Colliers Copenhagen Property Market Report 2019

Aarhus in brief – Market Report 2019

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LOCATIONS AARHUS IN BRIEF Read more

Aarhus in brief

Stabilised housing market Residential construction has been surging in the City of Aarhus for years, in particular in central city districts, spurred by strong demand for rental and ownership housing alike. As at end-2018, we therefore believe the supply and demand balance to have been restored. Given a substantial pipeline of new housing, we expect to see increased compe- tition for both tenants and homebuyers in the market. Following several years of sustained increases, rental prices have now stabilised, with some areas already witnessing or expected to witness a slight downtrend due to the anticipated new supply hitting the market in the years ahead. Shortage of attractive office premises puts rents under pressure The last five years in particular have seen an unprecedented surge in the demand for central housing, prompting a widespread commercial-to-residential conversion trend. This transformation is one of the factors that has contributed to reducing office supply in the Aarhus city centre. The combination of reduced office supply and steadily mounting demand for up-to-date office premises has driven up office rents, in 2018 standing at DKK 1,400 per sqm p.a., excluding operating costs and taxes. Office vacancy rates are low all over the city, and existing vacancies typically fail to meet today’s standards. Aarhus attracts an increasing number of businesses and investors As Denmark’s number two city, Aarhus has succeeded in attracting business newcomers. As a result, the city has seen strong job growth, also in the industrial sector. Combined with strong activity in the transport and service trade sectors, this growth has driven down vacancy rates to a historical low in the market for industrial/logistics property. In recent years, Aarhus has attracted mounting foreign investor demand. In the investment property market, demand is expected to remain strong for office and industrial/logistics properties as well as both old-stock and new-stock residential properties.

Aarhus – Denmark’s second largest city

The Central Denmark Region (Region Midtjylland) 345,755 Population (1 Oct. 2018) Aarhus continues to grow and develop at a rapid pace, in 2018 welcoming more than 5,000 new residents. Over the next ten years, the population is expected to grow by some 30,000 according to Statistics Denmark

Note: Population figure for City of Aarhus. Source: Statistics Denmark

 JOSEPH ALBERTI, joseph.alberti@colliers.com

For an introduction to various Aarhus districts, please refer to the extended online edition of this Market Report, www.colliers.dk

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