Colliers Aarhus Delrapport 2023 UK

RESIDENTIAL

Letting market equilibrium?

4,146 residential units

This has manifested itself in an increase in vacancies in relatively uniform residential properties in more secondary locations. Similarly, residential newbuilding schemes have recently seen completion or are nearing completion, includ ing Basecamp Aarhus, Colosseum, Blækhuset and La Tour Towers, which are specifically tailored to meet the students’ demand for small-sized units with access to a range of com munal facilities and convenience offerings. The concept is also called micro living. However, despite a long period when even the most standard-quality residential properties were leased up, the Aarhus residential letting market remains buoyant, except that landlords are now increasingly required to meet ten ant requirements if they are to attract tenants. In autumn 2022, several landlords of such relatively uniform property schemes in more secondary locations tried to “lure” ten ants by not charging any deposits and offering a couple of rent-free months or a gift voucher for interior design. Con versely, differentiated residential newbuilds in more prime locations attract sustained strong tenant demand. “Differen tiated” in this context denotes bespoke concepts that appeal to a specific target group or offer a unique building design. However, differentiated concepts alone do not cut it, as an attractive location is a key determinant of both success and demand. In other words, location remains an important parameter for demand and for the readiness to pay (rent), even for differentiated residential concepts. For several years, Aarhus had a shortage of rental housing, with mainly the influx of young students driving demand. However, a prolonged period of brisk newbuilding activity has reduced this shortage, seeming- ly restoring the supply and demand balance in the letting market.

completed in 2022 (Q1-Q4)

312,265 sq m residential completions in 2022 (Q1-Q4)

74 sq m Average residential unit size

89.73% Tenant share

6.11% Average residential vacancy rate

Note : The three bottom figures denote average data on multi- storey apartment blocks in the City of Aarhus.

Source : Colliers, Statistics Denmark.