Aarhus Locations MR2020

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OFFICE HOTEL RETAIL INDUSTRIAL RESIDENTIAL REGIONS

Aarhus

LOCATION DESCRIPTIONS

Published by Colliers. Reproduction or citation only with acknowledgement of source. This is an online addition to The Copenhagen Market Report 2020, based on market data that we believe are reliable. Please note that the rental prices quoted may reflect data inconsistencies compared to the respective pre-merger (July 2018) databases of Colliers and/or Sadolin & Albæk. Whilst every effort has been made to ensure that the information provided in the report is both accurate and complete, Colliers accepts no liability for factual errors.

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Location descriptions | Aarhus – Market Report 2020

In brief Aarhus property market

Introduction Next to Copenhagen, Aarhus is the largest city in Denmark. It enjoys a central location between the urban centres of Jutland, with only about one hour’s drive to Aalborg in the north, Herning in the west and the Triangle Region in the south. As of 1 October 2019, the City of Aarhus (i.e. the municipality) has some 350,000 inhabitants. It is located at the heart of the Central Denmark Region (Region Midtjylland) with more than 1.3 million inhabitants. This region is considered the catchment area of Aarhus. Today, Denmark is witnessing a general migration trend away from more peripheral locations, spurring population growth in the cities. This is particularly true of Aarhus, reflected in very strong population forecasts for the years ahead. By Q1 2045, Statistics Denmark anticipates population growth of approx 8%. As this population boost is expected to spur demand for space, the City of Aarhus is actively pursuing development plans for new residential and office construction. In general, the office sector, including the liberal professions and the service industry, is expected to account for the majority of new jobs in future. The aim is to place these new developments within the city boundaries by converting former industrial sites into up-to- date mixed-use residential and commercial districts.

Location descriptions | Aarhus – Market Report 2020

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Office

Aarhus has the following four main office locations:

Aarhus C/central Aarhus Aarhus C, central Aarhus, continues to be the main prime office location, and office premises in this area generally command the highest rents in Aarhus. The area typi- cally attracts the liberal professions, financial companies and knowledge-intensive profes- sions that value proximity to the city centre and want a prominent and visible location in the cityscape. A large share of the office stocks in this part of the city is not up-to-date or space-efficient. However, new office construction is taking place in and around the harbour area, especially around the square of Frederiks Plads. The Sydhavnen harbour area is being redeveloped by A. Enggaard A/S into a new commercial district with office spaces, hotels and shops. Aarhus N/Skejby Skejby and the surrounding area in Aarhus North, is a highly successful office area. However, the area is characterised by intensive traffic during peak hours, which has meant that some tenants are looking to relocate further north. By opting for premises north of Skejby, tenants will typically also achieve a lower rent level. Vestas is one of the main firms in the area, occupying large-sized premises in the area. Other large office users in the area include Falck, G4S, ATEA, IBM, Willis, NRGi, Mercuri Urval and Rambøll. Apart from offices, the area also houses the 25,000 sq m north campus of VIA University College and the university hospital, Aarhus Universitetshospital, which, due to being appointed a superhospital, is undergoing a comprehensive expansion and is expected to be fully operational as from 2020. Aarhus V Offices in the urban areas Åbyhøj, Brabrand and Aarhus V, which can be categorised as Aarhus West, are typically concentrated around the Ring Road and along the approach roads. There is generally a greater difference in quality than in Aarhus C and Aarhus N, which is reflected in relatively large differences in rent levels. A popular office district has evolved along Viborgvej, attracting several large businesses and new office developments. Current tenants in the area include Tryg, Siemens and KPMG. Furthermore, the new office towers called Byporten are expected to welcome new tenants in near future. In Aarhus V, the City of Aarhus has taken the first steps in the transformation of the Gellerup neighbourhood, with the completion of a new office building, Blixens, of approx 20,000 sq m with room for approx 1,000 employees. It is expected that other new office buildings will be constructed in Gellerup, especially along the ring road, which may become a new attractive office area in Aarhus in the long term.

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Location descriptions | Aarhus – Market Report 2020

OFFICE

Change

Market Expectations

Typical rent levels

2017 1,350

2018 1,400

2019 1,400 1,050 1,250

2020 1,450 1,050 1,250

2019-20 2020

4% 0% 0% 0% 5% 0% 5% 0%

Prime

Aarhus C

800

900

Secondary

1,150

1,200

Aarhus N

800

800

800

800

1,100

1,100

1,100

1,150

Aarhus V

700

750

800

800

1,000

1,000

1,000

1,050

Aarhus S

700

700

700

700

Note: Rent levels quoted in DKK per sq m p.a. exclusive of operating costs and taxes. Market expectations indicate trend forecast for the next 12 months. Source: Colliers

Aarhus S The office market in Aarhus South, which includes the urban areas Viby J, Tranbjerg and Højbjerg, is generally characterised by being estab- lished earlier than other areas, which is reflected in the age and quality of the buildings. Therefore, this area typically attracts companies that have a relatively strong focus on cost in their rental search. The prime office space in this area is often located with a facade facing either the ring road or the access roads.

Location descriptions | Aarhus – Market Report 2020

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Residential development areas

Aarhus has the following four main residential development areas:

Aarhus Ø Located in the previous industrial harbour, Aarhus Ø is expected to have 12,000 resi- dents and 10,000 workplaces when fully developed. The area has a number of prom- inent residential buildings, including stages one and two of Lighthouse, The Iceberg, Havneholmen and Havnehusene. Located with a waterfront location, residential rents and prices in Aarhus Ø are above average. However, in order to secure varied urban development, the City of Aarhus has specified that a quarter of the residential construction must consist of rent-regulated social housing. Lisbjerg Located approx six kilometres north of Aarhus and connected with light-rail, Lisbjerg is the largest urban development area in Aarhus. The area is expected to have 25,000 inhabitants when fully developed. The first units around the old village have already been constructed, and there are plans for much more than just housing: In order to ensure sustainable development, a town centre with shops, cafés and restaurants is planned.

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Location descriptions | Aarhus – Market Report 2020

Brokvarteret Brokvarteret stretches all the way from Godsbanen to Trianglen and further out along Søren Frichs Vej. In total, approx 2,800 residential units are envisaged when the area is fully developed. In 2019, Trianglen was completed, and A. Enggaard and PKA started the construction of several hundred residential units. The units will be a mix of rental and owner-occupier flats, as well as social and student housing, contributing to the diversity of the neighbourhood. In the next couple of years, Godsbanekollegiet (student housing) and Falckgården are expected to be ready for occupancy. Risskov Brynet In the old industrial area, Risskov Brynet is developing into a new sustainable city district with approx 1,800 residential units, including around 650 student apartments.

Location descriptions | Aarhus – Market Report 2020

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Retail In all parts of Denmark, retail markets are under pressure due to the increasing amount of online sales. This has led to a dichotomy in the market, where location has become paramount to retailers. The continued strong footfall in prime locations may serve to keep business afloat, whereas prospects are less bright in secondary locations. Consumer trends have shifted away from goods towards experiences. As a result, retail vacancy rates have inched upwards in recent quarters, and may continue to climb, resulting in downward pressure on rental levels, particularly for secondary locations. Prime locations in the high-street area, centered around Søndergade and including the streets of Ryesgade, Skt. Clemens Stræde and Immervad are also under pressure, seeing a downtrend in rents over the past 12 months or so. Likewise, the central square of Store Torv is starting to struggle, experiencing an excep- tionally high number of retail vacancies. Existing retailers at Store Torv include Bang & Olufsen, Royal Copenhagen, Peak Performance as well as Tiger of Sweden. Generally speaking, the streets running off the main high streets have seen a weaker trend, with Guldsmedegade in the so-called Latin Quarter of Aarhus as somewhat an exception, attracting relatively strong occupational demand. Dating back to the 15th century, the Latin Quarter of Aarhus features many well-preserved original buildings and structures, today serving as a unique setting for shoppers and visitors alike.

Situated in the very city centre in connection with the main station, the shopping centre of Bruun’s Galleri has managed to retain fairly strong retail sales.

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Location descriptions | Aarhus – Market Report 2020

Thanks to its location, many visitors to Aarhus are automatically directed through the shopping centre. In terms of footfall, Bruun’s Galleri is therefore among the best-per- forming shopping centres in Denmark. Shopping centres outside central Aarhus include Storcenter Nord to the north and CityVest to the west. Both are well-functioning shopping centres that cater to the needs and requirements of the population in the immediate catchment area. The clusters of big box outlets, located around Tilst and Skejby, are less susceptible to changes in market conditions thanks to their ability to achieve synergies in a wider catch- ment area and their ability to offer a greater variety of goods. Their strategic location combined with the predominance of large, well-capitalised chains have cushioned them from large-scale vacancies. Major customer magnets in Skejby include IKEA, ILVA, Silvan, STARK and Elgiganten. In Tilst, the most popular big box stores include Bilka, Elgiganten, BAUHAUS, Babysam, Power and Harald Nyborg.

RETAIL

Change

Market Expectations

Typical rent levels

2017 6,750 3,200 2,900 2,000 3,150 1,700

2018 7,000 3,400 3,000 2,300 3,350 1,800

2019 7,000 3,600 3,200 2,500 3,500 2,000

2010 2019-20 2020

6,250 3,500 3,100 2,250 3,500 2,000

-11% -3% -3% -10%

Prime

Aarhus high street (upper end)

Secondary

Aarhus high street (lower end)

0% 0%

Aarhus Latin Quarter

Note: Rent levels quoted in DKK per sq m p.a. exclusive of operating costs and taxes. Market expectations indicate trend forecast for the next 12 months. Source: Colliers

Location descriptions | Aarhus – Market Report 2020

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Industrial & logistics

Thanks to its motorway proximity, Logistikparken Aarhus west of Aarhus has developed into a prime industrial/logistics location. Danske Fragtmænd was the first company to relocate here, and several large companies have followed suit, including Brixius Trading and Søstrene Grene, the latter completing a logistics facility of 31,200 sq m in 2018. In 2019, Advansor moved into its new headquarters (approx 10,000 sq m) at Rosbjergvej. When fully developed, Logistikparken will extend to 177,000 sq m commercial space on 44 hectares in total. Also in the Logistikparken area, at Årslev, Salling Group has built a large-scale distribu- tion centre. In this location lies the 23,000 sq m fresh produce terminal of Netto, serving all Netto supermarket stores west of the Great Belt. In addition, there is a 53,000 sq m non-food terminal that serves all Føtex and Bilka stores in Denmark. Other prime locations include Hørning, where Frode Laursen, Antalis and Hørkram are located, and Hasselager, where COOP has its fresh produce terminal for all of western Denmark. Older industrial clusters are found at Lystrup, Brabrand, Viby J and Risskov. Commercial areas along the E45 motorway, defined as Skanderborg/Stilling south-west of the city and Hinnerup/Søften to the north-west, are also popular with logistics and wholesale businesses due to their proximity to the Aarhus, ensuring easy access to a strong recruitment base. Important companies located in this motorway corridor include DHL, Freja Transport & Logistik, Bridgestone and GLS.

INDUSTRIAL/LOGISTICS 1

Change

Market Expectations

Typical rent levels

2017

2018

2019

2020 2019-20 2020

400 250 450 275

400 250 475 275

400 275 475 300

425 275 450 300

6% 0%

Prime

Central Aarhus and inner ring roads

Secondary

-5%

Aarhus: Approach/outer ring roads 2

0%

1 Industrial includes production, storage and logistics facilities. 2 The prime rents quoted apply also to locations with E45 proximity, i.e. Hinnerup/Søften and Skanderborg/Stilling. Note: Rent levels quoted in DKK per sq m p.a. exclusive of operating costs and taxes. Market expectations indicate trend forecast for the next 12 months. Source: Colliers