Colliers Market Report Denmark 2023

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Residential - Colliers Market Report 2023

Hotel I ndustrial & logistics Retail Residential Office

Trend: Appetite diminished for portfolios ...

Single assets in focus On the threshold of 2022, the market was characterised by intense competition for a scarce supply of assets, and mainly portfolios of residential properties attracted sub stantial investor interest. The combination of the possi bility of minimising transaction costs and the possibility of building scale at once was appealing to many inves tors with large placement requirements. Portfolios often traded at a premium or higher price relative to the sum of-the-parts market values of the individual properties. Today, most investors have, however, changed focus, prompted by uncertainty concerning macroeconom ics, property pricing mechanism, etc. As a result, port folio premiums have gradually evaporated: Investors are more wary for fear of making investments when the market is peaking and putting all their eggs into one bas ket. However, we believe that the current market situa tion can quickly turn around, provided inflation is quelled and interest rates drop, that is, when stable market con ditions are restored along with (greater) pricing consen sus. This could potentially trigger a ketchup effect, with vast amounts of capital being deployed rather than wait ing on the sidelines like now, and with a market abound ing with investors ready to strike.

Kr.

... growing for single assets

Kr.

Foreign investor predominance in the Danish residential property segment in 2022

Clear overrepresentation of core investments in residential transactions in 2022

83% Core

Vaue add 16% Value-add

Risk profile

core 1% Opportunistic

42 % Domestic

58 % International

Note: Transaction volume in Denmark, residential, by investor origins and risk profile, 2022. Source : Colliers

Simon Krogh Nøhr Manager | Valuation & Advisory simon.kroghnohr@colliers.com