Colliers Denmark Market Report 2024

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COLLIERS MARKET REPORT 2024

HOTEL INDUSTRIAL & LOGISTICS RETAIL RESIDENTIAL OFFICE

Why a commercial property price index? Over the past two decades, an increasing amount of capital has been reallo cated to investment properties as real estate as an asset class is seen as an attractive alternative to stocks and bonds.

While commercial property in the Greater Copenhagen area has seen the lowest total return since the finan cial crisis in 2023, this asset class has historically deliv

ered the best risk-adjusted return compared to stocks and bonds. Commercial property therefore remains an attractive asset class despite the low total return in 2023.

Lowest total property return since the financial crisis

2023

2000-2023

Return

Mean return

Risk

Sharpe ratio

Commercial property, Greater Copenhagen 1

-0.55%

9.2%

6.2%

1.10

Nordea benchmark 7-year bonds

7.77%

4.1%

6.4%

0.25

MSCI Denmark Gross Total Return Index

32.1%

15.3%

25.0%

0.51

Note: Average return and risk on commercial property, bonds and stocks. 1 Please note that the Colliers property price index is based on observations record ed throughout the whole year and therefore the return computed is an average across the year compared to the average across the previous year. Source: MSCI, Nordea, Colliers

Model and approach

For both the Colliers property price index (capital growth) and the net initial yield calculations, we have used a hedonic multi ple regression analysis based on empirical data collected from more than 6,500 property sales and property valuations in the

Greater Copenhagen area since 1985, all involving Colliers (pre 2018, Sadolin & Albæk). The model covers all types of com mercial property, where individ ually fixed prices are applied for the various property character istics, mainly location, use, state

and condition/quality, suitabil ity/rationality and economies of scale, as a corrective measure to account for the differences between individual properties.

Ahmad Raad Senior Associate I Valuation & Advisory ahmad.raad@colliers.com

Victor Staun Jensen Associate I Valuation & Advisory victor.jensen@colliers.com

Kristian Axel Nielsen Senior Director I Capital Markets kristianaxel.nielsen@colliers.com