Colliers Denmark Market Report 2025

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RESIDENTIAL - COLLIERS MARKET REPORT 2025

Residential segment is investor favourite

In the Danish investment market, the residential segment remains investors’ favourite segment. Especially in 2024, Greater Copenhagen has cemented its position as the most attractive investment area in the residential mar ket – and the property market in general. As described, the area has favourable prospects for market rent increases, partly because of strong population growth and the knock-on effect of supply/demand dynamics in Copenhagen. Mainly contemporary, newly built residen tials - both apartment blocks and terraced houses - in attractive municipalities neighbouring Copenhagen are attracting capital. Activity outside the metropolitan area, on the other hand, is driven to a greater extent by small and medium-sized local investors and a few institutional investors, typically domestic, with a national focus. Because of the above supply and demand dynamics in the rental market, a significant shift in 2024 was the stronger appetite of domestic and international institutional inves tors for Greater Copenhagen residential newbuilds, with these investors having previously favoured other seg ments. This shift in investor behaviour is partly due to the fact that investments in office properties have been

increasingly rejected as more uncertain due to devel opments in office markets abroad, having experienced an increasing share of homeworking in the wake of the COVID-19 pandemic and resulting office vacancies. We expect residential property investments in Copen hagen and Greater Copenhagen to intensify further with increasing capital inflows. We therefore foresee increas ing activity in the market, including a return to forward purchase transactions, driven by yield compression due to falling interest rates and the prospect of strong rental growth. In the longer term, we expect the competition for Greater Copenhagen residential investment properties to make institutional investors consider other geographical areas such as Aarhus and regional growth cities. Overall, we see sound investment opportunities in the residential seg ment, especially in the metropolitan area, for domestic and international investors alike. The low supply of attrac tive residential newbuilds in the short term, combined with increasing demand, may well herald increased com petition in the residential property investment market.

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