUR 8.1: KVADRATMETER PRISER FOR EJERLEJLIGHEDER FIGURE 8.1: SQUARE METER FOR APARTMENTS FIGURE 8.1: SQUARE METER PRICESPRICES FOR APARTMENTS DKK 45.000 40.000 35.000 30.000 25.000 20.000 15.000 10.000 5.000 0

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2000

Danmark

2001

2002

2003

2004

2005

Danmark København / Copenhagen

2006

2007

2008

København/Copenhagen Trekantsområdet

2009

2010

2011

2012

2013

2014

2015

2016

Trekantsområdet/Triangle Area / Triangle Area

Kilde / Source: Realkreditrådet

Kilde: Realkreditrådet / Source: Realkreditrådet

FIGUR 8.2: PROCENTVISE ÆNDRING IFT ÅRET FØR I ANTAL BEBOERE FORDELT PÅ BOLIGTYPE FIGUR 8.2: PROCENTVISE ÆNDRING IFT ÅRET FØR I ANTAL BEBOERE FORDELT PÅ BOLIGTYPE FIGURE 8.2: PERCENTAGE CHANGE IN NUMBER OF RESIDENTS BYTYPE PROPERTY TYPE FIGURE 8.2: PERCENTAGE CHANGE IN NUMBER OF RESIDENTS

BY PROPERTY 6%

5%

4%

3%

2%

1%

0%

-1%

2011

2012

2013

Kilde / Source: & Lindquist Beboet af Newsec lejer Egeskov Beboet af ejer

Kilde / Source: Danmarks Statistik & Newsec Advisory A/S

2014

Beboet af lejer

2015

2016

Beboet af ejer

Kilde: Danmarks Statistik & Newsec Advisory A/S / Source: Danmarks Statistik & Newsec Advisory

2017

2017

er dog også børnefamilier, som vælger at udnytte en eventuel gevinst i deres ejerlejlighed efter de store prisstigninger og flytte ud af København, hvor de får flere kvadratmeter for pengene. Realkreditinstitutter og banker er blevet mere opmærksomme på, at låntagere skal have en større egenfinansiering af deres boligkøb, og at husstanden maksimalt må have en gældsfaktor på 3,5 i forhold til indkomsten.

Dette har medvirket til, at studerende og en stor gruppe af førstegangskøbere ikke har råd til eller mulighed for at låne til ejerlejligheder til de førnævnte høje kvadratmeterpriser. Det sætter et yderligere pres på boligudlejningsejendomme, hvor denne gruppe af

boligsøgende ikke skal tænke på egenfinansiering. For mange boligudlejningsejendomme meldes der om lange ventelister, især i København, hvor der for nogle områder er ventetider på helt op til flere årtier. Udlejere har herved nemt ved at finde lejere til deres boliger, hvilket skaber rigtig gode rammer for et relativt sikkert og stabilt cash flow for investorer af boligudlejningsejendomme.

UDVIKLINGSPROJEKTER I BÅDE KØBENHAVN OG AARHUS For at imødekomme denne efterspørgsel i fremtiden, er der, blandt både investorer og udviklere, igangsat en række boligudviklingsprojekter rundt omkring i landet, der sætter rekord for byggeaktiviteten i Danmark. I Kø-

benhavn er Nordhavnen for alvor ved at blive fyldt ud med boligejendomme, og i Carlsberg Byen er det gamle industrikvarter transformeret til et attraktivt boligmiljø tæt ved Københavns centrum.

Omkring havnen i Aarhus bliver der bygget et stort antal ejer- og lejelejligheder, hvor også nye bydele bliver til. I Ceres Byen er der planlagt 140.000 kvadratmeter bebyggelse til primært beboelse, men også til kontor, detail og undervisning. I Bindesbøll Byen bliver der bygget 110.000 kvadratmeter fordelt på 1.200 boliger i primært 2-3 etager.

TABEL 8.1: SIGNIFIKANTE INVESTERINGER TABLE 8.1: KEY INVESTMENTS Sælger Seller

Køber Buyer

Projekt Project

Primær anvendelse Primary use

Område Area

Volume i mio Volume in mio

Areal i antal m2 Area in sq. m

FB Group

Heimstaden

Tre etageejendomme

Bolig

København

1.200

34.000

AP Pension

Heimstaden

Nyopførte etageejendomme

Bolig

København

900

N/A

Private

PKA & A. Enggaard

Boligudviklingsprojekt

Bolig

Aarhus

700

34.000

Pensam

Heimstaden

Scherfigs Have

Bolig

København

680

12.800

2E Group

Privat Investor

Boligprojekter

Bolig

Storkøbenhavn

430

N/A

Capman

Akelius

128 Lejligheder

Bolig

KØbenhavn

370

25.064

Keystone

Heimstaden

Nyopførte etageejendomme

Bolig

Valby

340

9.500

RHB Development

Heimstaden

Horsens Havn

Bolig

Horsen

260

10.300

Private

Heimstaden

Lejligheder

Bolig

København

191

7.400

TK Development

Wagner Ejendomme

Udviklingsprojekt

Bolig

Aalborg

161

61.000

Kilde: Newsec Advisory A/S / Source: Newsec Advisory A/S

40 DET DANSKE EJENDOMSMARKED 2018

transport. An everincreasing number of students come to Copenhagen because of the large number of students being admitted at the university and other higher education institutions. This creates a huge demand for affordable housing. Some families with children also choose to stay in the city because of the support from the network that they have established while studying and because of the proximity to many workplaces. Some families, however, make use of a profit from selling their apartment in order to be able to afford more space outside Copenhagen, where more square meters can be acquired for the same amount of money.

Thus, students and a large group of otherwise potential first time buyers cannot afford to buy or to borrow enough in order to buy properties at a level of the aforementioned prices. This puts even more pressure on rental properties, where this group of housing seekers does not have to think about mortgage requirements. Many rental properties have long waiting lists, especially in Copenhagen, where some areas have waiting lists of up to several decades. Landlords have no difficulties in finding new tenants for their apartments. This creates a great framework for a relatively secure and safe cash flow for investors who work with rental properties.

Mortgage institutes and banks have become more aware and are more concerned with the loan takers financing a larger part of the property purchase themselves and that the household may have a debt factor of only up to 3.5 in relation to the income.

DEVELOPMENT PROJECTS IN COPENHAGEN AND AARHUS

activities in Denmark. In Copenhagen, the North Harbour (Nordhavnen) has really started to hold many new housing projects, and in Carlsberg Byen the old industrial area has been transformed into an attractive, urban housing area close to the city centre.

Around the harbour in Aarhus a large number of rental properties and condominiums are being built. New areas of the town are being created. At Ceres Byen 140 000 square meters of buildings are projected, primarily for private housing but also for offices, retail and for educational purposes. At Bindesbøll Byen 110 000 square meters are being built, in the shape of 1200 apartments, most of them in a height of 2 or 3 stories.

In order to accommodate this demand in the future, a range of housing property development projects have been started all over the country. This sets a new record for building 41â&#x20AC;&#x192; THE DANISH PROPERTY MARKET 2017

DE NORDISKE MARKEDER Sverige og Norge har oplevet højere ejendomspriser og transaktionsvolumen siden 2014. I første kvartal af 2018 er der dog sket et fald på mellem 40-50 % for transaktionsvolumen sammenlignet med samme periode sidste år. Faldet skyldes delvist reguleringer ved belåning til ejendomme samt konjunkturændringer.

SVERIGE: Den svenske økonomi oplevede stærk fremgang i 2017, og Newsec anslår, at Sveriges BNP-vækst var på 3%. Den svenske Riksbanks første rentestigning forventes at ske i løbet af efteråret 2018, og renten forventes at nå 0,25% ultimo 2018. Den samlede transaktionsvolumen i 2017, på det svenske ejendomsmarked, udgjorde 147,5 milliarder kroner over 498 transaktioner. Årets volumen er 26% lavere end 2016’s rekordvolumen på 201 milliarder svenske kroner, men er på niveau med transaktionsmængden i 2015. Stockholm er, med 37% af transaktionsvolumen, det største geografiske segment. Andre stør-

re byer og resten af landet tegner sig for henholdsvis 24 og 20%. Sidste år havde Göteborg en markedsandel på 7%, som var lavere end Malmø, men i år blev styrken genvundet, og Göteborg tegnede sig for 12% af årets volumen. Newsec estimerer, at transaktionsvolumen i 2018 vil udgøre 150 milliarder svenske kroner.

KONTORSEGMENTET ER IKKE LÆNGERE DET STØRSTE Kontorsegmentet har i løbet af året mistet markedsandele, og segmentet tegnede sig ved årsskiftet for kun 18% af volumen, hvilket

er det laveste, der nogensinde er registreret af Newsec. Segmentets andel i 2016 var på 30%, og det tidligere laveste niveau var på 26%. I 2017 udgjorde boligejendomssegmentet den største omsætning med 26% af volumen. Efterspørgslen efter kontorejendomme er dog stadig stor, lejepriserne stiger, og tomgangen i Stockholm Central Business District (CBD) er 2%. ØGET BYGGERI HAR INGEN EFFEKT PÅ BOLIGMANGLEN Byggeriet er steget betydeligt, og der er et stort udbud af nybyggede boliger. På trods

THE NORDIC MARKETS Sweden and Norway have experienced higher real estate prices and transaction volume since 2014. However, in the first quarter of 2018, transaction volumes have decreased compared with the same period last year. The decrease is due partly to adjustments on loans to property and changes in the economic cycle.

SWEDEN: The Swedish economy experienced strong development in 2017 and Newsec estimates that Sweden’s GDP growth was 3%. The Swedish Riksbank’s first interestrate rise is expected to occur during the autumn of 2018 and the rate is predicted to reach -0,25% by the end of 2018. The total transaction volume in 2017 on the Swedish property market amounted to SEK 147.5 billion over 498 transactions. The volume for the year is 26% lower than 2016’s record volume of SEK 201 billion, but is at a similar level as the transaction volume in 2015. With 37% of the transaction volume Stockholm is the largest geographical segment. Other major cities and the rest of 42 DET DANSKE EJENDOMSMARKED 2018

the country accounted for 24 and 20% respectively. Last year Gothenburg had a 7% market share, which was lower than Malmö, but this year it recovered and accounted for 12% of the year’s volume. Newsec estimates that the transaction volume in 2018 will amount to SEK 150 billion.

and the previous lowest level was 26%. With 26% of the volume in 2017, residential properties were the segment with the highest turnover. However, the demand for office properties is still large, rents are increasing and in Stockholm Central Business District (CBD) the vacancy rate is 2%.

THE OFFICE SEGMENT IS NO LONGER THE LARGEST

INCREASED CONSTRUCTION BUT NO EFFECT ON THE HOUSING SHORTAGE

Throughout the year, the office segment lost market share and at year end the segment accounted for only 18% of the volume, which is the lowest figure ever recorded by Newsec.

The segment’s share last year stood at 30%

Construction has increased significantly and there is a large supply of newly constructed residential properties. However, the shortage of housing is not diminishing as a large number of the newly produced apartments are

heraf, er boligmanglen ikke mindsket, idet et stort antal af de nyoprettede lejligheder er bygget i et for dyrt markedssegment. Dette har ført til, at mange lejligheder ikke sælges eller ikke tillades solgt til den efterspurgte pris, da de er udbudt for dyrt for langt størstedelen af befolkningen.

STIGENDE INTERESSE FRA UDENLANDSKE INVESTORER Sidste år blev der gennemført tre transaktioner med et prisniveau på over 2 milliarder svenske kroner. Den største transaktion i 2017 var D. Carnegie Co’s køb af 27 boliger i Stockholm fra Akelius med en transaktionsvolumen i omegnen af 2,5 milliarder svenske kroner.

built in a too expensive market segment. This has led to many apartments not being sold or let at the asking price, as they are too expensive for the vast majority of the population.

INCREASING INTEREST FROM INTERNATIONAL CAPITAL Last year, three transactions with a price level above SEK 2 billion were completed. The largest transaction in 2017 was D. Carnegie Co’s purchase of 27 residential properties in Stockholm from Akelius at a transaction volume of approximately SEK 2.5 billion. Furthermore, two American companies were responsible for the second largest transaction

Endvidere var to amerikanske virksomheder ansvarlige for den næststørste transaktion i løbet af året. Starwood Capital solgte indkøbscentret Bromma Blocks til CBRE Global Investors til en transaktionspris på cirka 2,2 milliarder svenske kroner. Desuden erhvervede China Investment Corporation ni logistikejendomme fra Blackstone & Areim i oktober.

Udenlandske investorer tegnede sig for 23% af årets transaktionsvolumen.

E-HANDEL OG DETS EFFEKT PÅ DETAILEJENDOMME

2016. En stor hindring for fortsat stor interesse for detailejendomme er væksten i e-handlen. Internethandlen fortsætter med at avancere og er vokset med en tilsvarende stabil sats fra år til år, hvilket lægger pres på detailejendomme. Ikke desto mindre blev det for nylig meddelt, at den japanske tøjhandler Uniqlo vil leje 1.580 kvadratmeter detailhandel fra Vasakronan i Stockholm. En voksende tendens er imidlertid, at store detailaktører ikke udvider deres butikker for at øge massesalget, men snarere at øge deres synlighed og forbedre kundeoplevelsen.

I løbet af året udgjorde detailejendomme 18% af transaktionsvolumen, hvilket svarer til, hvad segmentet tegnede sig for i 2015 og

during the year. Starwood Capital sold the shopping center Bromma Blocks to CBRE Global Investors at a transaction price of approximately SEK 2.2 billion. In addition, China Investment Corporation acquired nine logistics properties from Blackstone & Areim in October. Foreign investors accounted for 23% of the year’s transaction volume.

E-COMMERCE AND ITS EFFECT ON RETAIL PROPERTIES During the year, retail properties accounted for 18% of the transaction volume, which amounts to a similar level to what the segment accounted for in 2015 and 2016. One

major obstacle to a continuing high interest in retail properties is the growth of e-commerce. E-commerce continues to advance and has been growing at a similar stable rate from year-to-year, which puts pressure on retail properties. Nevertheless, it was recently announced that the Japanese clothing retailer Uniqlo will lease 1,580 sqm of retail space from Vasakronan in Stockholm. However, a growing trend is that large retail actors are not expanding their stores in order to increase mass sales, but rather to increase their visibility and enhance the customer experience.

43 THE DANISH PROPERTY MARKET 2018

46â&#x20AC;&#x192; DET DANSKE EJENDOMSMARKED 2018

NORGE Et godt grundlag for ejendomsinvesteringer kombineret med gunstige økonomiske forhold resulterede i endnu et enestående transaktionsår for det norske ejendomsmarked. I 4. kvartal registrerede Newsec 90 transaktioner, der beløb sig til 28 milliarder norkse kroner. I alt udgjorde transaktionsvolumen på det norske ejendomsmarked 88 milliarder norske kroner med et rekordhøjt antal på 340 transaktioner i 2017. Volumen for 2017 er 10 milliarder kroner højere end for 2016. Kontorsegmentet dominerede markedet med 43 milliarder norske kroner, svarende til 50% af den samlede transaktionsvolumen. Logistikog industriejendomme bliver stadigt mere attraktive, da investorer bevæger sig væk fra andre segmenter, hvilket resulterer i rekordhøj prisfastsættelse for industri- og logistiksegmentet. Geografisk set tegner Oslo sig for 50% af den samlede volumen i 2017, og sekundære markeder som Trondheim og Stavanger har haft en markant stigning i transaktionshastigheden. Udenlandske investeringer var også en væsentlig bidragsyder til aktiviteten i 2017, hvoraf 20% af transakti-

onsvolumen kom fra udenlandske investorer, en stigning fra 11% i 2016, men under 2015 tal på 33%. Efterspørgslen efter ejendomme med lange lejekontrakter har været høj de seneste seks måneder, og som følge heraf bliver de prissat ekstremt højt. Dette er mest tydeligt på logistik- og industrimarkedet, hvor lejekontrakter med en varighed på over 10 år giver lige over 4%.

På grund af usikkerhed om nye finansielle reguleringer, kræver livsforsikringsselskaber sikkerhedsstillelse for ejendommen ved udlån til kommercielle ejendomme. Afhængigt af resultatet af de finansielle begrænsninger, kan markedet miste noget af dets likviditet.

For eksempel vil Arctic Securities’ erhvervelse af Storebrand HQ, som blev finansieret af Storebrand Livsforsikring, måske vise sig ikke at være så lukrativ i fremtiden på grund af disse regler.

af 2017. 5-årige og 10-årige SWAP’er handles omkring henholdsvis 1,5% og 2%, mens 3 måneders NIBOR handles til historisk lave 0,85%. Newsec forventer, at renterne vil forblive på de nuværende niveauer gennem hele 2018, før de stiger igen.

BOLIGMARKEDETS UDVIKLING De seneste sæsonkorrigerede tal viser et registreret boligsalg på samme niveau i 2017 som i 2016 med 86.600 solgte enheder. December 2017 blev den 8. måned med fortsat fald i boligpriserne. Boligpriserne på nationalt plan er faldet 2,1% i forhold til året før i december, og priserne i Oslo faldt 6,2% i samme tidsperiode. Selv om boligmarkedet har været i tilbagegang i 2017, var boligudviklingen begivenhedsrig med 30.700 nye boliger under udvikling i 2017, hvilket dog er et fald på 2% fra 2016. Imidlertid er det historisk set et stort antal.

RENTEUDVIKLING Korte og langsigtede SWAP-satser er langsomt stigende efter at være faldet det meste

NORWAY: Property fundamentals coupled with favorable economic conditions resulted in another outstanding transaction year for the Norwegian property market. In the 4th quarter, Newsec registered 90 transactions amounting to NOK 28 billion. In the year in total, the transaction volume on the Norwegian property market amounted to NOK 88 billion with a record high of 340 transactions. The volume for 2017 is approximately NOK 10 billion higher than the corresponding figure for 2016. With a total volume of roughly NOK 43 billion, or 50% of the total transaction volume, the office segment dominated the market. Logistics and industrial properties are becoming increasingly attractive as investors are eliminated from other segments, resulting in recordhigh pricing for the aforementioned segments. Geographically speaking, Oslo accounted for 50% of the total volume in 2017 and secondary markets such as Trondheim and Stavanger enjoyed a notable surge in transaction velocity. Foreign investment was also a significant contributor to activity during 2017, with 20% coming of the transaction volume coming from foreign in-

vestors, up from 11% in 2016, but below 2015 figures of 33%. The demand for properties with long lease contracts has been high over the past six months and as a result, they are priced extremely high. This is most evident in the logistics/industrial market space, in which lease contracts with a duration longer than 10 years are yielding just above 4 percent.

Due to uncertainty regarding new financial regulations, life insurance companies are requiring collateral on the property when lending against commercial properties. Depending on the outcome of the financial restraints, the market may lose some of its liquidity. For instance, Arctic Securities’ acquisition of Storebrand HQ, which was financed by Storebrand Life Insurance, may not have proven as lucrative in the future due to these regulations.

ing around 1.5% and 2% respectively while 3 month NIBOR is trading at a historically low 0.85%. Newsec expect interest rates to remain at current levels throughout 2018 before appreciating again.

RESIDENTIAL MARKET AND CONSTRUCTION ACTIVITY The latest seasonally adjusted numbers show recorded housing sales around the same level in 2017 as in 2016, with 86 600 units sold.

December 2017 became the 8th month of continuous decline in housing prices. Residential prices on the national level are down 2.1% on a year-on-year basis in December and prices in Oslo declined 6.2% in the same timeframe. Although the residential market suffered a decline in 2017, residential development proved eventful with 30,700 new housing units under development in 2017, which is a 2% decline from 2016. However, seen historically it is a high figure.

INTEREST RATES Short and longterm SWAP rates are slowly appreciating after declining for the majority of 2017. 5-year and 10-year SWAPs are trad-

47 THE DANISH PROPERTY MARKET 2017

FINLAND På grund af den stærke efterspørgsel efter eksportvarer og øget priskonkurrenceevne, er den finske økonomi i en stærk position.

Den økonomiske vækst forventes at fortsætte i løbet af 2018, og den robuste økonomi afspejles på ejendomsmarkedet. Transaktionsvolumen ramte en ny rekord i 2017 på 10,2 milliarder euro. Internationale investorer udgjorde næsten 70% af transaktionsvolumen, og kommercielle ejendomme udgjorde mere end 80% af den samlede volumen. Boligejendomme tegner sig kun for 10% af volumen, hvilket svarer til 1,05 milliarder euro. Det er således et signifikant fald i forhold til 2016, hvor boligejendomme tegnede sig for i omegnen af 38%. Da afkastkravene i mange universitetsbyer er relativt høje i forhold til niveauerne i Helsinki Metropolitan Area (HMA), blev ejendomme uden for HMA mere attraktive i 2017. Efter at have overvejet de forbedrede økonomiske udsigter, lave renter og Finlands attraktivitet som en investeringsmulighed i eurozonen, forudsiger Newsec, at 2018 vil være et aktivt investeringsår, og transaktionsvolumen anslås at nå op på 7-8 milliarder Euro.

STORE TRANSAKTIONER En forklarende faktor for rekordvolumen i 2017 var to store porteføljehandler: Blackstone’s overtagelse af Sponda (3,7 milliarder Euro) og den finske Logicor-portefølje (lidt under 1 milliard Euro), der blev erhvervet af CIC. I løbet af 2017 blev der lavet mere end ti ejendomsforretninger på over 150 millioner euro i Finland. Derudover blev der i anden halvdel af 2017 gennemført flere individuelle kontorbygningstransaktioner i HMA. En fond, der forvaltes af Deutsche Asset Management i Tyskland, overtog to kontorbygninger og en parkeringsplads (dele af Nokias tidligere hovedkontor) i Keilaniemi, Espoo. Transaktionsvolumen for ejendommen på 31.000 kvadratmeter udgjorde 164 millioner euro (5.290 Euro / kvadratmeter). Desuden købte CNP Assurances and Hines en ny kontorejendom i Helsinki CBD på Kasarmikatu 21.

FALDENDE AFKASTKRAV Afkastkravene for primære kontor- og detailejendomme faldt gennem 2017. Primære for-

rentnings%er til kontorbygninger i Helsinki ligger i øjeblikket på 3,7%. Derudover er afkastet faldet i sekundære områder, herunder eksempelvis Keilaniemidistriktet i Espoo. Den mest betydningsfulde transaktion på boligmarkedet var, da Barings Real Estate Advisers erhvervede syv boligejendomme, fra Varma Fælles Pensionsforsikringsselskab, med en samlet pris på 43 millioner euro. En anden stor ejendomstransaktion skete i oktober, da byggeselskabet SRV og Local Tapiola Asuntosijoitus Suomi Ky blev enige om opførelsen af cirka 300 lejeboliger (ca. 60 millioner euro) i byerne Espoo, Kerava og Åbo.

FORØGET BYGGEAKTIVITET Byggeaktiviteten fortsatte med at stige i Finland, især i vækstområder. I 2017 blev der bygget mere end 100.000 kvadratmeter nye detaillokaler og mere end 85.000 kvadratmeter nye kontorlokaler i HMA. Samlet set steg volumen for detail- og kontorproduktion med 3,8% på årsbasis. I samme periode steg volumen for boligbyggeri med 7,6%.

FINLAND Owing to strong demand for export goods and increased price competitiveness, the Finnish economy is in a strong position. Economic growth is forecast to continue throughout 2018 and the robust economy has been reflected in the real estate market. The transaction volume hit a new record in 2017, of EUR 10.2 billion. International investors accounted for almost 70% of the transaction volume and commercial properties comprised more than 80% of the total volume.

Residential properties only accounted for 10% of the volume (EUR 1.05 billion), which is a significant decrease compared to 2016 when residential properties accounted for approximately 38%. As yield levels in many university cities are relatively high compared to the levels in the Helsinki Metropolitan Area (HMA), properties located outside the HMA became more attractive during 2017. Having considered the improved economic outlook, low interest rates and the attractiveness of Finland as an investment opportunity in the eurozone, Newsec predicts that 2018 will be an active investment year, and the transaction volume is estimated to reach EUR 7–8 billion.

48 DET DANSKE EJENDOMSMARKED 2018

LARGE TRANSACTIONS One explanatory factor for the record volume in 2017 was two major portfolio deals: Blackstone’s acquisition of Sponda (EUR 3.7 billion) and the Finnish portfolio of Logicor (slightly below EUR 1 billion) being acquired by CIC. During 2017, more than ten property transactions exceeding a volume of EUR 150 million were made in Finland. In addition, during the second half of 2017 several individual office property transactions were completed in the HMA. A fund managed by Deutsche Asset Management in Germany acquired two office buildings and a parking facility (parts of Nokia’s former head office) in Keilaniemi, Espoo. The transaction volume for the 31,000 sqm property amounted to EUR 164 million (EUR 5,290 / sqm). Further, CNP Assurances and Hines acquired a new office property in Helsinki CBD at Kasarmikatu 21.

DECREASED YIELD LEVELS The yields for prime office and retail properties decreased during 2017. Prime yields for Helsinki CBD office properties are currently at a level of 3.7%. Moreover, the yield levels have decreased in prime office submarkets

such as the Keilaniemi district in Espoo. The most significant transaction on the residential property market was when Barings Real Estate Advisers acquired seven residential properties (housing 301 apartments) from Varma Mutual Pension Insurance Company, amounting to a transaction volume of EUR 43 million. Another major residential property transaction was made in October when the construction company SRV and Local Tapiola Asuntosijoitus Suomi Ky agreed on the construction of approximately 300 rental apartments (for approx. EUR 60 million) in the cities of Espoo, Kerava and Turku.

INCREASED CONSTRUCTION ACTIVITY Construction activity continued to increase in Finland, in growth areas in particular. In 2017, more than 100,000 sqm of new retail premises and more than 85,000 sqm of new office premises were constructed in the HMA. Overall, the volume of retail and office production increased by 3.8% on a year-on-year basis.

During the same period, the volume of residential property construction increased by 7.6%.

FIGUR 9.1: FORRENTNINGSKRAV FOR PRIMÆRE KONTOR EJENDOMME I NORDEN PERCENT

FIGUR 9.1: FORRENTNINGSKRAV FOR PRIMÆRE KONTOR EJENDOMME I NORDEN FIGURE 9.1: YIELD FOR PRIMARY RETAIL PROPERTIES IN FIGURE 9.1: YIELD FOR PRIMARY RETAIL PROPERTIES IN PER CENT % 8

7

6

5

4

3

2

Q1

Q2

Q3

Q4

Q1

2012

Q2

Q3

Q4

Q1

2013

København / Copenhagen

Q2

Q3

Q4

Q1

Q2

2014

Q3

Q4

Q1

2015

Oslo Copenhagen / Oslo

Q2

Q3

Q4

Q1

Q2

2016

Q3

Q4

Q1

2017

Q2

2018

Stockholm /Stockholm Stockholm Oslo

Kilde / Source: Newsec Advisory A/S

Kilde: Newsec Advisory / Source: Newsec Advisory

FIGUR 9.2: FORRENTNINGSKRAV FOR PRIMÆRE FIGUR 9.1: FORRENTNINGSKRAV FOR PRIMÆRE KONTOR EJENDOMMERETAIL I NORDEN EJENDOMME FIGURE 9.1: YIELD PRIMARY PROPERTIES IN PER CENT FIGURE 9.2:FOR YIELD FORRETAIL PRIMARY RETAIL PROPERTIES IN PERCENT

I NORDEN

% 8

7

6

5

4

3

2

Q1

Q2

Q3

Q4

Q1

2012

Q2

Q3

Q4

Q1

2013

København / Copenhagen

Q2

Q3

Q4

Q1

Q2

2014

Q3

Q4

Q1

Q2

2015

Q3

Q4

Q1

2016

Q2

Q3

Q4

Q1

2017

Q2

2018

Oslo /Copenhagen Oslo Stockholm /Stockholm Stockholm Oslo

Kilde / Source: Newsec Advisory A/S

Kilde: Newsec Advisory / Source: Newsec Advisory

FIGUR 9.3: FORRENTNINGSKRAV FOR PRIMÆRE INDUSTREJENDOMME I NORDEN IN PERCENT

FIGUR 9.3: FORRENTNINGSKRAV FOR PRIMÆRE INDUSTREJENDOMME I NORDEN FIGURE 9.3: YIELD PRIMARY PROPERTIES IN PER CENT FIGURE 9.3:FOR YIELD FORINDUSTRIAL PRIMARY INDUSTRIAL PROPERTIES % 8

7

6

5

4

3

2

Q1

Q2

Q3

Q4

Q1

2012

Q2

Q3

Q4

Q1

2013

København / Copenhagen

Q2

Q3

Q4

Q1

Q2

2014

Q3

Q4

Q1

Q2

2015

Q3

Q4

Q1

2016

Q2

Q3

Q4

Q1

2017

Q2

2018

Oslo Oslo /Copenhagen Oslo Stockholm /Stockholm Stockholm

Kilde / Source: Newsec Advisory A/S

Kilde: Newsec Advisory / Source: Newsec Advisory FIGUR 9.4: NORDISK TRANSAKTIONSVOLUME I DKK MIA. FIGURE THE NORDIC TRANSACTION VOLUME IN DKK BILLION FIGUR9.4: 9.4: NORDISK TRANSAKTIONSVOLUME I DKK

MIA. FIGURE 9.4: THE NORDIC TRANSACTION VOLUME IN DKK BILLION

DKK mia / DKK bn 400 350 300 250 200 150 100 50

0 Danmark/Denmark Sverige/Sweden Kilde / Source: Newsec Egeskov & Lindquist

2008

2008

2009

2009

2010

Kilde / Source: Newsec Advisory A/S

2015

2016

2017

2010

2011

Norge/Norway

2011

2012

2012

2013

2013

2014

2014

Finland

2015

2016

Total

2017

2018

2018*

Kilde: Newsec Advisory / Source: Newsec Advisory

*Estimeret / estimated

49 THE DANISH PROPERTY MARKET 2017

50â&#x20AC;&#x192; DET DANSKE EJENDOMSMARKED 2017

AN INTERNATIONAL APPENDIX

NEWSEC AN ALLIANCE MEMBER OF BNP PARIBAS

At a glance

Q4 2016

MAIN INVESTMENT MARKETS IN WESTERN EUROPE INVESTMENT MARKET

2016: CENTRAL PARIS IS THE #1 INVESTMENT MARKET IN EUROPE

The economic recovery continues in the Eurozone. Despite a slowdown at mid-year, GDP maintained a stable pace of growth in 2016 with 1.7% on average, notably thanks to investment expenditure and foreign trade that recovered during summer. Eurozone activity appears to have been neither buoyed nor punctured by recent geopolitical events. It should enjoy growth close to 1.5 % in 2017, a slight decline on 2016 due to political uncertainties at national level and some less favourable economic fundamentals (such as raw materials, inflation, oil prices and interest rates). Job creation increased emphatically in the Eurozone over the last year (+1.2%). The unemployment rate remains very high on average (9.8% of the labour force) yet keeps on contracting, suggesting The total real investment that the commercial pre-crisis level willestate be reached in early 2020.

New all-time record for investment

The Main 4 German markets totalled €23.4bn, 4% down on 2015. Only Berlin recorded a yearly decrease, after a historic high reached in 2015, whereas Munich, Frankfurt and Hamburg generated increases of 6%, 11% and 19% respectively. Although seeing continuous growth for the 7th year in a row, these three markets, conversely to Berlin, have not exceeded their 2007 peaks yet.

With €3 bn, Amsterdam underpinned by strong economic fundamentals EDINBURGH and boosted by GLASGOW the office investment volume recorded a 63% increase 931large 43shopping 5.35 centre deals set year-on-year.

Dublin, thanks to two very 916 32 5.35 a new record high with an investment volume at €3.6 bn. Luxembourg and Brussels both increased their 2015 figures, the latter soaring to a new high of almost €2 bn. Milan and Madrid after unprecedented figures reached in 2015, ended 2016 14% and 27% down respectively on 2015.

*** In the countries monitored in this report 52 DET DANSKE EJENDOMSMARKED 6 2018

BNP Paribas Real Estate ‐ Research ‐ February 2017

BNP Paribas Real Estate ‐ Research ‐ February 2017

BNP Paribas Real Estate ‐ Research ‐ February 2017

BNP Paribas Real Estate ‐ Research ‐ February 2017

volume in Europe reached €253bn*** in 2017, The total commercial real estate investment volume in Europe reached 10% above This compared is an all-time €230 bn in2016's 2016, result. a 10% drop to 2015. With €84 bn, the 14 Key interest rates posted new records in 2016. German 10-year bund record yearEuropean for the markets market, monitored exceedingin2015's Western this report posted the same 10% MANCHESTER DUBLIN turned negative in Q3 (-0.19%) and landed at 0.11% in Q4. This, combined annual drop. Investment may have high of €245bn.

This yearvolumes the market bene-slowed down over the last 49 4.85 1,731 47 high 4 volume of liquidity tightened1,769 with prime yields further. For offices, nine months but they remain 41% above the 10-year average of € 59.5bn. fited from all of real estate’s engines’ firing at prime yields stood at 3.95 % in Q4 2016 on average among the 14 markets analysed in this report, almost 40 bp down on Q4 2015. On €21.2 and only economy, a 5% drop compared theWith same time:bnimproving better oc- to 2015, Central Paris average, high-streetBIRMINGHAM retail prime yields reached 3.35% while logistics ranked the n°1 and European market in 2016. Central London cupational rates plentyinvestment of money. Upturn prime yields stood remained in line with its long-term average with a volume of €18.9 bn.

1,364 at 5.74% 50 in5.0Q4 2016.

AMSTERDAM in the European economy and the perfor5,186 65 3.7 Céline Cotasson-Fauvet mance of the occupier markets fostered real CENTRAL LONDON Investment volume (€ million) February 2017 estate’s appeal as an investment.

22,479 75 3.05 Office share of total With 43% of the volume invested, offices reinvestment volume Real estate investment volume—rolling yearwas chaReal estate average prime yields main the investor darling.

This year BRUSSELS Net Office Prime Yield (%) LILLE Western Europe (14 cities) Western Europe (14 cities) racterised by the sale of trophy assets such 1,773 84 758 37 4.5 Q4 2015 bn as €Cœur Défense in Paris, the Walkie-talkie Investment € bn Q3 2007 % €93bn Offi ce Retail * Industrial* €88bn and the Cheesegrater in London, also the Sony 93.0 (by city) 100 8 7.5 8.0 LUXEMBOURG 8 4.0 Center in Berlin.

10 1,128 90 4.75 7.0 2017’s 75 performance was led by German cities.

5 CENTRAL PARIS The total of the 4 leading German markets 2 6.0 17,720 88 3.05 5.7 4 puts 50them at the top overall. Almost half of 1 5.0 the volume were mega deals (>€100m), which 25 4.0 is a record. Central London is back to the first Investment € bn 3 .95 (by country) 3 .3 5 place0 of the European city ranking in 2017 3.0 with €16.8bn (+45%) invested in offices. Invesn > €20 n €5 - €20 07 08 09 10 11 12 13 14 15 Q4 2016 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 n €2 - €5 n < €2 tors' earlier concern about the Brexit vote * Except Luxembourg and Vienna GENEVA seems to have evaporated, since foreign in864 94 * Total investment vestors continued dominate the market.

In Slovakia (source RCA) Origin of foreign investment volume Real estate investmenttovolume LYON ** Source RCA Central Paris (14 is cities) back to the second place and Western Europe Western Europe (14 cities) 1,053 71 3.9 remained steady against 2016 (-1%). € bnyields continued their downward trend Office Q1 Q2 Q3 Q4 Europe Americ as Asia Middle East Other 100 10 -yr average : throughout Europe, reaching historic lows at 80% € 59bn TOULOUSE the end of 2017. Prime yields stood at 4.66% 470 51 5.4 60% in Q475 2017 on average among the 40 markets MARSEILLE analyzed in this report, 35 bps down on Q4 539 64 5.2 40% 50 Berlin’s prime office yield fell below the 2016.

3.0% mark, to hit 2.9%. This is the lowest of20% fice 25yield achieved in the European market.

Key to this development is the expectation BARCELONA 0% of further strong rental growth. This is 2,019 0 07 08 09 10 11 4212 3.75 13 14 15 16 MADRID 09 10(3.0%), 11 Paris 12 13 14 15 16 followed07 by 08Munich 4,154 36 3.25 (3.05%) and Madrid (3.25%). In the post Brexit vote reaction, London ofLISBON 1 fice yield rose marginally, but this 798 89 4.75 failed to gain traction and has since stabilized as the market activity improved.

HELSINKI

9,160

45

3.70 TALLINN

OSLO

2,840

86

141

3.75

39

6.5

STOCKHOLM

3,782

37

3.4

Commercial real estate investment volume

RIGA

106

32

in Europe

6.75

Office investment Other investment

(€/m²/ year )

Retail investment

250 VILNIUS

COPENHAGEN

1,988

100

224

4

48

6.5

200 150 100 50 0

HAMBURG

3,983

46

3.15

BERLIN

7,920

64

43

12

13

---- 2016 ----

WARSAW

959

11

5.15

14

15

16

---- 2017 ----

+10%

229,950*** 253,459***

2.9

17

Total investment (countries)

116,616

S

4.6

FRANKFURT

7,502

PRAGUE

75

3.15

2,111

50

3,875

3

72

Full year volumes increased significantly in 2017 with €253bn invested across Europe.Central London is back to square one of the office investment market with €16.8 bn invested, followed by Central Paris.

BRATISLAVA *

130

3.9

15

6.25

BUDAPEST

1,585

ZURICH

761

Total investment (cities)

4.85

VIENNA

MUNICH

5,200

48

45

+5%

123,028

43

6.5

2.7 BELGRADE

34

0

8.50

European Office prime yield vs 10-year Bund

MILAN

3,642

61

3.5 BUCHAREST

351

27

7.5

Office prime yield

(%)

10-year Bund

8 6 4 2 0

ROME

1,234

73

4.15

ATHENS

270

20

8

11

12

13

14

15

---- 2016 ----

---- 2017 ----

4.96

4.66

16

17

-30bp

Prime yield (%) Office prime yields continued their fall during 2017 recording new lows.

53 THE DANISH PROPERTY 7 MARKET 2018

At a glance

Q4 2016

MAIN INVESTMENT MARKETS IN WESTERN EUROPE OFFICES IN EUROPE

2016: CENTRAL PARIS IS THE #1 INVESTMENT MARKET IN EUROPE

The economic recovery continues in the Eurozone. Despite a slowdown at mid-year, GDP maintained a stable pace of growth in 2016 with 1.7% on average, notably thanks to investment expenditure and foreign trade that recovered during summer. Eurozone activity appears to have been neither buoyed nor punctured by recent geopolitical events. It should enjoy growth close to 1.5 % in 2017, a slight decline on 2016 due to political uncertainties at national level and some less favourable economic fundamentals (such as raw materials, inflation, oil prices and interest rates). Job creation increased emphatically in the Eurozone over the last year (+1.2%). The unemployment rate remains very high on average (9.8% of the labour force) yet keeps on contracting, suggesting Best volume in abedecade thattake-up the pre-crisis level will reached in early 2020.

European office market activity is at a ten year high

The Main 4 German markets totalled €23.4bn, 4% down on 2015. Only Berlin recorded a yearly decrease, after a historic high reached in 2015, whereas Munich, Frankfurt and Hamburg generated increases of 6%, 11% and 19% respectively. Although seeing continuous growth for the 7th year in a row, these three markets, conversely to Berlin, have not exceeded their 2007 peaks yet.

With €3 bn, Amsterdam underpinned by strong economic fundamentals EDINBURGH and boosted by GLASGOW the office investment volume recorded a 63% increase 93,898 403 centre deals set year-on-year. thanks to two very large8.8 shopping 46,155 Dublin, 11 378 a new record high with an investment volume at €3.6 bn. Luxembourg and Brussels both increased their 2015 figures, the latter soaring to a new high of almost €2 bn. Milan and Madrid after unprecedented figures reached in 2015, ended 2016 14% and 27% down respectively on 2015.

50

Vacancy contraction in Europe 25 pushing up prime rental values

1,000

2,348,264

500

5.0

250

4.0

6.5

850

BNP Paribas Real Estate ‐ Research ‐ February 2017

BNP Paribas Real Estate ‐ Research ‐ February 2017

2017 was a very successful year for the ofThe total commercial real estate investment volume in Europe reached fice letting achieved the best €230 bn inmarket 2016, awhich 10% drop compared to 2015. With €84 bn, the 14 Key interest rates posted new records in 2016. German 10-year bund result by far in 10 years.

The market in thrived Western European markets monitored this report posted the same 10% MANCHESTER DUBLIN turned negative in Q3 (-0.19%) and landed at 0.11% in Q4. This, combined drop. over Investment volumes may in have last in annual most cities the year, especially theslowed down over the360,500 112,227 14.3 415 8.1 high 670 volume of liquidity tightened prime yields with further. For offices, nine months but theywhere remainlarge 41% above the 10-year average of € 59.5bn.

3 largest countries, occupatioprime yields stood at 3.95 % in Q4 2016 on average among the 14 markets analysed in this report, almost 40 bp down on Q4 2015. On €21.2 bn and a 5% drop compared nalWith deals boosted the only market.

Thanks to Ger- to 2015, Central Paris average, high-streetBIRMINGHAM retail prime yields reached 3.35% while logistics ranked good the n°1 Europeanperformance, investment market many’s economic the in 2016. Central London prime yields stood remained in line with its long-term average with a volume of €18.9 bn.

93,374 at 5.74% 13.5 in 403Q4 2016.

AMSTERDAM country’s 4 main markets were particularly 407,379 10.3 410 Céline Cotasson-Fauvet active with a 23% growth over last year. TakeCENTRAL LONDON February 2017 up grew (+11%) over 2016 in Central London 1 , 177,744 6.2 1,404 where large occupier deals were 55% ahead estate investment volume—rolling year was Real estate average prime yields ofReal average levels. The volume of take-up BRUSSELS LILLE ** Western Europe (14 cities) Western Europe (14 cities) 2 much higher than last year in Central Paris Take-up (m ) 401,327 8.3 212,747 200,018 230 Q4 2015 € bn where (+9%), large units were the busiest Q3 2007 Vacancy Rate (%) % €93bn Offi ce Retail * Industrial* €88bn2017. Most European markets folsegment in 93.0 Prime Rents (€/m2/year) 100 8 7.5 LUXEMBOURG 8.0 8 4.0 lowed this healthy trend, particularly Dublin 204,351 4.6 600 2 Take-up in thousand m 7.0 (+45%), 75 Warsaw (+30%), Madrid (+29%), MiCENTRAL PARIS lan (+20%) or Amsterdam (+16%).

6.0 5.7 4

3 .95

BNP Paribas Real Estate ‐ Research ‐ February 2017

BNP Paribas Real Estate ‐ Research ‐ February 2017

100 3 .3 5 The average vacancy rate shrunk again in Eu0 3.0 rope in 2017 and attained all-time record 07 08 09 10 11 12 13 14 15 Q4 2016 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 * Net absorption lows in several markets. The volume of va* Except Luxembourg and Vienna GENEVA * instead of take-up cant space dropped in the 4 largest German 47,042 5.5 688 ** Office supply (m²) markets over volume Q4 2016). Vacancy also instead of vacancy rate Origin of foreign investment volume Real estate(-16% investment LYON contracted Western Europein(14Central cities) Paris, reaching 6.5% Western Europe (14 cities) 269,819 6 300 (-30 bps over 1 year ago) but the most € bn important drop was seen in BucharestQ1 Q2 Q3 Q4 Europe Americ as Asia Middle East Other 100 bps), followed by Warsaw (-300 bps), 10 -yr average : (-410 80% € 59bn TOULOUSE Amsterdam (-230 bps), Lisbon and Madrid 161,773 5.6 220 75 bps). In contrast, vacancy increased in 60% (-160 MARSEILLE ** Central London with 6.2% of vacant premises 145,410 213,018 265 40% (+5050bps vs. last year). Prime rents mostly increased across Europe over the last 12 20% months.

Rental values rose in Central Paris 25 with € 850/m²/year, in Berlin (+16%, BARCELONA 0% €396/m²/year), Brussels (+13%, 304,345 0 07 08 09 10 11 10.112 282 13 14 15 16 MADRID 07 08 and 09 Milan 10 11(+12%, 12 13 14 15 16 €310/m²/year), 552,982 10.2 372 €550/m²/year), whereas they slightly decreased in Central London.

LISBON 166,819

54 DET DANSKE EJENDOMSMARKED 4 2018

8.6

246

1

HELSINKI *

42,022

14

432 TALLINN *

OSLO *

14,108

7.4

28,700

468

8.5

210

STOCKHOLM *

184,000

6

622

European Office Demand

RIGA *

16,600

6.6

186

Take-up *

(M m2)

VILNIUS *

COPENHAGEN *

-

5.7

74,000

270

3.4

192

2

11,000

1

10,000

0

9,000

-1 11

12

13

---- 2016 ---5.1

318

2.0

12

14

15

16

264

-2

17

---- 2017 ----

+12%

11, 558, 060 12 ,989, 689

WARSAW

610,000

BERLIN

913,000

(%)

12,000

8,000

HAMBURG

613,000

Employment growth **

Take-up (m2)

396

Office take-up in the main European cities reached nearly 13 million m², a rise of +12% compared to 2016.

S

310

FRANKFURT

810,000

PRAGUE

8.9

492

3.3

175,000

444

5.2

252

European office prime rent and vacancy

BRATISLAVA

185,000

318

6.2

192

(40 cities)

BUDAPEST

278,484

ZURICH

-

7.5

VIENNA

MUNICH

995,000

* 30 cities - ** Eurozone

390,000

3.9

7.5

276

BELGRADE *

-

6

198

MILAN

353,984

11.7

Vacancy Rate

(%)

688

550

Prime Rents

(€/m²/ year)

11

420

10

400

9

380

8

360

7

11

12

13

14

15

16

17

340

BUCHAREST

322, 100

8.9

216

---- 2017 ----

8.5

7.8

-70bp

402

+3%

Vacancy Rate (%)

ROME

217,854

---- 2016 ----

8.1

420

392 ATHENS

59,000

9.5

250

Prime Rents (€/m²/year) The vacancy rate continued to diminish on average in the main European cities, supported by the combination of growing take-up and low level of completions.

55 THE DANISH PROPERTY 5 MARKET 2018

TEMAARTIKEL:

RENTERS INDFLYDELSE PÅ EJENDOMSAFKAST

56 DET DANSKE EJENDOMSMARKED 2017

FEATURED ARTICLE:

INTEREST RATES INFLUENCE ON PROPERTY YIELDS

57â&#x20AC;&#x192; THE DANISH PROPERTY MARKET 2017

Anders Ulrich Nilsson Analyst, Research MSc in Finance and Strategic Management

2017 blev efter alt at dømme et rekordår for investeringsejendomme. Økonomisk vækst, politisk stabilitet og lave renter var de tre primære faktorer for, at både indenlandske og udenlandske investorer så ejendomme i Danmark som en interessant aktivklasse. Renten har længe været lav i Danmark som følge af Den Europæiske Centralbanks (ECB) lave renteniveau. I denne artikel ser vi nærmere på afkastet for investeringsejendomme sammenlignet med andre aktivklasser som obligationer og aktier, og hvilken indflydelse en højere rente vil få for afkastet for ejendomsinvesteringer.

Udlånsrenten til realkredit- og pengeinstitutter fastsættes af Nationalbanken i Danmark. Udlånsrenten i Danmark er faldet markant siden finanskrisen i 2008 for, blandt andet, at stimulere investeringer og holde hånden under privatforbruget. Den danske fastkurspolitik indebærer, at pengepolitikken er indrettet efter en stabil kronekurs over for euroen. I euroområdet har pengepolitikken som mål at holde inflationen under, men tæt på 2%, da det dels sikrer evnen til at foretage præcise, langsigtede beslutninger om økonomi og investeringer samt opretholde konkurrenceevnen over for landene omkring EU. Ved at holde kronen stabil over for euroen skabes en ramme for stabil inflation i Danmark på lang sigt (Nationalbanken, 2010).

I Danmark, såvel som Europa, er den forbedrede økonomiske vækst begyndt at kunne spores i inflationstallene, der er for opadgående. For EU er inflationen dog ikke på inflationsmålet på 2%. I marts var der således vigende inflations- og væksttal for EU, så stabiliteten i den økonomiske vækst på længere sigt i hele eurozonen er stadig usikker.

For at stimulere økonomien i EU har ECB, foruden at fastholde et lavt renteniveau, opkøbt statsobligationer. Det er endnu uvist, hvornår og i hvilket omfang ECB stopper med deres opkøbsprogram af statsobligationer. Opkøbsprogrammet, der løber indtil oktober 2018, blev dog halveret fra 60 milliarder til 30 milliarder euro i fjerde kvartal 2017.

Hvorvidt programmet bliver forlænget i slutningen af 2018 eller om ECB vælger at følge FED’s, den amerikanske centralbanks, pengepolitik er endnu uvist, men mange markedsaktører forventer en rentestigning fra ECB i løbet af sidste halvår 2019 (Realkredit Danmark, 2018).

Federal Reserve (FED) har hævet deres rente betydeligt det sidste år, primært som et resultat af en stærk fremgang for små og mellemstore virksomheder, et stort antal nye arbejdspladser og stigende inflation. I perioden december 2015 til marts 2018 er den amerikanske IORR steget med halvandet procentpoint fra 0,25% til 1,75% (Board of Governors of the Federal Reserve System, 2018). Tidligere research har vist, at der er en lille sammenhæng mellem FED’s pengepolitik og ECB’s pengepolitik, specielt under store økonomiske begivenheder, herunder IT-boblen i 2000 og 11. september 2001 samt under den store recession i 2009, hvor pengepolitikken fra ECB følger efter FED 58 DET DANSKE EJENDOMSMARKED 2018

med en forsinkelse på 6-9 måneder (Mandler, 2011). Pengepolitiske ændringer afhænger dog i højere grad af konjunkturerne i henholdsvis eurozonen og USA. Der er dog tegn på, at især markedet forventer rentestigninger i den nærmeste fremtid. Både danske og europæiske 5-årige og 10-årige SWAP-renter er begyndt at stige. Ligeledes er der især en stigning i lange obligationsrenter i januar og februar 2018 for derefter at falde igen i marts, hvilket styrker forventningen om, at renterne ikke pludseligt stiger til uanede højder.

Det er effekten af de to modsatrettede begivenheder, nemlig FED der hæver renten som et resultat af forbedret økonomisk vækst, og ECB der fastholder et lavt renteniveau, som skaber udsving i de danske markedsrenter. ÆNDRING I OMKOSTNINGER Prisen for at låne penge til ejendomme øges ved rentestigninger. Finansiering ved hjælp af fremmedkapital bliver højere for ejendomsejere og investorer, hvis og når udlånsrenten stiger, fordi omkostningerne ved realkredit- og banklån stiger. Resultatet af højere finansieringsomkostninger kan være, at investorer er mere tilbageholdende ved at investere i ejendomme. Det kan potentielt give et tilbageslag i investorefterspørgslen og derved transaktionsvolumen. Eksempelvis er renter på korte danske rentetilpasningslån steget med mellem 15 til 20 basispoints fra fjerde kvartal 2017 og det forventes, at de fortsætter med at stige i 2018. Ved en kapitalstruktur hvor ejendommen er finansieret med gæld, har en rentestigning også indflydelse på investeringens internal rate of return (IRR), da IRR er det endelige afkast efter eventuelle gældsfinansieringsomkostninger, hvilket bliver lavere når renten stiger alt afhængig af finansieringsgraden.

Renteniveauet er dog stadig lavt, på trods af udsigten til stigninger, og det forventes ikke, at det vil have den store indvirkning på professionelle investorers interesse i markedet og finansieringsmuligheder. Effekten er dog relativ sammenlignet med betydningen af ændringen ved forrentningskravet eller diskonteringsrenten samt konkurrence for andre aktivklasser, når renten stiger.

RISIKOPRÆMIEN Det forventede afkast, også kaldet forrentningskravet, afhænger tre risikofaktorer, nemlig 1) den risikofrie rente, 2) markedsrisici og 3) specifikke risici (Ejendomsforeningen Danmark, 2013). Den gældende renteudvikling er påvirker derfor også forrentningskravet, da det er lig med den risikofrie rente plus en risikopræmie. Den risikofrie rente sættes typisk i samme niveau som treasury bills, svarende til en 10årig statsobligation i Danmark, da sandsynligheden for tab ved inve-

»The best investment on Earth is earth« (L. Glickman)

2017 was a record year for real estate investment. Economic growth, political stability and low interest rates were the three primary factors for both domestic and foreign investors interest in properties in Denmark. For a long period, the interest rate has been held at a low level in Denmark due to the low interest rate of the European Central Bank (ECB). In this article, we will look at the return on investment properties compared with other asset classes such as bonds and stocks and what impact a higher interest rate will have on the required return on property investment.

Interest rates for loans issued to mortgage institutions and bank are determined by Danmarks Nationalbank. This rate in Denmark has fallen heavily since the 2008 financial crisis, in order to stimulate investments private consumption. The Danish fixedexchangerate policy implies that monetary policy is geared to a stable krone exchange rate against the euro. In the euro area, monetary policy aims to keep inflation below, but close to 2%, as it ensures the ability to make accurate longterm economic and investment decisions and maintain competitiveness with the countries around the EU. By keeping the krone stable against the euro, the conditions for a stable inflation in Denmark is created in the long run (Danmarks Nationalbank, 2010).

In Denmark as well as in Europe, improved economic growth has resulted in upward inflation figures. For the EU, however, inflation is not at the target of 2%. In March, inflation and growth rates for the EU were disappointing, so stability of longterm economic growth across the eurozone remains questionable.

In addition to maintaining a low interest rate, the ECB has initiated a quantitative easing program in order to stimulate the economy of the EU. It is still unclear when and to what extent the ECB stops their government bond purchase program. However, the buyback program was cut down from 60 billion euros to 30 billion euros in the fourth quarter of 2017 and run until October 2018. Whether the program is extended by the end of 2018 or if the ECB chooses to follow the US central bank’s monetary policy is still unclear, but many market participants expect an interest rate increase from ECB during the last half of 2019 (Realkredit Danmark, 2018).

The Federal Reserve (FED) raised interest rates over the past year, primarily as a result of strong growth for small and mediumsized businesses, a great amount of new jobs created and an increase inflation.

From December 2015 to March 2018, IORR has increased by one and a half percentage points from 0.25% to 1.75% (Board of Governors of the Reserve Reserve System, 2018). Past research has shown that there is little correlation between the Fed’s monetary policy and the ECB’s monetary policy, particularly during major economic the eventsunits, including the IT bubble in 2000 and 11 September 2001, and during the

great recession in 2009, when monetary policy from the ECB follows after FED with a delay of 6-9 months (Mandler, 2011). Monetary policy changes, however, depend more on the economic conditions in the eurozone and the US, respectively.

However, indications show how markets expect interest rate increases in the future. Both Danish and European 5-year and 10-year SWAP-rates have begun to rise. Similarly, there have been an increase in long bond yields in January and February 2018 and then fall again in March, which strengthens the expectation that interest rates will not suddenly rise to unprecedented heights.

It is the effect of the two opposing events that influences Danish market rates, namely FED, who have raised interest rates in the past year because of improved economic growth, and ECB who maintains low interest rates.

CHANGE IN FINANCING COSTS The price of borrowing money for real estate increases when interest rates rise. Financing by external capital will be higher for property owners and investors, if and when the lending rate increases, because the cost of mortgage and bank loans increases. The result of higher funding costs may be that investors are more reluctant to invest in ownership. This may potentially lead to a backlog of investor demand and thereby the transaction volume. For example, interest rates on short Danish interest rate adjustments have risen by between 15 to 20 basis points from the fourth quarter of 2017 and are expected to continue to rise in 2018. In a capital structure where the property is financed by debt, an interest rate increase also has an impact on the investment Internal Rate of Return (IRR), as IRR is the final return for any debt financing costs, which will be lower when interest rates depend on the funding level.

However, the level of interest rates is still low, despite the prospect of increases, and it is not expected that it will have a major impact on professional investors’ interest in the market and financing options.

However, the effect is relative to the significance of the change in interest rate or discount rate and competition for other asset classes as interest rates rise.

RISK PREMIUM The expected return, also called the requirement rate of return, depends on three risk factors, namely 1) the risk-free interest rate, 2) market risks and 3) specific risks (Danmarks mæglerforening, 2013).

The current interest rate development therefore also affects the interest rate requirement, as it equals the risk-free interest rate plus a risk premium. The risk-free interest rate is typically set at the same level as treasury bills, corresponding to a 10-year government bond in Den59 THE DANISH PROPERTY MARKET 2018

stering heri er meget lille, og derfor anses det som være det tætteste på et risikofrit aktiv.

Den generelle antagelse er, at folk, herunder investorer, er risikoaverse (Brealey, et al, 2014). Risikoaversion betyder, at investorer vil kompenseres for at påtage sig ekstra risici. Ligevægten bliver derfor, at ejendomme forventet giver større afkast end treasury bills eller sikre danske statsobligationer på grund af den større risiko. Risikopræmien bestemmes som det merafkast investor forventer for den øgede risiko, der tages ved at investere i det givne aktiv i stedet for den risikofrie rente.

Risikopræmien kan estimeres på flere forskellige metoder, men den mest almindelige metode er at se på historiske merafkast på markedsporteføljen i forhold til korte statsobligationer (Naranjo, 1997). Da både ejendoms- og aktieafkast svinger meget over tid, er der behov for meget lange perioder til estimation, da resultater kan være afvigende på grund af store konjunkturudsving i enkelte perioder.

Mens risikopræmierne varierer som følge af udbud, efterspørgsel og andre risikofaktorer for ejendomsmarkedsporteføljer, vil diskonteringsrenterne variere som følge af ændringer i både risikopræmien og de rentesatser, der skaber dem. Når det krævede afkast på konkurrerende eller erstatningsinvesteringer stiger, falder ejendomsværdierne; Omvendt, når renten falder, stiger ejendomspriserne. Det er derfor sandsynligt, at der vil ske en justering i nedadgående retning af ejendomspriserne, når udlånsrenten stiger på kort sigt, da risikopræmien for at investere i ejendomme vil stige.

ANDRE RISIKOFAKTORER DER PÅVIRKER FORRENTNINGSKRAVET Udover renten er der andre faktorer der påvirker forretningskravet.

Af markedsrisici er der illikviditet ved salg, da ejendomme er et illikvid aktiv, fordi omsætningshastigheden er langt lavere end ved aktier og obligationer. Derudover er der også risiko ved beliggenhed, økonomisk, fysisk og funktionel værdiforringelse samt risiko i forbindelse med lovændringer. Af specifikke risici i forbindelse med den enkelte ejendom, også kaldet usystematiske risikofaktorer, er der manglende lejebetalinger, manglende mulighed for genudlejning og uforudsete ejerudgifter, administration og vedligeholdelse.

Der er derfor ikke tale om et én-til-én forhold vedrørende påvirkning på forrentningskravet ved rentestigninger, men nærmere en korrektion i omegnen af 1/4. Eksempelvis hvis renten stiger med 1 procentpoint ændres forrentningskravet med 0,25 procentpoint. Derudover ses det også at det er de store byer, herunder København og Aarhus, der oplever den største korrektion i forrentningskravet ved rentestigninger, hvilket formentlig skyldes den store investoraktivitet i disse områder. De grundlæggende faktorer for efterspørgsel efter ejendomme er nemlig til stede i Danmark, især i de større byer, hvor vi gennem længere tid har set en stor befolkningstilvækst og økonomisk vækst, der giver brugerefterspørgsel efter både erhvervs- og boligejendomme. Historisk set har ejendomme desuden været en god investering, der har givet et stabilt højt afkast sammenlignet med andre aktivklasser.

EJENDOMME GIVER DET HØJESTE STABILE AFKAST: Aktier har siden 1980 givet et højere afkast end ejendomme, hvis kursstigninger på aktier sammenlignes med ejendomsprisstigninger.

Volatilitet har dog historisk set været højere for aktier end ejendomme. En velkendt metode i finanssektoren for at tage højde for risiko og volatilitet er Sharpe Ratio (Sharpe, 1994). Sharpe Ratio måler nemlig, hvor meget mere en given investering har givet i afkast i forhold til en

62 DET DANSKE EJENDOMSMARKED 2018

risikofri investering og sætter så dette merafkast i forhold til investeringens risiko. Målt på Sharpe Ratio har ejendomme faktisk givet et højere afkast end aktier. En ny artikel har sammenlignet investeringsresultater for obligationer, aktier og ejendomme fra 1870 til 2015 og fandt, at over denne 145-årige periode gav ejendomme det højeste afkast (Jorda, et al, 2017). I Danmark var det gennemsnitlige afkast for ejendomme 8,1%, mens det for aktier var 7,2%. Treasury bills og obligationer har i samme periode givet et gennemsnitligt årligt afkast på henholdsvis 2,6% og 3,2%. For vores to nabolande, Tyskland og Sverige, gav ejendomme således også et bedre afkast end aktier, hvorimod for en række andre lande, herunder vores store eksportmarkeder USA og Storbritannien, har aktier givet et højere afkast.

Resultaterne fra artiklen har sine implikationer, eftersom den for eksempel ikke tager alle skattemæssige forhold i Danmark med i beregningen. Herudover fokuserer artiklen på, at ejendomsafkast kun delvist er bestemt af ændringer i ejendomspriser, men også af lejeindtægter. Tilsvarende for aktier er det udbyttebetalinger og aktiekursstigninger, der bestemmer afkastet. Afkastindekset er således baseret både på kapitalgevinster og indkomst fra udlejning. Gennemsnitligt set over samtlige lande i undersøgelsen har nettoudlejningsindtægter historisk tegnet sig for mere end halvdelen af det samlede afkast for ejendomme. Nettoudlejningsindtægter har lavere volatilitet end ændringer i boligpriser, hvilket giver en højere Sharp Ratio. Nettolejeindtægter er også påvirket af højere inflation.

Lejepriser stiger i takt med inflationen, hvilket giver højere nettolejeindtægter. Derfor vil en højere rente som et resultat af højere inflation, sætte pres på ejendomsværdiansættelserne i nedadgående retning, men påvirke nettolejeindtægter i opadgående retning. Blandt nogle ejendomssegmenter, herunder kontorejendomme, kan der under økonomisk recession og usikkerhed være større tomgang, hvilket vil give lavere nettolejeindtægter for ejendomsinvestorer, der i sidste ende vil have en betydning for afkastet.

FORTSAT ATTRAKTIVT EJENDOMSMARKED Rentestigninger vil sætte et pres på risikopræmien og derved øge investorernes forventede afkast. Der er dog ikke tegn på massive ændringer i renteniveauet det næste 1-1,5 år, hvorfor det forventede nettostartafkast vil forblive på et lavt niveau. I tilfælde af rentestigninger voldsommere end markedet forventer, vil det selvfølgelig have en indflydelse på det forventede afkast for ejendomsafkast, ligesom det også vil give korrektioner på aktiemarkedet, da risikopræmien for aktier såvel som ejendomme vil stige.

Markedet for investeringsejendomme i Danmark viser dog stadig gode tegn, hvor tomgangen er faldende og lejeniveauerne er stigende som et resultat af et sundt erhvervsliv og økonomisk stabilitet.

2018 bliver et fortsat attraktivt ejendomsmarked i Danmark, hvor investeringsaktiviteten stadig er høj. Den historisk høje sharpe ratio for investeringer i ejendomme i Danmark bidrager således også til et attraktivt marked. Det er vanskeligt at lave prognoser for flere år i fremtiden, men forventningerne til 2019 og 2020 er en sandsynlig ændring i udviklingen for både lejeniveauer og tomgang, i takt med færdiggørelsen af en række byggeprojekter, der øger udbuddet og derfor vil forårsage en korrektion i ejendomspriserne. Denne periode vil formentlig være kortvarig, da grundlaget for et sundt ejendomsmarked er til stede.

Âť ...higher interest rates, as a result of higher inflation, will put pressure on property value adjustments downward, but affect net income in the upward directionÂŤ

mark, as the probability of default and loss on investment is limited and therefore it is considered to as a risk-free asset.

The general assumption is that investors are risk averse (Brealey, et al, 2014). Risk aversion means that investors requires compensation for taking extra risk. The equilibrium becomes that properties expected yield greater returns than treasury bills or secure Danish government bonds due to the greater risk. Risk premium is determined as the excess return the investor expects for the increased risk taken by investing in the given asset instead of the risk-free interest rate.

Risk premium can be estimated on several different methods, but the most common method is to look at historical excess return on the market portfolio compared to short government bonds (Naranjo, 1997). Since both property and equity returns fluctuate considerably over time, there is a need for very long periods for estimation, as results may be different due to large cyclical fluctuations in certain periods.

Thus, while risk premiums vary as a result of supply, demand and other risk factors for property market portfolios, discount rates will vary as a result of changes in both the risk premium and the interest rates that create them. When the required return on competing or replacement investments rises, property values fall; Conversely, when interest rates fall, property prices rise. It is therefore likely that there will be a downward adjustment of property prices when the lending rate rises in the short term as the risk premium for investing in real estate will increase.

OTHER RISK FACTORS AFFECTING THE INTEREST RATE REQUIREMENT In addition to the interest rate, there are other factors that affect yield requirements. Due to market risks, there is an inequality in sales, as property is an illiquid asset because the turnover rate is much lower than shares and bonds. In addition, there is also a risk of location, economic, physical and functional impairment as well as risk associated with legislative changes. Of specific risks associated with the individual property, also called unsystematic risk factors, there are lack of rent payments, lack of rehire and unforeseen ownership costs, administration and maintenance.

Therefore, it is often not a one-to-one relationship regarding the rate of return on interest rate increases, but a correction in the region of

1/4. For example, if interest rates rise by one percentage point, the yield requirement changes by 0.25 percentage points. In addition, it is also seen that the major cities, including Copenhagen and Aarhus, are experiencing the largest correction in the yield requirement for interest rate hikes, which is probably due to the high level of resident activity in these areas. Basic conditions are healthy for real estate investment in Denmark, especially in the larger cities, for which we have seen a large population and economic growth for a long time, which increases demand among users for both residential and commercial properties. Historically, real estate has also been a good investment, which has given a stable high return compared to other asset classes.

PROPERTY PROVIDES THE HIGHEST STABLE RESULT Since 1980, stocks have given a higher return than properties, whose price increases on shares are compared with property price increases.

However, volatility has historically been higher for stocks than properties. A wellknown method in the financial sector to adjust for risk and volatility is Sharpe Ratio (Sharpe, 1994). Sharpe Ratio measures the average return earned in excess of the risk-free rate per unit of volatility or total risk. Measured at Sharpe Ratio, real estate has on average actually provided a higher return than stocks. A new article has compared investment results for bonds, stocks and properties from 1870 to 2015, and found that over the 145-year period, properties yielded the highest return (Jorda, et al., 2017). In Denmark, the annual average return on real estate was 8.1%, while stocks gave an annual return of 7.2%. Treasury bills and bonds have, in the same period, given an average annual return of 2.6% and 3.2%, respectively. Thus, for our two neighboring countries, Germany and Sweden, properties also provided a better return than stocks, whereas for other countries, including our largest export markets, the United States and Great Britain, stocks have gave higher returns.

The article also have implications. It does not include all tax issues in Denmark in the calculation. In addition, the article focuses on the fact that property returns are only partly determined by changes in property prices, but also by rental income. Similarly for equities, the return determined by dividend payments and share price increases. The return on income is thus based on both capital gains and income from rental. On average, across all countries in the survey, net rental income has historically accounted for more than half of the total return on property. Net rental income has lower volatility than changes in house prices, resulting in a higher Sharpe Ratio. Net income is also af-

63â&#x20AC;&#x192; THE DANISH PROPERTY MARKET 2018

fected by higher inflation. Rental prices increases in line with inflation, resulting in higher net income. Therefore, higher interest rates, as a result of higher inflation, will put pressure on property value adjustments downward, but affect net income in the upward direction.

Among some property segments, including office properties, economic vacancy and uncertainty may be greater, which will result in lower net income for real estate investors who will ultimately have an impact on the return.

CONTINUED ATTRACTIVE PROPERTY MARKET Raise in interest rates will put pressure on risk premiums, thereby increasing investors’ expected returns. However, there are no signs of massive changes in the level of interest rates for the forecoming 12-15 months, where the expected net income return will remain at a low level. In the case of interest rate rises more violent than the market expects, it will of course have an impact on the expected return on

Gennemsnitlig årligt afkast 1875-2015 Average annual return 1875-2015 Afkast i Danmark Return in Denmark

property returns, as will also give corrections to the stock market as the risk premium for equities as well as real estate will increase.

However, the market for investment properties in Denmark still shows good signs, where vacancy rates are falling and rental levels are rising as a result of healthy business and economic stability. 2018 will be a still attractive property market in Denmark, where investment activity still is high. The historically high sharpe ratio for investments in properties in Denmark also contributes to an attractive market. As always, it is difficult to make forecasts for several years in the future.

However, predictions for 2019 and 2020 are that changes will occur in both rental levels and vacancy rates, as completion of several construction projects that increase supply and therefore will cause a correction in property prices. This period is likely to be shortlived as the basic conditions for a healthy real estate market are at place.

Treasury Bills

Obligationer Bonds

Aktier Stocks

Ejendomme Properties

2,6%

3,2%

7,2%

8,1%

1875-2015

Efter / after 1950 - 2015

Efter / after 1980 - 2015

Gennemsnitlig årligt afkast 1875-2015 Average annual return 1875-2015

Aktier Stocks

Ejendomme Properties

Aktier Stocks

Ejendomme Properties

Aktier Stocks

Ejendomme Properties

Afkast i Danmark Return in Denmark

7,2%

8,1%

9,3%

7,0%

12,6%

5,1%

Kilde: Jorda, et al, 2017 / Source: Jorda, et al, 2017

LITTERATURLISTE / REFERENCES: Brealey, R. A., Myers, S. C., & Allen, F. (2014), “Principles of Corporate Finance”, (11th ed.). McGraw Hill Education.

Ejendomsforeningen Danmark, Dansk Ejendomsmæglerforening.

(2013), ”Værdiansættelse af investeringsejendomme – definition af forrentningskrav”, Jorda, O., Knoll, K., Kuvshinov, D., Schularick, M., Taylor, A., (2017); “The Rate of Return on Everything, 1870-2015”; Federal Reserve Bank of San Francisco.

Mandler, M. (2011) “Explaining ECB and Fed interest rate correlation: Economic interdependence and optimal monetary policy”; “University of Giessen, Germany”.

Narranjo, A., Ling, D. C., (1997) “Economic Risk Factors and Commercial Real Estate Returns”; The Journal of Real Estate Finance and Economics.

Nationalbanken (2009); “Pengepolitik I Danmark”; 3. udgave.

Realkredit Danmark (2018); ”Hvad sker der med renterne på boligmarked?”; Renteprognose, 28/02-2018.

Sharpe, W. (1994); “The Sharpe Ratio”; The Journal of Portfolio Management.

64 DET DANSKE EJENDOMSMARKED 2017

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