Colliers Copenhagen Property Market Report 2019

Industrial & logistics – Market Report 2019

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Slight decline in volume of transported goods Despite employment growth in the transport sector, 2018 saw a slight decline in the volume of transported goods and logged distance in kilometres relative to 2017. Both figures plummeted after the onset of the financial crisis in 2008, but have since stabilised. Greater Copenhagen transport sector prospers In Greater Copenhagen, the volume of goods transported by road has been increasing for the past five years, except for dip in from 2016 to 2017, which is not believed to have any significant impact on vacancy rates and rent levels as demand remains strong. Relative to the volumes recorded in 2009, the volume of goods transported by road to and from Greater Copenhagen have increased by 31% and 28%, respectively. Large-scale facilities in prime locations are in demand Historically, there has been no shortage of land, in theory making it more economically feasible to construct new facilities in one of the newly developed commercial districts with motorway access than to convert or upgrade existing outdated facilities. However, this is no longer the case as there is an emerging shortage of available top locations in terms of motorway proximity, demands of high-rise building (2- or 3-storeyed logistics facilities are the future) and the potential of creating a hub to cover an entire region such as the Nordics. In addition, the trend is also in favour of fewer, but larger storage and logistics facili- ties to cater to regional demands, possibly complemented by smaller satellite facilities to handle last mile distribution. In other words, there is increased focus on securing the best possible locations, both from a user and an investor perspective. In the Copenhagen area, the so-called south corridor is a logistics location that has the facilities and land to meet these demands. With the best possible locations becoming scarce, state-of-the-art and well-located storage and logistics facilities are expected to benefit from stable rental growth and low vacancy risk. In this respect, such prime facilities stand out from the common building stock in this segment, which will continue to be more susceptible to general economic activity and developments. South corridor ideal for developments The south corridor, stretching from Køge to Høje-Taastrup, offers ideal development sites with easy motorway access (E20), connecting to Copenhagen, remaining Zealand, Funen, Jutland as well as Sweden and Germany. In addition, the corridor’s local plan provi- sions are fully aligned with today’s demands, facilitating the development of top-modern industrial and logistic facilities. Local authorities are business-friendly, some earmarking sites for industrial and logistics newbuilding. For instance, the Municipality of Køge is offering multiple plots of land as industrial and logistics development sites. In Greve, Greve Distribution Center (GDC) is one of the newest distribution centres in the south corridor. Situated on a 23-ha site in a location ideally suited for a storage or logistics hub, GDC is designed to meet future demands for flexible warehousing facilities, offering premises in the 10,000-100,000 sqm range.

The amount of goods transported to and from Greater Copenhagen continues to make up a considerable part of total transported goods in Denmark

20% of 174K tons

58% of 0.9K tons

92% of 0.3K tons

17% of 12K tons

Source: Statistics Denmark