Colliers Denmark Market Report 2024

Nørreport

54

Tenants stronger in high-street locations

The high streets of Copenhagen and Aarhus have increas ingly become a tenant’s market. Landlords in virtually all rental cases have to go to great lengths to meet tenant demands, and in both cities tenant incentives such as rent-free periods and interior design subsidies are being negotiated. In contrast, rent itself is rarely a major topic of discussion in Copenhagen due to a solid rental mar ket, while rent levels are more frequently a point of nego tiation in Aarhus, even in the best high-street locations. Our assessment is that the further from the largest cit ies you go, the stronger the tenants are, partly because there are fewer potential tenants, for example from large chains. Against the backdrop of rising interest rates and high inflation, many had feared increased vacancy on the traditionally highest-rent high streets. So far, however, vacancy rates have not skyrocketed, and inflation seems to be back under control. However, the danger cannot be completely eliminated because the effects of interest rate hikes are not yet fully felt and could hit in 2024. Stable Copenhagen market In uncertain times, retail tenants often look for the best locations with high visibility. This is also the case now, as the capital’s prime locations continue to benefit from rel atively low vacancy rates and strong demand.

One of the reasons is that more brands are choosing to relocate. Instead of having two stores in close proximity to each other, many are opening flagship stores where they are willing to pay a higher rent due to better loca tion and often better interior design, which may result in lower staffing levels. Smaller premises are experiencing good demand in almost the entire high-street area. On the other hand, larger and less efficiently designed leases remain vacant for longer periods of time – this is especially true for the part of Købmagergade closest to Amagertorv. This is also a result of companies focusing more on costs, and the willingness to pay for “dead” square metres in the larger leases is decreasing dramatically.

The shops in the high-street district rely heavily on tour ists, and there were more of them in 2023 than in 2022.

Overall, throughout 2023, the district has had stable rent levels for prime locations in a market where retailers oth erwise face several challenges.

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F r e de r i k s be rgg a de

Rådhuspladsen (City Hall Square)