Colliers Denmark Market Report 2025

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Bolig - Colliers Markedsrapport 2023 RESIDENTIAL - COLLIERS MARKET REPORT 2025

Investors starting to realise the potential of divestment strategies

The difference between the square metre price of a rental unit and an owner-occupied unit must typically be around 20-25% before the relevant investors can achieve a satisfactory return by pursuing a divestment strategy. The margin requirement depends, among other things, on investors’ assumptions in terms of churn rate and running yield, along with their confidence in a continued favourable trend in the owner-occupied market and the investor’s risk profile. To understand why there can be up to a 25% difference in the prices of owner-occupied units and rental units, it is first important to know how the price per square metre for rental and owner-occu pied properties varies according to unit sizes. The achievable rent per square metre for residential rental units typically decreases as the unit size increases. The same trend is not seen to the same extent for own er-occupied units. A comparison of the trend lines for

owner-occupied versus rental units (the dark blue and light blue dashed lines in the below figure, respectively) shows that the price per square metre for owner-occu pied apartments only decreases very slightly as the unit size increases, while the trend line for rental units is clearly negatively correlated with an increase in unit size. Therefore, in the case of larger unit sizes, you typically find the widest spread between the prices of rental and owner-occupied units. The fundamental difference in how the price per square metre for owner-occupied versus rental units devel ops with increasing unit size is not a new phenomenon. However, because of the strong growth in owner-occu pied unit prices relative to the trend in residential rental prices, investors are increasingly considering buying resi dential rental properties with a view to selling off individ ual units provided the units are sufficiently large.

GRÅT SKÆRES FRA

Price spread most prenounced on large rental and owner-occupied units

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Owner-occ., price per s qm Rental, price per sq m

Linear (Owner-occ., price per s qm) Linear (Rental, price per sq m)

Note: Movements in the prices of rental vs. owner-occupied residential units across various unit sizes, DKK per sq m, based on ordinary open market sales in the Copenhagen district of Valby in 2023-2024, properties built after 2010. The development in price per sq m for rental housing is based on Colliers’ estimates of market rents, operating costs, and yields. We have chosen Valby to illustrate the difference in sensitivity to larger unit sizes, but the same trend can be seen in other markets. Source: Boliga.dk, Colliers