Colliers Denmark Market Report 2025

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RETAIL - COLLIERS MARKET REPORT 2025

The Copenhagen and Aarhus high streets - markets in transition In recent years, the high-street retail markets of Copenhagen and Aarhus have become a tenant’s market, and this trend continued in 2024. High rent levels, rising vacancy rates and stagnant demand have forced landlords to offer more flexible and incentivised contracts to attract tenants. This has put ten ants in a better position. Negotiations take longer and even minor lease terms and conditions have become sig nificant. However, we still find that there is a demand for high-street leases if the terms are right. Tenants have a strong focus on lease overheads, includ ing tenant incentives in relation to their potential reve nue, also known as the revenue burden. Turnover bur den is a key metric, with tenants in prime locations often willing to pay 17-20% of turnover in rent as it is consid ered an investment in brand and visibility. With weak consumer spending in recent years, tenants are finding it harder to factor in rising revenue expecta tions. Combined with high rent levels, this has increased revenue pressures and made it more difficult for ten ants to deliver sustainable retail operations in high-street locations. If the trend is to be reversed in 2025 and beyond, we believe that rent levels along certain high-street stretches should be reduced. Temporary rental discounts and short non-terminability periods are not enough to compensate for the fact that rents may be too high considering the exposure, facade width and flexibility or lack thereof. This

Skolegade, Aarhus C

may force some landlords to compromise on their origi nal business plans for the properties, but it is worth con sidering if now is the time to stabilise the properties in a still challenged retail market.

Fact box

Vacancy halved on the Aarhus high street, Strøget. Read also the Danish article on Colliers’ website, which states that the retail market in Aarhus is showing signs of recovery, especially in the city’s popular high-street locations. https://www.colliers.com/da-dk/nyheder/omgan gen-paa-retail-lejemaal-halveret-paa-stroeget-i-aarhus