SPECIALISTS WITHIN
INDUSTRY & LOGISTICS - SALES, RENTALS AND COUNSELING
Commercial properties continue to be in demand In Denmark we have 103,5 million square meters (pr. July 1st, 2017), which are zoned for industrial and logistical purposes. Since 2010 this type of space has experienced a growth of roughly 4 million square meters, but as a result of a positive development of the Danish economy, including the productivity in trade and industry, the registered availability (*) has fallen from slightly over 4% in 2010 so that it is now at around 2,5% nationally. The change in the vacancy rate equals a decline in the supply of ca. 300.000 square meters (year to this day), so that the overall supply nationally amounts to just ca. 2,5 million square meters. At Newsec we have seen this development. The number of empty properties and premises has declined steadily. We have been observing the tendency for almost two and a half years and we have encouraged longterm investors to start building activities, but this has only happened to a lesser extent. Thus, the outcome today is a lack of well situated properties and premises – a condition which the companies looking for this type of properties only experience once they have started searching and are unable to find anything suitable within a short period of time.
At Newsec we see rent prices going up, new investors are interested in speculative construction and companies are interested in properties where they can build to expand their premises – a condition which is plays a part in some of the solved cases which we have chosen to include in our annual publication. As shown in these cases, we have once again been able to sell vacant building plots for new projects and the interest in looking at potential building options is increasing. Almost three years ago we started developing a “basic stock” where we have collected many different building option, for instance in the shape of large plots which can be divided or parcelled out, to suit smaller building projects (3000-5000 square meter for production/storage halls or offices) as well as bigger projects up to 25000 square meters. In the “basic stock” we find properties belonging to different owners, some of which do not wish to sell but are interested in building premises for a company, after which they intend to keep the property as an investment.
and, finally, we also have owners who wish to sell the lot as a” green field”. Feel free to contact us to discuss the many different options. The number of investment properties within the segment is also on the rise as a result of low initial yields, which have contributed to the fact that more owners would like to sell their property. Also, we see that the investors are increasingly looking to opportunities in different parts of Denmark, which causes the demand to be less skewed and provides more opportunities for those who wish to sell. It also means that an increasing number of companies consider selling their property in a sale & lease back arrangement, hoping to release funds which can be directed towards production spendings instead. We at Newsec are always ready to help and to provide counselling regarding buying, selling, and renting. For further information, please contact us.
Others would like to build for a third party, hoping that the company buys the lot after the construction is completed
(*) – availability within properties developed for industrial and logistical purposes, as published in www.ejendomstorvet.dk areal statistic
%
Front page photo: Skandinavisk Transport Center, Køge
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Tomgang for industri7 og logistikejendomme i Tomgang for industriDanmark i 2010-2017
og logistikejendomme i
Vacancy for Industrial and 6 Danmark i 2010-2017 logistic properties 2010-2017
%
8 7 6
5 5
Total landet Denmark Hele
4
4
Hele landet
3
3
Københavns omegn Copenhagen Surrounding Area Københavns omegn
2
East Jutland Østjylland
Østjylland
1
2 1 0
0
2011 2014Q3 Q4 Q1 2015 Q1 Q2 Q3 Q4 2010 Q1 Q2 Q3 Q4 Q1 Q2 Q32012 Q4 Q1 Q2 2013 Q3 Q4 Q1 Q2 Q2 Q3 Q42016 Q1 Q2 Q3 2017 Q4 Q1 Q2 Q3 Q4
2010 2
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2011
2012
2013
2014
2015
2016
2017
FACTS Total building area (ekscl. Cellar): 16400 m2 Cellar: 6500 m
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Year of construction: 1988
TEGLHOLMSGADE 1, KØBENHAVN SV
SURPLUS WAREHOUSE IN CENTRAL COPENHAGEN RENTED OUT FOR TDC For several years we at Newsec have been giving advice to TDC regarding properties and rentals in many parts of Demark. In connection with the ongoing adjustments regarding TDCs needs in terms of space, Newsec was given the task of renting out the surplus areas at Teglholmen, Denmark’s largest office building complex by the way, which also includes a warehouse of 13000 square meters. As well as a spacious warehouse spanning the entire floor plan, the building also features a basement with an access ramp and office floors interposed along the façade. The warehouse had in part been used for the company’s own fixtures and equipment and partly used by the Danish Red Cross for the storage of effects intended for charity.
Due to its research activities with building materials SBi had very specific requirements regarding the use and arrangement of the property, but in close cooperation with SBi, TDC and he municipality of Copenhagen we managed to obtain the necessary permissions. SBi has started the work on the desired and specifically adapted arrangement of about 1/3 of the warehouse building.
Newsec had had an ongoing dialogue with the university of Aalborg (AAU) regarding an extension of their adjacent campus, with regards to creating more space for Statens Byggeforskningsinstitut (SBi) which is organized as a part of AAU.
Newsec continues to optimize TDCs premises at Teglholmen as well as other TDC - owned buildings nationwide.
Thanks to a longtime cooperation with PostNord, Newsec knew that they were looking for a well situated (central Copenhagen) distribution centre and the warehouse building at Teglholmen was taken into consideration as a great possibility early in the process.
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FACTS Total building area: 3257 m
2
2 Store: 2265 m
Office: 992 m
2
Year of construction: 2003 Area: 9518 m
2
ERIK HUSFELDTSVEJ 7, TAASTRUP
FROM TOOLS TO HIGHTECH INNOVATION Newsec had the sale of the fine commercial property remitted to Zibra A/S. The Japanese tool manufacturer Kyocera Unimerco used to reside at Erik Husfeldts Vej 7, but now the property is going to be the home of a new Danish powerhouse for knowledge called InOvation.
The property was empty for some time, but with a persistent sales effort we found the right buyer who was able to see the future possibilities for the building. Also, the location in the municipality of Høje-Taastrup is a definite plus for the new companies that are going to use the premises.
Kyocera constructed the high-quality building in 2003 and the 3257 square meters contain a production hall, warehouse, administration offices and acco modation for visiting employees from abroad, including showers.
The new owner of the property, Zibra A/S, has bought the property intending to establish InOvation. Th building is to be transformed into a high-tech innovation centre consisting of the technologies of the future, excellent architecture and a kitchen serving the best nourishment for curious brains. The ambition is to create an intensely inspiring environment which can create growth, creativity, and job satisfaction for organizations hungry for innovation and to give birth to new companies which can make a difference within the Danish society.
Unimerco was founded in 1964 and the pr mary activity was the production and sales of nailers. Many mergers later, the company now sells and provides counselling regarding tools for cutting, tools for measurements and tools for fixings. The company has been a part of the global Kyocera organization since 2011. 4
FACTS Total building area: 3.983 m
2
Store: 2.829 m
2
Office: 874 m
2
Constructed/renovated: 1970/1977-1996 Area: 11.500 m
2
EJBY INDUSTRIVEJ 26, GLOSTRUP
PROPERTY WIH A SHORT TENURE FOR SALE WITH GOOD MARKETING For several years, the property has been the headquarters for the company Granzow A/S, which manufactures and sells compressed air systems. In connection with a sale of the company many years ago, the family chose to keep the building. The owner of the property, a member of the Granzow family, wanted to explore the possibilities of a sale of the property, after having made some changes regarding investment strategies for an investment company belonging to the owner. The property was to be sold as investment property and the size of the property meant that the number of potential buyers was very large. The challenge, however, was that the tenure for the renting contract had only a short term of 12 months left, which deterred many of the potential buyers. A property with such a short term demands a certain solidity
and for the investor to have a certain amount of other investment properties to make up for a possible period with availability. To ensure that the offer of the property became widely known in the market area, the marketing effort, in print media as well as online, was massive. Newsec identified an investor whose investment strategy suited the size, location, and applications of the property. And for whom it was not a critical issue that it had only a relatively short term left on the tenure of the rent contract.
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FACTS Total building area: 2.952 m
2
Store: 2.028 m
2
Office: 874 m
2
Year of construction: 2003 Area: 5.682 m
2
BJARKESVEJ 5, ALLERĂ˜D
PROPERTY WITH LONG LOANS RENTED OUT AND SOLD WITH CONDITIONS Newsec were given the task of selling the property, since the tenant, North Sails, wanted to move their production of sails to the UK and therefore did not need as much space as they used to do.
than what they were initially searching for. In order to make ends meet economically for the prospective tenant, Newsec had to adapt/divide the property. A solution was presented to the owner, with the necessary investments.
The challenge with this property was that firstly, it had an 8-year swap-loan running and secondly, a lack of cash flow because the tenant was moving out. The property was difficult to sell to an investor and so Newsec initially focused on a new rent agreement for the property.
Instead, the solution, to the satisfaction of both parties, was that the company rented the entire property as a headquarter and with subleasing rights and were given option on the property once the swap-loan runs out. That solution meant that the owner did not have to pay for a division of the property but would still have to accept a reduced rent price for the surplus areas. Also, the company took the property as it was and must pay for any required changes or adjustments That way, our client had their property rented out and, presumably, sold.
A company which, among other things, manufactures medical instruments were looking for a place to rent with a 1500 square meter warehouse and 500 square meters of office space. We suggested the property at Bjarkesvej, even though it was roughly 30% larger 6
FACTS Total building area: 982 m
2
Store: 619 m
2
Office: 363 m
2
Constructed/expansion: 1956/85-88 Lot area: A part of a property with many users Lot area: 8626 m2
LYSKÆR 10, HERLEV
A MEETING OVER A CUP OF COFFEE PREVENTED POTENTIAL AVAILABILITY In connection with a meeting with Friheden Gruppen, which has developed, and which owns properties in Herlev among other places, we heard that one of their tenants was moving out of some of the warehouse buildings. While working with the property at Bjarkesvej 5, Allrød, we in Newsec were aware that the tenant (North Sails) were looking for a smaller location for the repair of sails, and we indicated to Friheden Gruppen that we might already have a new tenant for them.
At Newsec we work with long time business relations, thus obtaining detailed knowledge about the current situation of our clients; are there any properties they wish to sell or buy, lease agreements running out, companies moving out of rented buildings, etc. The detailed knowledge we accumulate can sometimes ensure a quick process for a sale or an acquisition (quite often bypassing the market) or we might be able to help when it comes to moving a tenant to a rented building which becomes available. The case of Lyskær 10 is a fine example of how knowledge via one client can lead to a quick sale for another – to the satisfaction of both parties.
We introduced North Sails to Lyskær 10, and it turned out to be perfect for them. In the contract negotiations between tenant and proprietor an agreement was reached according to which the owner renovated the property according to the wishes of North Sails and thus a good level for the market rent was achieved. 7
FACTS Total building area: 9500 m
2
Store: 8000 m
2
Office: 1500 m
2
Constructed/renovated: 1990/1996-2011 Area: 30000 m
2
KAARSBERGVEJ 2, EBELTOFT
FROM TATA TO TÆKKER: PROPERTY WITH A SPECTACULAR VIEW OF THE SEA Our client, TATA Steel, a part of the biggest conglomerate in India, decided to move their entire Danish production of steel plates from Ebeltoft to Halmstad in south Sweden, where they would be able to gather the fabrication units in Scandinavia and at the same time ensure an optimized distribution to the Nordic countries. Newsec was given the task of appraising the property and then to sell it. The extraordinarily beautiful commercial property with a magnificent view of the sea from the main building, overlooking Ebeltoft Vig /the Bay of Aarhus would up until 2014 have had a perfect location in terms of logistics, with only 150 meters to the ferry port of Ebeltoft, from whence TATA Steel were able to transport elements for roofs and house facades to Sjællands Odde and Sweden. Over time, Ebeltoft (and the Djursland peninsula) has become an area characterized by tourism and today houses almost no industrial 8
activities and since MOLSLINJEN are all but closing the route from/to Ebeltoft, the location is no longer favourable for TATA Steel. The fact that Ebeltoft was no longer suitable for industrial transport – neither by sea nor over land due to there being no circular road or bypass- made it a difficult sales task. Therefore, Newsec contacted many companies outside the industrial segment as well as educational institutions and entertainment parks. The property went to property developer Jørn Tækker, who was able to see many possible applications for the property with the sizeable acreage, for instance the founding of a centre for art.
FACTS Total building area: 13386 m
2
Store: 10386 m
2
Office: 3000 m
2
Year of construction: 1970/92 Area: 25506 m
2
ULLERUP SKOVVEJ 1, HUNDESTED
SOLID BUYERS COUNSELLING AND SUCCESSFUL NEGOTIATION LED TO A SENSIBLE AGREEMENT Newsec had been selling the large commercial property on behalf of an American company which manufactured products for the medical industry. Thus, we had a lot of knowledge about the conditions on the premises when we were given the task of counselling et another potential buyer with regards to their interest in the property.
The potential buyer was a relatively new company which produces infant formula, primarily for the Chinese market. After a larger scandal a few years ago regarding infant formula in China, infant formula manufactured outside China has been in great demand and the Danish company wished to expand their production.
The 13386 square meters were in good condition, and even though the prospective buyer only needed some of the ware-house buildings, our client was prepared to buy the rest as well, including the administration building, provided that this would happen at a fair price.
We succeeded in negotiating a price which was low enough for the company to buy the entire property.
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FACTS Lot area: 72189 m
2
ULLSVEJ 1, KØGE
WELL SITUATED LOTS ARE COVETED PostNord has chosen to prioritize third party logistics (TPL) and therefore they wanted to make an investment of 800 million kr towards a huge, new warehouse as well as a terminal for packaging and handling of goods in Køge, from where the connections to the rest of the country, Scandinavia and the other parts of Europe are excellent. TPL is a strategic area of focus for PostNord, basically entailing that PostNord stores goods for others, online stores for instance, and then pick and deliver the goods to the consumer. The venture demands large capacities and an efficient, modern warehouse location, which will make Denmark attractive to customers who wish to outsource warehouse activities and the corresponding distribution. That kind of capacity can be found at Skandinavisk Transport Center (STC), in Køge, where companies can build up to a height of 30 meters. The building projects, which are expected to be completed around the 10
end of 2017/beginning of 2018, need a lot of space and Newsec helped the selling party, NCC Property Development, remit the sale of the lot of a size of around 72000 square meters. Earlier this year STC reported that the lots had been sold out. A total of 1700000 square meters have been sold since the area stood as an empty, unused field back in the year 2000. The extension with 7-8000 square meters is good news for the industry. Køge is situated relatively close to Copenhagen and the municipality has made it more attractive for companies to settle in the area because it promises speedy, efficient management of cases and no coverage must be paid. Also, the companies can look forward to even better transportation possibilities with the connection vie the Belt of Fehmarn and the projected highspeed railway between Copenhagen and Ringsted.
FACTS Total building area: 1361 m
2
Store: 661 m
2
Office: 700 m
2
Constructed/renovated: 1964/1973/1996 Area: 4582 m
2
EDWIN RAHRS VEJ 76, BRABRAND
NEW STRATEGY LED TO SALE IN SPITE OF STRICT ZONING RULES The property, situated in the commercial area in Brabrand, just outside Aarhus, stood empty and had been up for sale for quite some time. The challenge was not the property itself, which is very well exposed, has a fine warehouse with a good height and office area/showroom with double glazing windows from floor to ceiling, which provides good conditions in terms of light. The very strict zoning regulations, however, were a constraint on the sales process, since it would only permit companies in ground water class 1 and commercial categories 2-6 to establish themselves on the address – for instance manufacturers of knitted goods or various types of clothing, smokeries or spinneries. Applying for a dispensation would be possible if the company belonged to a different class or category, but the municipality wished only to consider applications from
specific companies. Therefore, a prospective buyer would not be able to get a preliminary permission but would have to have gone well into the sales process before a dispensation would be granted. In the fall of 2016 the decision was made to put up a sign on the premises and to start working with it as a case with possibilities for both sale and rent – intending to make it an investment property, which would, we hoped, contribute to an easier sales process. A few months later, the property was sold to an entrepreneur who bought it so that he could use it himself. He found the warehouse useful as it was, for raw materials and machines, and he was given dispensation to reconstruct the front house in order to use it as office space on two floors.
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TO NEWSEC EGESKOV & LINDQUIST - property advisers specialised in commercial real estate AGENCY & BROKERAGE • Acquisitions/sales • Rentals • Divestment strategies • Sale & lease back CAPITAL MARKETS • Investment properties • Corporate Finance • Investment consulting
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Contact Copenhagen: REGITZE LUND Associated partner, senior advisor, MRICS Dir.: +45 28 94 81 44 regitze.lund@newsec.dk KLAUS ULRIK ØSTERBALLE Property Adviser Dir.: +45 27 78 96 39 klaus.osterballe@newsec.dk Contact Aarhus: HENRIK FROST SØRENSEN Associated partner, senior advisor, MRICS Dir.: +45 27 83 84 39 henrik.frost@newsec.dk
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