Colliers Denmark Market Report 2024

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INDUSTRIAL & LOGISTICS - COLLIERS MARKET REPORT 2024

The industrial and logistics segment continues to be char acterised by historically low vacancy rates despite a slight increase since the record low vacancy levels in 2022. The vacant premises are largely either older and outdated buildings or properties with secondary locations, e.g. far from major cities and the motorway grid. In contrast, contemporary and well-located premises are in high demand and have virtually no vacancies. This is especially true for logistics properties in the so-called south corridor (Køge-Høje Taastrup) near Copenhagen and in the Triangle Region, which are logistics hubs. The low vacancy rate also applies to slightly older but well-lo cated properties, especially in the metropolitan area, which can be used for last mile distribution. Higher rent levels in 2023 - and 2024 Throughout 2023, the industrial and logistics segment has been characterised by high demand and brisk new building. Despite the strong increase in supply, rents have risen in several locations. In addition to the high demand, this is partly due to rent adjustments in 2023, which were based on the historically high inflation fig ures from 2022, but also because newly built and mod

ern logistics properties are generally better and more efficient than before, which in isolation contributes to higher rent levels. In addition to the above drivers of rent levels, we have highlighted the following trends or dynamics in the sup ply-demand balance: In recent years, there have been very limited opportuni ties to increase the supply of last mile properties in the suburbs of Copenhagen and Aarhus, partly because old industrial areas are gradually being transformed into res idential neighbourhoods. Locations near densely popu lated and high-income areas are attractive, and this has resulted in upward pressure on rents. We believe that the conversion of older industrial areas into housing in Copenhagen and Aarhus suburbs will continue in the long term, despite increases in yield requirements and construction costs. In particular last mile facilities around Copenhagen, e.g. Brøndby/Glostrup/Herlev and Avedøre, have experienced a sharp increase in rent levels. In the south corridor, which is a prime location for logis tics, recent years have seen further expansion of exist -

Continued low vacancy rates

7%

6%

5%

4%

3%

2%

1%

0%

15 14 Greater Copenhagen

16

17

18

19

20

21

22

23

Aarhus

Triangle Region

Note: Vacancy rates, industrial and logistics. Source: Ejendomstorvet.dk, Colliers