Colliers København Delrapport 2023 UK

INDUSTRIAL & LOGISTICS

Golden year for industrial and logistics

Overall, the industrial/logistics market in and around Copenhagen is highly heterogenous, with substantial variations in the quality of the building stock and in achievable rent levels. To provide an introduction to the market, the following therefore includes an overview of key industrial and logistics locations in Greater Copenhagen. Viewed as a whole, the area around Copenhagen, mainly the so-called south corridor, is considered one of two primary logistics locations in Denmark, with the Triangle Region being the other.

In 2022, the Copenhagen market for industrial/logistics facilities witnessed massive occupational demand and ex- ceptionally limited supply, mainly in terms of newbuilds. This supply/demand imbalance has translated into record low vacancy rates across the entire segment. The year’s strong economic activity was reflected in historically high industrial output levels. In addition, in the aftermath of the coronavirus pandemic and the outbreak of the Russo- Ukrainian war, Danish businesses have faced rallying freight prices along with supply chain disruptions and a slowdown in consumer spending. As a result, supply chain risk

management has become a focal point, with insourcing, for instance, coming to the fore. By the same token, just-in-time and similar principles have therefore given way to a push for larger buffer stocks to reduce the risk of non-delivery. In addition, the record-high activity level has increased the demand for upscaling production facilities, building buffer stocks and more up-to-date equipment and automation in general, which has served to further fuel the demand for new, large-scale and contemporary lease premises. On the supply side, the shortage of commercial development sites, high construction costs and a rise in financing costs were factors that significantly stunted newbuilding in 2022. In addition, the conversion of former industrial areas around Copenhagen for residential use has gradually reduced exist ing supply. In 2022, we therefore saw intense competition for mainly space-efficient and contemporary lease premises in strategic locations, but also a positive spill-over effect on even outdated premises in secondary locations. Vacancy rates in and around Copenhagen remain histori cally low, and given the moderate pipeline of new supply, vacancy rates are expected to remain very low in 2023. Every cloud has a silver lining In 2022, the Danish industrial/logistics market was boosted by strong employment figures and record-high output lev els. However, as recession is looming in Europe and the USA, it is only natural to expect a drop in employment along