Colliers Denmark Market Report 2024

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RESIDENTIAL - COLLIERS MARKET REPORT 2024

Since the spring of 2022 with the outbreak of the war in Ukraine, rising interest rates, higher inflation and signif icantly increased construction costs, many investors in the Danish residential property market have been more cautious and many have changed their focus area. Before the crisis, international core investors had moved out of Copenhagen by also focusing on Greater Copenhagen and the city of Aarhus. However, this is no longer the case, as international core investors are now back to the starting point of their investment criteria, namely a focus on good locations in Copenhagen proper. Most core investors are now focusing on the best locations, and we believe that they will only on a moderate scale zoom in on suburban locations in the short term. Before the crisis, core+ investors were interested in for ward trades due to the potential for higher returns. However, their focus is now mainly on standing assets. Geographically, core+ investors have also generally shifted their focus from more peripheral locations in Denmark back to the capital region. Investors have changed their geographical focus

The more risk-tolerant value-add investors are still inter ested in forward trades but are finding it difficult in today’s market to reconcile their investment case with their return requirements and the prices demanded by sellers. This is also one of the main reasons why the forward market has stalled. Value-add investors are now primar ily interested in standing assets with development poten tial in growth areas. These are believed to benefit from greater rental potential and lower yield requirements as local markets stabilise. In uncertain times of high inflation and volatile interest rates, investors are looking for ‘safe haven’ investments in segments such as residential property. Of course, this assumes that they can reach an agreement with the seller on prices that meet their return requirements. We therefore continue to see interest from both domestic and international investors in standing properties with the right volume in well-established districts of Greater Copenhagen and Aarhus.

Key investment transactions

PROPERTY

TYPE 1

LOCATION SELLER

BUYER (COUNTRY)

SQ M PRICE 2

YIELD 3

ENERGY LABEL

1,240 ~4.20% 5

A Copenhagen SV NREP

CapMan (FI)

28,500

A2015

Køhlers Have

For-profit assisted living facilities 4

A Multiple

NREP

Northern Horizon (FI)

40,800

~1,225 5

4.20%

Multiple

Quantum Immobilien (DE)

Beckmanns Tårn & Vilhelm Hus

B Copenhagen V Carlsberg Byen

20,200

~1,075 5

~4.00% 5

A2020 5

Brønshøj (Copenhagen)

De Forenede Ejendomsselskaber

~ 850 5

A

DWS Group (DE)

21,000

~4.00% 5

na

Kobbelvænget

Strunges Hus & Mørchs Hus

~ 620 6

A Copenhagen S Bella Kvarter

Caisse des Dépôts (FR)

13,400

~4.00% 5

A2020

B Aalborg Ø

Søren Enggaard

BlackRock (US)

23,000

+500 6

na

A2020 5

Gigantium district

A Silkeborg

Brdr. Lund Invest

Koncenton (DK)

13,490

~270 5

~5.25% 5

A2015

Fårdalen

Danish Student Residential JV Co

A Valby

VIGA RE (DK/CH)

7,400

~250 5

~4.25% 8

C

Gammel Jernbanevej 27 7

3 cost-regulated (OMK) properties 4

C Copenhagen K P+

K.W. Bruun Ejd. (DK)

7,920

227

na.

C

Bonum Development, Lars Svensen & SEBC

Walter Immobilien (DE)

B Frederiksberg

3,600

~180 5

~3.75% 5

A2020 5

Kong Georgs Vej

Note: 1 Type denotes (A) open market rent, standing asset, (B) open market rent, off-plan sale, (C) cost-regulated rent control. 2 Prices quoted in DKK million (rounded). 3 Yield in this context denotes estimated direct yield (approximate figure). 4 Portfolio. 5 Estimated or expected. 6 Indicative due to confidentiality. 7 Mixed use residential/commercial. 8 The yield only involves the student housing component and is estimated by Colliers. Source: Colliers