Colliers Denmark Market Report 2024

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COLLIERS MARKET REPORT 2024

HOTEL INDUSTRIAL & LOGISTICS RETAIL RESIDENTIAL OFFICE

A good start to 2024

2023 was a strange year. It began with the highest inflation in 40 years, even before the town hall bells rang in the year. Central banks carried out rate hikes in both Europe and the US, and investors, who had shattered all records and cham pagne corks just 12 months earlier, watched stock markets plummet while hibernating in fear of catching a falling knife. At the same time, Denmark celebrated record-high employ ment and rock-solid public finance results. The crisis did not come, and the underlying operations that guarantee the income return on investment properties enjoyed good con ditions throughout the year. Denmark had landed in a calm environment, in the eye of the hurricane, so to speak, while our closest European neighbours saw major fluctuations in their economies of all kinds. Rising interest rates and tighter bank lending policies had an impact on buyers’ return expectations. The market’s return expectations have been slow to adjust in Denmark compared to other European markets, but prices in the property invest ment market have now fallen for two years in a row. And there are signs that we are looking at an improvement in the fixed income markets, where long-term interest rates are sta bilising or edging down slightly, and where we may see a sig nificant drop in short-term interest rates as 2024 wears on. Have we reached the bottom of the real estate market? Probably we have. In any case, the biggest concern for 2024 is no longer rising yield requirements due to rising interest rates but rather whether strong employment is a lasting phe nomenon and investors will become more active. The world has become more complex The world as we know it, especially from the 2010s, with lin ear development and stable framework conditions, has been

replaced by exponential, technological development and extremes. In the span of just a few years, we have had to deal with a global health crisis, climate crisis, energy crisis, interest rate crisis, wars and inflation, while new property valuations and stricter requirements from finance providers have made it more complex to figure out the right investment. Meanwhile, artificial intelligence is knocking on the door, threatening to turn our work habits upside down. ESG is becoming crucial, unless you ask a former president who may be on his way back to the US. I’ve said it before, but it seems to get truer every year: to suc cessfully navigate the Danish investment property market, you need to be aware of both the global currents and local trends that affect the demand for real estate, whether you’re an investor in Kolding or Copenhagen. It’s complex, but in that complexity lies a head start for those who understand its components. In 2024, the interest rate market will be less important than investors’ ability to iden tify the properties that are most in demand in terms of loca tion and quality. Not just by investors and capital, but most of all by the users and tenants who will pay the rent. And it will be crucial that investors are able to operate and develop the properties so that they will continue to meet the users’ needs for a more sustainable future. That’s why we don’t just call ourselves commercial property agents, we call ourselves experts. Because a sound invest ment requires expertise, insight, and overview. It requires collaboration and relationships.

The Colliers Market Report is our best effort. I hope it gives you a good start on the investment property market in 2024.

February 2024

Carsten Gørtz Petersen Partner and CEO (MRICS) carsten.goertzpetersen@colliers.com

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