Colliers Denmark Market Report 2025

COLLIERS MARKET REPORT D E NM A R K

HOTEL INDUSTRI & LOGISTIK RETAIL BOLIG KONTOR INDUSTRIAL AND LOGISTICS RESIDENTIAL OFFICE

BEST REAL ESTATE ADVISOR ‘The company that achieved outstanding success for its business and clients through its provision of strategic and financial planning and portfolio management.’

CATEGORY ‘Best Real Estate Advisor’ Colliers globallly

Colliers Denmark

CATEGORY ‘Best Real Estate Advisor’

Colliers EMEA 1

CATEGORY ‘Best Real Estate Advisor’

1. EMEA: Europe, Middle East, Africa

Colliers Nordics

CATEGORY ‘Best Real Estate Advisor’

Colliers named Best Real Estate Advisor in Denmark, the Nordics, Europe and globally

We are proud that Euromoney in 2024 named Colliers the winner of the Best Real Estate Advisor category on both a global and European level, but not least also in Denmark, Sweden and Norway. Published since 1969, the leading magazine annually recognises the best players in the real estate industry in areas such as property development, legal advice, auditing, financing and advisory services. This year, a jury at Euromoney has assessed the participants based on their own candidacy, market data and interviews with both the participants, customers and other peers and references in the market. We are pleased to maintain and expand our position from 2023, when Colliers also won the categories ‘Best Agency for Research’ and ‘Best Real Estate Advisor’ in the Nordic region as well as the award as the most successful advisor in the global commercial property market.

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COLLIERS MARKET REPORT 2025

When we launched last year’s report, we expected the sharp slowdown in transactions in the sec ond half of 2022 to be replaced by renewed activity by the end of 2023. That did not happen, and 2023 instead saw the lowest transaction activity in nine years. In January 2024, we launched a collaboration with a number of Denmark’s other commercial prop erty agents, enabling us to determine the transaction volume in the commercial property market in detail. Industry data from Erhvervsmæglernes Branchedata show that the 2024 volume some what exceeds the level in 2023, but that a significant increase in transaction activity has been delayed by more than two years. Interest rate arrow pointing downwards However, there are now clear signs that we can see light on the horizon for 2025. This is because inflation is widely expected to be under control as the pace of the European economy, and not least the German economy, has found a new cadence. The interest rate arrow is therefore pointing downwards, which is good news. At the same time, financial institutions expect growth in Denmark to exceed 2% over the next few years. With the prospect of continued low inflation and low unemployment, this is good news for underlying oper ations and returns on commercial property such as offices, industrial/logistics properties and retail. Real wages are rising, house prices will increase moderately, and we have a surplus in pub lic finances, not to mention a huge current account surplus. All of this, combined with a large own er-occupied housing stock, creates favourable conditions for a strong rental market. Activity is on the rise Our recommendation is therefore that now is the time to seize the opportunities for a good invest ment. You have already taken the first step with Colliers Market Report. In the residential section, for example, you can read why we see the potential for some of the most attractive investments in this segment in the coming years, especially in Greater Copenhagen. We believe we have the best insights to help you on your way. So does Euromoney, which in 2024 recognised Colliers as the best advisor in Denmark and across the Nordic region. And in Europe and globally. A recognition - not only of our local market position and competences - but also of our strong collaboration across regions and borders. We look forward to a new dawn in the commer cial property market in 2025, when we will support the growing investor interest with sustainable advice, innovative solutions and a continued focus on high customer satisfaction. A new dawn in the Danish commercial property market

HOTEL INDUSTRIAL AND LOGISTICS RETAIL RESIDENTIAL OFFICE

February 2025

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

Accelerating success.

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COLLIERS MARKET REPORT 2025

Executive summary

Residential segment still investors’ top pick, in particular Greater Copenhagen newbuilds Brisk investment activity in the industrial and logistics market supported by strong user market Limited office transaction activity in 2024, but better times ahead Small signs of recovery in otherwise frozen retail transaction market Broad investor demand for hotel properties, with renewed interest from institutional investors

DENMARK

14 % Office 50 % Residential 9 % Retail 25 % I&L

DKK 52bn

1 % Hotel 1 % Other

GREATER COPENHAGEN

14 % Office 61 % Residential 7 % Retail 16 % I&L

DKK 31bn

1 % Hotel 1 % Other

Note: Transaction volume by segment, 2024. Source: Erhvervsmæglernes Branchedata, Colliers

Continued low transaction volume in 2024

120

100

80

60

40

20

0

15

16

17

18

19

20

21

22

23

24

Greater Copenhagen

Denmark, excluding Greater Copenhagen

Note: Transaction volume (DKK billion) for investment properties in Denmark. The dashed horizontal line indicates the average transaction volume in Denmark in the period 2015-2024. Source: Erhvervsmæglernes Branchedata, Colliers

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COLLIERS MARKET REPORT 2025

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The international investors remained cautious in 2024

DENMARK

GREATER COPENHAGEN

61 % 2023: 67%

36 % 2023: 36%

39 % 2023: 33%

64 % 2023: 64%

DOMESTIC

INTERNATIONAL

INTERNATIONAL

DOMESTIC

Transaction volume by risk profile, top-4 Danish property segments: Value-add properties accounted for larger share of transaction volume in 2024

OFFICE

RESIDENTIAL

42 % Core

65 % Core

6 % Opportunistic 20 % Value-add 31 % User

7 % Opportunistic 28 % Value-add

RETAIL

INDUSTRIAL AND LOGISTICS

53 % Core

53 % Core

1 % Opportunistic 26 % Value-add 20 % User

2 % Opportunistic 38 % Value-add 7 % User

Note: Top two figures show transaction volume by investor origins. Bottom four figures show transaction volume by risk profile for specific segments of the Danish commercial property market. Transaction volume, Denmark, 2024. Source: Erhvervsmæglernes Branchedata, Colliers

The transaction data in this report is based on a coordinated statement from a number of leading Danish commercial property agents.

Accelerating success.

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COLLIERS MARKET REPORT 2025

01 02 04 06

Letter from Colliers CEO

Executive summary

Contents

Danish investment market Transaction market still weak in 2024, but Q4 saw signs of recovery Nordic overview Transaction activity picking up across the Nordics Office Residential Retail Industrial and logistics Hotel

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22 38 54 66 82 92

Danish economy Stable economy that outgrows eurozone and other Nordic economies Market practices

CON TENTS

102 103 104

Definitions

About Colliers

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COLLIERS MARKET REPORT 2025

54 66 82 38 22

OFFICE Slow transaction market, but recovery on the way

HOTEL INDUSTRIAL AND LOGISTICS RETAIL RESIDENTIAL OFFICE

RESIDENTIAL Demographic changes create new housing needs

RETAIL Is the retail sector finally on track for recovery?

INDUSTRIAL AND LOGISTICS The market is on its way to stabilisation

HOTEL Solid and optimistic Danish hotel market at year-start 2025

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COLLIERS MARKET REPORT 2025

INCREASED TRANSACTION ACTIVITY AND ESPECIALLY Q4 FUELLED OPTIMISM FOR 2025 INTERNATIONAL INVESTORS MADE A STRONG COMEBACK IN H2 2024 AND ARE EXPECTED TO ONCE AGAIN ACCOUNT FOR 50% OF TRANSACTIONS IN 2025 CORE CAPITAL IS EXPECTED TO RETURN IN EARNEST AS INTEREST RATES STABILISE VALUE-ADD AND OPPORTUNISTIC FUNDS CAPITALISED ON MARKET UNCERTAINTY IN 2024

MARGINAL POSITIVE CAPITAL GROWTH DRIVEN BY SIGNIFICANT RENT INCREASES DANISH INVESTMENT M

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COLLIERS MARKET REPORT 2025

HOTEL INDUSTRIAL AND LOGISTICS RETAIL RESIDENTIAL OFFICE

MARKET

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COLLIERS MARKET REPORT 2025

Transaction market still weak in 2024, but Q4 saw signs of improvement Continued economic uncertainty and high market interest rates dominated much of 2024 and dampened transaction activity. After the summer, long-term interest rates fell due to anticipated ECB rate cuts and generally less macroeconomic turmoil, fuelling optimism and whetting investor appetite in the final months of the year. This bodes well for 2025.

In Denmark, the transaction volume ended at DKK 52 billion in 2024, which is still low, but some what above the level in 2023, when there was a significant slowdown. 2024 was characterised by significant caution among both buyers and sellers, who were often far apart on price expectations. The first six months of the year in particular were characterised by uncertainty and a wait-and-see attitude among investors.

After the summer, a drop in interest rates and generally less economic turmoil contributed to a gradual revitalisation of the market. Mainly Q4 2024 saw a significant increase in activity levels. The

Continued low transaction volume in 2024

120

100

80

60

40

20

0

15

16

17

18

19

20

21

22

23

24

Greater Copenhagen

Denmark, excluding Greater Copenhagen

Note: Transaction volume (DKK billion) for investment properties in Denmark. The dashed horizontal line indicates the average transaction volume in Denmark in the period 2015-2024. Source: Erhvervsmæglernes Branchedata, Colliers

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COLLIERS MARKET REPORT 2025

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RESIDENTIAL REMAINS THE LARGEST SEGMENT

residential segment stood out as the most sought-af ter segment among investors, accounting for 62% of the transaction volume in the quarter. Especially Greater Copenhagen residential investments were in demand due to expectations of continued growth in market rents. Major transactions included the residential prop erties Rødovre Port in Rødovre and Lyskilden in Herlev. The office segment, however, remained challenged and contributed only 14% of the total transaction volume, which is significantly lower than the average of approx. 23% in 2013-2023. In contrast, the industrial and logistics segment equalled its record from 2023 by again account ing for 25% of the total volume, confirming its position as one of the most sought-after segments. This develop ment is driven by strong supply and demand dynamics and expectations of further rent increases in prime loca tions. One example is Brunswick’s sale of a portfolio of 14 light industrial properties in Greater Copenhagen to Blackstone/Mileway. With the positive momentum in the last quarter of the year, the prospects are bright for 2025. Lower mar ket interest rates and greater predictability can stimu late stable and healthy activity in the transaction mar ket. Residential as well as industrial and logistics are expected to remain the leading segments, while office is expected to see a gradual improvement in demand after an extremely challenging year. International investors were selective but made a strong comeback at the end of 2024 In 2024, international investors accounted for 39% of the total transaction volume in the Danish property market. However, an analysis of their activity across segments shows that they have been selective. In the office market in particular, international investors have remained on the sidelines, accounting for just 10% of the transaction volume, compared to 31% in the resi dential property market and 66% in the industrial and logistics market. A closer analysis of the year’s transactions shows that international investors have gradually increased their activity during the year. In the first six months, 69% of investors were domestic and 31% international, while in the final six months, the distribution changed to 55% domestic and 45% international.

14 % Office 50 % Residential 9 % Retail 25 % I&L

1 % Hotel 1 % Other

INTERNATIONAL INVESTORS SELECTIVE IN 2024

61 % DOMESTIC

39 % INTERNATIONAL

VALUE-ADD SHARE UP FROM 21% IN 2023

57 % Core 29 % Value-add 6 % Opportunistic 8 % User

Note: Total transaction volume 2024, Denmark, by segment, investor origins and risk profile. Source: Erhvervsmæglernes Branchedata, Colliers

This shift reflects a renewed appetite for investment among foreign investors. As inflation and fears of an overheating economy have been replaced by falling market interest rates and a stable economy, there is rea son for optimism. International investors are therefore expected to become active again in the Danish prop erty market in 2025, as Denmark is often seen as a safe haven for investment.

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COLLIERS MARKET REPORT 2025

TOP 5 transactions | All segments

PROPERTY

LOCATION

SELLER

BUYER (COUNTRY)

TYPE

SQ M PRICE 1

ENERGY LABEL

Mossvej 27-29

Horsens

DSV

Catena (SE)

I&L

315,000

3,300

A2015

Goldman Sachs / Gefion Group

VIGA RE (DK/CH) / Pictet Asset Mgmt (CH) Velkomn / Matter Real Estate (GB)

Rødovre Port

Resi

37,000

na

A2015

Rødovre

Resi

57,000

1,299

A2015

Velkomn portfolio 2

Zealand / Jutland Birch Ejendomme

Pears Global Real Estate (GB)

Copenhagen / Zealand

Resi

50,000

~1,250 3

Pears portfolio 2

KNURS Foundation

Multiple

A-Huset

B

Copenhagen S

Highbrook Investors

NREP (DK)

Resi

24,000

+1,050 3

Note: 1 Prices quoted in DKKm (rounded figure). 2 Portfolio sale. 3 Estimated. Source: Colliers

Slump in capital allocated to the core segment

Having reached a historical high in 2021, allocated cap ital to the core segment of the European property mar ket has since experienced a dramatic decline. In 2023, the allocation reached its lowest level since 2012, only mar ginally improving in 2024. The drastic decline began dur ing a period of economic uncertainty when high inflation and rising interest rates dominated the macro economy. During this period, bonds became more attractive and as their risk profile is in many ways comparable to the core segment of the property market, a significant portion of core capital was reallocated to the bond market instead. At the same time, rising interest rates drove up financing costs, rendering it more difficult to find properties that fit the segment’s risk profile and can deliver the neces sary returns. Looking at the post-2010 period, there is a clear nega tive correlation between interest rates and the amount of core capital allocated to the property sector. In the years following the financial crisis, when interest rates peaked in 2011, an extremely modest amount of capital was allo cated to the core segment. As interest rates began to decrease after 2011, the core segment became attrac tive again as the bond market became less competitive

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COLLIERS MARKET REPORT 2025

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Limited amount of core capital

300

0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%

250

200

150

100

50

0

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Core capital, DKKbn (l.a.)

Long-term interest rate, eurozone (r.a., inverted)

Increase in risk-tolerant capital

800

700

600

500

400

300

200

100

0

10

11

12 13

14

15

16

17

18

19

20

21

22 23

24

Value-add/opportunistic capital, DKKbn

Note: Capital allocated to the European property market (dry powder), DKK billion. The long-term interest rate is based on the interest rate on 10-year government bonds in the eurozone and is constructed by Eurostat. Core capital is made up of allocated capital for both the core and core+ segments. Data from RealFinX is limited as it only consists of private property funds and therefore excludes e.g. direct investments made by pension funds and private property companies. Source: RealFinX, Eurostat, Colliers

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COLLIERS MARKET REPORT 2025

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COLLIERS MARKET REPORT 2025

HOTEL INDUSTRIAL AND LOGISTICS RETAIL RESIDENTIAL OFFICE

Core capital on the sidelines Domestic pension funds have historically played a cen tral role in allocating core capital to the Danish property market. Their long-term strategy differs from value-add funds, which have a shorter time horizon. This could have been an opportunity for pension funds to take advantage of declining property prices in 2023 and 2024 without running quite the same risk of ‘bad timing.’ However, many pension funds remained hesitant, partly due to a falling stock market that skewed their portfolios and created a perception of overexposure in the property sector. At the same time, the bond market, which had lost its appeal for many years in the zero interest rate environ ment, became attractive again due to rising interest rates. This change has marked a shift in the allocation of risk averse pension capital, which was previously directed more towards alternative asset classes because bonds could not deliver the required return. With rising interest rates and a more competitive bond market, it was natu ral that some of their available capital found its way back into bonds, despite reasonable investment opportunities in the property sector. Swedish investors, previously very active in the Danish core segment, have been hit extremely hard in recent years. Falling prices in their domestic market and more expensive financing through corporate bonds hampered their activity in Denmark. In 2024, however, the mar ket has stabilised and Swedish real estate companies are once again trading at market values that reflect the value of their underlying property portfolios, while capi tal inflows have reopened and the unsecured corporate bond market has become liquid again. We have seen some divestment by Swedish investors in Denmark over the past year but expect Swedish property companies to be net buyers in 2025. Prospects for recovery in 2025 After two years with an extremely limited amount of allo cated core capital, we expect the core segment to see a renewed increase in allocated capital in 2025, accelerating

in terms of risk-adjusted returns. Especially in the post 2018 zero interest rate environment, significant amounts of capital were allocated to the core segment. However, this development came to an abrupt halt with the sharp rise in interest rates in spring 2022. Increased allocation of risk-tolerant capital The amount of capital allocated to the property mar ket across all risk profiles decreased significantly in 2023. However, it started to increase again in 2024. This increase is mainly due to an increased allocation of risk-tolerant capital, including value-add and oppor tunistic capital, which can better navigate an uncertain market. Core capital, on the other hand, is characterised by a low risk tolerance and a long time horizon, with real estate investments often acting as a bond substitute. Therefore, core capital has historically been attractive during periods of low and stable interest rates. Return on equity requirements for the core segment, including core+, are typically in the 3-9% range, and this type of capital often requires the investment to generate cash flow to pay regular dividends. Value-add or opportunistic capital operates with a higher risk tolerance and typically a shorter time hori zon, where the strategy focuses more on creating quick value through active ownership, which is why these types of funds typically have a predetermined time hori zon of 6-10 years. Their return on equity requirements are typically in the range of 10-20% or more, and typi cally with no requirement for regular dividends. The core segment relies on long-term security and sta ble cash flows, but rising financing costs and increased volatility in the property market have limited the num ber of attractive investment opportunities. As core inves tors retreat, the value-add segment can capitalise on the opportunities that arise as yield requirements increase due to lower demand. Part of the value-add investors’ strategy in this case will be to anticipate future yield compression, creating added value and enabling the necessary return on equity. In short, the increased mar ket risk opens up for acquisitions of property assets that in a functioning, liquid market would often end up with core investors.

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COLLIERS MARKET REPORT 2025

0.57%. The figures hide a remarkable dynamic: although increases in yield requirements in isolation reduced property values by 5.49% and a slight increase in vacancy contributed to a negative impact of 0.18%, these effects were offset by significant rental growth that contributed positively by 6.24%. This result testifies to a robust market where improved operating income - driven by rent increases - has ensured stable property values despite yield decompression. High employment and a stable economy provide favourable framework conditions for the Danish property rental mar ket, which is once again showing positive trends in the form of low vacancy rates. Especially in light of the geopolitical and macroeconomic turmoil that has marked recent years, the Danish commer cial property market appears relatively resilient, which has helped boost investor confidence despite the uncertainty that has characterised the property market during 2024.

Elmehuset, Ballerup

in 2026. In the eurozone and Denmark, long-term inter est rates moved down in 2024, especially towards the end of the year, providing a much better starting point for the property market in 2025. However, falling interest rates are initially favourable for existing bond investors as they can make capital gains. At the same time, the bond market will remain attractive for new investments as long as fur ther interest rate reductions are expected. Core investors are therefore likely to start reallocating capital towards alternative asset classes such as real estate only when interest rates stabilise. We expect a gradual recovery in core capital in 2025, which will really accelerate in 2026 when interest rates are expected to stabilise. The combination of stable economic conditions, lower financing costs and reduced competition from the bond market will create ideal conditions for attracting low risk capital back into the property market. The Danish economy is strong compared to many other European countries, and as interest rates stabilise, the frame work conditions for the Danish property market will become even more attractive. This is also expected to be reflected in property investors’ yield requirements as we predict slight yield compression in 2025 in the most sought-after segments. Positive total return despite increasing yield requirements In 2024, the overall total return for commercial prop erty was 5.15%, driven primarily by an average income return of 4.58%. Capital growth is marginally positive at

Marginal positive capital growth driven by significant rent increases

8%

6%

4%

2%

0%

-2%

-4%

-6%

- 8%

Income return

Capital growth

Rental growth

Total return

Yield decompression

Increase in vacancy

Note: Decomposition of total return, commercial property, Greater Copenhagen. Source: Colliers

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COLLIERS MARKET REPORT 2025

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Why a commercial property price index?

The past two decades have seen an increased inflow of capital into invest ment property as real estate is increasingly seen as an attractive alternative to stocks and bonds.

In 2024, Greater Copenhagen investment properties experienced yield decompression but positive total returns due to operational improvements in terms of rental growth. While stocks and bonds are easily priced, investment properties are far more diverse products and

are rarely traded. However, the Colliers property price index provides a solution to this challenge by using data that includes both transactions and property valuations as a substitute for actual transactions.

Commercial property offers attractive risk-adjusted returns

2024

2015-2024

Return

Mean return

Risk

Commercial property, Greater Copenhagen 1

5.15%

8.38%

5.00%

S&P Denmark, government bonds

3.29%

0.04%

7.32%

MSCI Denmark, stocks

-12.6%

13.8%

23.1%

Note: Average total return and risk on commercial property, bonds and stocks. 1 Please note that the Colliers commercial property price index is based on market observations made throughout the entire year, and therefore the calculated return indicates a mean value for the year compared to the mean value for the previous year. Source: S&P Global, MSCI, 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 6,700 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.

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

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

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COLLIERS MARKET REPORT 2025

NORDIC OVERVIEW

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COLLIERS MARKET REPORT 2025

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COLLIERS MARKET REPORT 2025

DK

Robust economic growth contributes to healthy tenant demand Transaction volume remains low, but higher activity forecast for 2025

Rødovre Port, Greater Copenhagen

Residential rental property | 37,000 sq m Colliers Denmark

NO DENMARK

SE

FI

Lower international investor presence, which has been a key driver in recent years Slow economic recovery and a 14% drop in transaction volume

The market is driven by domestic capital , but the share of foreign ac quisitions has returned to pre-pan demic levels Transaction volume up by an impressive 71%, driven mainly by high-volume transactions

Increased acquisition activity among listed property companies , ac counting for 28% of all acquisitions Transaction volume increased to SEK 134bn, but is s till below the 20-year average

Portfolio located in Örebro, Gävle, Karlstad, Sundsvall, Umeå, Växjö, Visby, Linköping, Lund and Kiruna

Luvalahdentie 2, Eura

Stortorvet 7, Oslo

Industrial/logistics | 55,000 sq m Colliers Finland

Student housing | 72,000 sq m Colliers Sweden

Office | 32,700 sq m Colliers Norway

SWEDEN

FINLAND

NORWAY

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COLLIERS MARKET REPORT 2025

Transaction activity picking up across the Nordics

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Finland DKK 18.2bn -14%

Norway DKK 48.6bn +71%

Sweden DKK 87.5bn +41%

Nordics DKK 206.4bn +32%

Denmark DKK 52.1bn +16%

Note: Top figure is transaction volume in 2024. Bottom figure indicates relative change (%) in transaction volume in 2024 on 2023. Source: Erhvervsmæglernes Branchedata (for Denmark), Colliers

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COLLIERS MARKET REPORT 2025

Nordic overview

TOP 5 transactions | All segments

PROPERTY/PORTFOLIO

COUNTRY SELLER

BUYER

TYPE

SQ M PRICE, BN CURRENCY

Sweden/ Denmark

K-Fastigheter

Brinova

Residential

304,400

~10.8

SEK

Swedish/Danish portfolio

Norway

Entra

Reitan Eiendom

Office

187,000

~6.5

NOK

Trondheim portfolio

Norway

KMC Properties

Logistea

I&L

526,000

~5.7

SEK

100% shares in KMC Properties

Denmark DSV

Catena

I&L

315,000

~3.3

DKK

Logistics facility, Horsens

60% shares in Svenska Nyttobostäder

Sweden

ALM Equity

Aermont Capital

Residential 1

138,000

~5.0

SEK

Note: 1 Plus residential building rights. Source: Colliers

Nordic transaction activity, 2015-2024

80

70

60

50

40

30

20

10

0

15

16

17

18

19

20

21

22

23

24

Sweden Norway Finland

Denmark

Note: Transaction volume quoted in EUR billion. The broken horizontal line denotes average transaction volume in the Nordics in 2015-2024. Source: Erhvervsmæglernes Branchedata (for Denmark), Colliers

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COLLIERS MARKET REPORT 2025

HOTEL INDUSTRIAL AND LOGISTICS RETAIL RESIDENTIAL OFFICE

Nordic transaction activity by segments, 2023 vs. 2024

23

25%

22%

8%

30%

15%

24

27%

31%

11%

19%

13%

23

34%

20%

12%

14%

20%

24

38%

9%

14%

23%

16%

24 Norway Sweden Finland Denmark Nordics 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 11% 11% 13% 9% 10% 11% 19% 5% 16% 14% 23% 25% 19% 26% 41% 50% 27% 28% 19% 24% 25% 25% 24% 22% 33% 34% 5% 2% 16% 14% 23 24 23 24 23

Office

Resi

Retail

Industrial/logistics

Other

Note: The “Other” category includes e.g. hotels and properties let to public-sector tenants. Source: Erhvervsmæglernes Branchedata (for Denmark), Colliers

Oslo Opera House

John Petersson Associate, Capital Markets I Stockholm john.petersson@colliers.com

Gregers Nytoft Rasmussen Director and Head of Research I Copenhagen gregers.nytoft@colliers.com

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OFFICE - COLLIERS MARKET REPORT 2025

LIMITED OFFICE TRANSACTION ACTIVITY IN 2024, BUT BETTER TIMES AHEAD HOMEWORKING DOES NOT REDUCE NEED FOR OFFICE SPACE , BUT PUTS NEW DEMANDS ON OFFICE DESIGN LESS FREQUENT HOMEWORKING ACROSS EUROPE, ESPECIALLY IN DENMARK COPENHAGEN OFFICE MARKET FAVOURED BY STRONG UNDERLYING DRIVERS INTERNATIONAL INVESTORS EXPECTED TO RETURN IN 2025, WITH A FOCUS ON COPENHAGEN

OFFICE

23

OFFICE - COLLIERS MARKET REPORT 2025

HOTEL INDUSTRIAL AND LOGISTICS RETAIL RESIDENTIAL OFFICE

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OFFICE - COLLIERS MARKET REPORT 2025

Office summary

TRANSACTION VOLUME DKK BILLION

In 2024, the Danish office investment market was still characterised by low activity, mainly due to economic uncertainty and a limited presence of foreign investors. Despite an increasing share of homeworkers, office vacancies in Denmark remain generally low due to the lower frequency of working from home. Copenhagen stands out with low office vacancy rates and strong growth in office employment. At the same time, construction activity here is significantly reduced - a phenomenon that intensifies competition for the most attractive leases. The office investment market is expected to regain momentum in 2025, driven by increasing interest from international investors. Mainly the most liquid assets, includ ing prime Copenhagen property, will be in demand.

7

4

DENMARK

GT. COPENHAGEN

Office transaction volume in Denmark, hereof Greater Copenhagen, DKKbn

SHARE OF TOTAL TRANSACTION VOLUME

14 % DENMARK 14 % GT. COPENHAGEN

GRÅT SKÆRES FRA

Office’s share of total transaction volume, Denmark and Greater Copenhagen, respectively, %

Prime office yield remains unchanged - secondary yields are on the rise

0% 1% 2% 3% 4% 5% 6% 7% 8%

SHARE OF FOREIGN INVESTORS

10 %

15 %

16

17

18

19

20

21

22

23

24

25

DENMARK

GT. COPENHAGEN

Aarhus C, prime Copenhagen, CBD, prime

Copenhagen, CBD, secondary Aarhus C, secondary

Note: Based on transaction volume for office in 2024, Denmark. Source: Erhvervsmæglernes Branchedata, Colliers

Note: Net initial yields, office. Source: Colliers

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OFFICE - COLLIERS MARKET REPORT 2025

TOP 5 TRANSACTIONS

HOTEL INDUSTRIAL AND LOGISTICS RETAIL RESIDENTIAL OFFICE

. 1

. 3

. 4

. 2

. 5

01 02 03 04 05 NAVITAS 1 PORCELÆNSHAVEN 2 KALVEBOD BRYGGE 47-51 3 LANGELINIE ALLÉ 31-35 BORUPS ALLÉ 177 4 BUYER: BUYER: BUYER: BUYER: BUYER: AAA United CapMan Danish Building and Property Agency TN Udvikling City of Copenhagen LOCATION: LOCATION: LOCATION: LOCATION: LOCATION: Aarhus C Frederiksberg Copenhagen V Copenhagen Ø Copenhagen NV

ADDRESS:

ADDRESS:

ADDRESS:

ADDRESS:

ADDRESS:

Inge Lehmanns Gade 10

Porcelænshaven 16A

Kalvebod Brygge 47-51

Langelinie Allé 31-35

Borups Allé 177

PRICE DKKM | AREA SQ M:

PRICE DKKM | AREA SQ M

PRICE DKKM | AREA SQ M:

PRICE DKKM | AREA SQ M:

PRICE DKKM | AREA SQ M:

na | 38,800

590 | 19,300

550 | 14,100

325 | 16,000

318 | 26,000

Note: 1 Photo made available by INCUBA. 2 Photo made available by CapMan. 3 Photo made available by Danish Building and Property Agency. 4 Photo made available by ATP Ejendomme.

26

OFFICE - COLLIERS MARKET REPORT 2025

Slow transaction market, but recovery on the way Investors remained guarded in the office market in 2024, with foreign inves tors in particular staying away from the Danish market. In the office seg ment, the fear of prolonged vacancy has further increased investor caution.

Is homeworking really a threat to the market? The COVID-19 pandemic’s forced lockdowns and fur loughs really put homeworking on the agenda in Denmark. Working from home is still part of the culture in most workplaces. The proportion of Danes working from home has increased from around 35% to over 40% since the begin ning of 2022, yet office vacancy in Denmark has remained

The growing popularity of working from home has led to a shift in the way people work, causing turmoil in office markets around the world. Since the beginning of 2022, several German cities have seen significant increases in vacancy levels. Similar trends are seen in several US cities and parts of London, where working from home is a widespread phe nomenon and office vacancies are at record highs.

GRÅT SKÆRES FRA

More Danes are working from home, but less frequently

50%

40%

30%

20%

10%

0%

20 19 Frequently Occasionally

21

22

23

24

Note: Proportion of employed people aged 15-64 who work from home, by frequency of working from home. ‘Frequently’ includes people who worked from home more than half of the days in a 4-week period. ‘Occasionally’ includes people who worked from home at least once in a 4-week period and less than half of the days. Source: Statistics Denmark, Colliers

27

OFFICE - COLLIERS MARKET REPORT 2025

HOTEL INDUSTRIAL AND LOGISTICS RETAIL RESIDENTIAL OFFICE

Det Gule Pakhus, Svendborg, Funen

stable at a low level over the same period and we have not seen a decline in office space consumption by busi nesses. This is partly because today only 7.5% of Danes work from home frequently – a significant drop from over 14% in early 2022. More people are working from home occasionally, but with homeworking days only occuring occasionally, businesses still need to maintain a buffer of workspaces to ensure the office can handle full attend ance. After COVID-19, there was a tendency to use remote working as a direct replacement for physical attendance. However, it has since become apparent that a lot of idea exchange and knowledge sharing is lost if all employees work too much from home. We are now seeing a clear trend that companies want employees back in the office again. To support this trend, it is crucial that the office offers something that the home office cannot.

Office location and accessibility are still key factors, but there is an increased focus on office design and function ality. Breakout rooms, quiet rooms and social areas are becoming increasingly important in modern office spaces. Tenants are increasingly looking for spaces that not only support knowledge sharing and social interaction, but actively promote and encourage it. Against the backdrop of recent years’ increase in office employment, the changing need for space has put upward pressure on companies’ space consumption. We expect this trend to continue into 2025. Therefore, we do not believe that homeworking poses a threat to the office market as it is often portrayed. On the contrary, we see homeworking as a necessary and strate gic tool for companies in their efforts to attract and retain employees.

28

OFFICE - COLLIERS MARKET REPORT 2025

Danish office market is strong, also by international standards The decreasing frequency of working from home is not only a Danish phenomenon but is a general trend across the EU. This should be seen as a positive signal for the European office mar ket, possibly contributing to reducing vacancy risk. However, Denmark stands out with the largest overall increase in homeworking, but also by far the largest decrease in Homeworking frequency going down across Europe

Development in share of people working from home, 2022-2023

Occasionally Frequently In total, percentage

17%

4%

-6%

FINLAND

5%

1%

18%

frequent homeworking. This shows that Danish companies are far ahead in the process of get ting employees back in the office - at least most of the time.

-17%

3%

NORWAY

-17%

46%

SWEDEN

32%

7%

9%

-10%

7%

IRELAND

0%

-31%

DENMARK

GRÅT SKÆRES FRA

-16%

THE NETHERLANDS

11%

14%

-1%

2%

-9%

GERMANY

-13%

BELGIUM

17%

7%

3%

0%

-14%

-13%

AUSTRIA

FRANCE

10%

16%

1%

6%

-13%

-3%

ITALY

SPAIN

Note: Development in homeworking, 2022-2023. ‘Frequently’ includes people who worked from home more than half of the days in a 4-week period. ‘Occasionally’ includes people who worked from home at least once in a 4-week period and less than half of the days. Source: Eurostat, Oxford Economics, Colliers

29

OFFICE - COLLIERS MARKET REPORT 2025

HOTEL INDUSTRIAL AND LOGISTICS RETAIL RESIDENTIAL OFFICE

Favourable outlook for the Copenhagen market

Taking a closer look at Copenhagen and comparing it to other European cities, an anal ysis of the underlying drivers of the office market shows that Copenhagen is favoured by a positive outlook.

Office employment in Copenhagen is expected to grow until 2028, even at a higher annual growth rate than in many other European cities. The low proportion of frequent home workers in Copenhagen indicates an increasing demand for office space in the coming years, as most new employees in a workplace are expected to have a high degree of physical presence in the office, which will put further upward pres sure on companies’ space require ments. In addition, Copenhagen has a low office vacancy rate and is therefore the only major city that can be placed in the blue area of figure 2. This com bination indicates that the growth in office employment will increase the demand for new office space in Copenhagen, as the existing supply cannot accommodate the growth to the same extent as in other cities. Many of the current vacancies are in outdated premises that do not fulfil today’s requirements, which further supports the expectation of increa sed demand for modern and newly built office space in Copenhagen.

35%

Low growth and high share of frequent homeworkers

High growth and high share of frequent homeworkers

HELSINKI

30%

DUBLIN

25%

STOCKHOLM

BRUSSELS

BERLIN

FRANKFURT

20%

0%

0.5%

1.0%

VIENNA

1.5%

2.0%

2.5%

15%

HAMBURG

MUNICH

AMSTERDAM

MADRID

PARIS

COPENHAGEN

OSLO

10%

ROME

BARCELONA

5%

High growth and low share of frequent homeworkers

Low growth and low share of frequent homeworkers

0%

FIGURE 1 . Note: Share of frequent homeworkers, % (y-axis) vs. the expected annual growth in office employment in the period 2024-2028, % per year (x-axis). Source: Eurostat, Oxford Economics, Colliers

Low growth and high vacancy rate

High growth and high vacancy rate

20%

18%

DUBLIN

16%

HELSINKI

14%

STOCKHOLM

12%

BARCELONA

MADRID

0%

0.5%

1.0%

1.5%

2.0%

2.5%

PARIS

FRANKFURT

8%

MUNICH

ROME

BERLIN

COPENHAGEN

6%

BRUSSELS

OSLO

AMSTERDAM

HAMBURG

4%

VIENNA

2%

High growth and low vacancy rate

Low growth and low vacancy rate

0%

FIGURE 2. Note: Vacancy level, % (y-axis) vs. the expected annual growth in office employment in the period 2024-2028, % per year (x-axis). Source: Eurostat, Oxford Economics, Ejendomstorvet.dk, Colliers

30

OFFICE - COLLIERS MARKET REPORT 2025

Sharp drop in office construction from 2021 to 2024, Copenhagen

20 21-22

20 23-24

Stagnation in office construction Despite the prospect of employment growth and low vacancy levels in Copenhagen, speculative office con struction has slowed considerably. Rising construction costs, more expensive construction financing and espe cially increasing yield requirements have made it difficult for developers to make speculative office construction profitable. This has caused a slump in construction activ ity, with the volume of office construction initiated in the period Q4 2022 to Q3 2024 representing only 28% of the volume in the previous 24 months. Developers require a certain occupancy rate before they can start construction. At the same time, it is a challenge to find tenants who are willing to commit to a pre-let agree ment as it typically takes 30-36 months from signing a lease to moving in. This creates a problem that will proba bly only be solved when office development becomes sig nificantly more profitable - for example, through increas ing rent levels and/or lower yield requirements. The significant slowdown in construction activity, com bined with the strong underlying drivers of office demand in Copenhagen, is expected to intensify competition for the most attractive leases. This could potentially drive up rent levels even further, ensuring continued low office vacancy in the years ahead.

123,000 sq m

436,000 sq m

Note: Building starts for office, retail, warehouse, public administration, etc., Copenhagen proper, Q4 2020 – Q3 2024, sq m. Source: Statistics Denmark, Colliers

GRÅT SKÆRES FRA

Havneparken 1, Vejle

Hejrevej 26-30, Copenhagen NV

31

OFFICE - COLLIERS MARKET REPORT 2025

HOTEL INDUSTRIAL AND LOGISTICS RETAIL RESIDENTIAL OFFICE

Tenancies of the future: ESG on the agenda

The growing interest in green property and sustainability is putting ESG on the agenda for both tenants and landlords. Among tenants, there is a greater expectation that properties meet high ESG standards, documented through certifications such as LEED, BREEAM or DGNB. Green leases are becoming a key tool to ensure that property operations meet both regulatory requirements and market expectations.

Leases typically include require ments for data exchange for report ing, management of renewable energy sources and common targets for reducing resource consumption. This not only supports sustainable development, but also creates trans parency and consistency in tenant and landlord sustainability efforts. With the EU CSRD directive, sus tainability reporting became a legal requirement for many compa nies and their suppliers from 2024. Landlords should therefore include clear ESG clauses in their contracts to stay competitive and ensure

properties remain attractive to com panies with stricter reporting and sustainability requirements. Older office spaces face significant challenges. Many leases will require extensive energy optimisation and updates to meet tenant requirements, supporting their net-zero ambitions. In some cases, the high costs can make it difficult to justify the invest ment in the short term, but without the necessary ESG measures, land lords risk their properties becom ing stranded assets difficult to lease and sell.

For both tenants and landlords, ESG is no longer just about following trends, but about futureproofing a position in the market. Green leases are a strategic solution that not only ensures compliance with stricter legislation, but also con tributes to long-term value and sus tainable development. Early investments in ESG can there fore be crucial to maintain the attractiveness of properties and ensure that they meet the stricter demands of legislation, tenants and capital providers.

32

OFFICE - COLLIERS MARKET REPORT 2025

Yield compression observed in several European capital cities

Helsinki A: 5.25% B: DKK 3,625 C: 1.55% D: 0.25 ppts

A. Net initial yield, NIY (start-2025) B. Rent level (start-2025) C. Rental growth, CAGR, 2020-2025 D. Change in NIY, 2024-2025

Oslo A: 4.50% B: DKK 4,225 C: 3.65% D: -0.25 ppts

Stockholm A: 4.10% B: DKK 5,925 C: 2.36% D: -0.15 ppts

Amsterdam A: 5.25% B: DKK 4,475 C: 5.23% D: -0.25 ppts

GRÅT SKÆRES FRA

Berlin A: 4.90% B: DKK 4,675

C: 5.51% D: 0 ppts

Paris A: 4.00% B: DKK 8,200 C: 5.05% D: -0.15 ppts

Madrid A: 4.50% B: DKK 3,450 C: 1.64% D: -0.20 ppts

33

OFFICE - COLLIERS MARKET REPORT 2025

HOTEL INDUSTRIAL AND LOGISTICS RETAIL RESIDENTIAL OFFICE

Aalborg A : 5.75% B : DKK 1,225 C : 4.14% D: 0.25 ppts

Aarhus A: 5.00% B: DKK 1,700

C: 3.23% D: 0 ppts

Copenhagen A : 4.00% B : DKK 2,300

C : 2.33% D: 0 ppts

Triangle Region A : 6.25% B : DKK 1,350

Odense A : 6.25% B : DKK 1,350

C : 3.26% D: 0 ppts

C : 1.55% D: 0 ppts

Note: Prime net initial yields, office (as of start-2025) and prime CBD office rent levels (as of start-2025) in selected cities in Denmark and the rest of Europe. Yields quoted for Amsterdam, Berlin and Helsinki are gross yields. Rent levels quoted in DKK per sq m p.a., excluding operating costs. Please note that area specifications vary from country to country, with rent levels therefore not strictly comparable. CAGR calculated based on rent per sq m in local currency to allow for exchange rate fluctuations. Source: Colliers

34

OFFICE - COLLIERS MARKET REPORT 2025

Activity in the Danish office investment market contin ued to be slow in 2024 with a transaction volume of DKK 7.3 billion, again placing the segment as only the third largest after residential and industrial/logistics. The low activity is still largely due to limited activity among international investors, who only accounted for 10% of the year’s total transaction volume in the Danish office investment market. Nevertheless, the second largest office transaction of the year was completed by a foreign investor when CapMan bought the Porcelænshaven property in the Copenhagen district of Frederiksberg for DKK 590 mil lion at the beginning of the year. However, the property was acquired for CapMan’s social infrastructure fund, and the transaction is therefore subject to different dynamics than apply to a traditional office property. In general, large office transactions were scarce, and sev eral of the largest deals were made by buyers for their Brighter outlook for investment market

Svanevej 20, Copenhagen NV

GRÅT SKÆRES FRA

Office transaction volume buoyed by acquisitions of properties for owner-occupation

35%

25

30%

20

25%

15

20%

15%

10

10%

5

5%

0

0%

18

19

20

21

22

23

24

Share purchased by end-user (r.a.)

Transaction volume, office (l.a.)

Note: Transaction volume, office, DKK billion (l.a.), hereof share purchased by end-user, % (r.a.). Source: Erhvervsmæglernes Branchedata, Colliers