Colliers Denmark Market Report 2025

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