Colliers Market Report Denmark 2023

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Retail - Colliers Market Report 2023

Hotel I ndustrial & logistics Retail Residential Office

Investors in standby position on the sideline Investment activity in the retail market remains sluggish as investors have become more discerning or particu lar. In addition, it has become more difficult to procure financing for retail property acquisitions with uncertainty building in terms of rent level and vacancy. However, massive placement requirements drive sustained inves tor demand, with active investors including funds that have raised capital. Broadly speaking, demand has become more fragmented than was previously the case as investors want to carefully pick and choose the invest ments best aligned with their strategy. In times of uncertainty, we often see flight-to-safety, with investors zooming in mainly on well-located low-risk assets. This is also reflected in the yield spread between prime versus secondary retail property, which is expected to widen in the upcoming months due to the wait-and see sentiment in the market.

ants are financially strong and non-terminability peri ods long, although this type of property has seen a rise in yield requirements, too. In spring 2022, Cibus Nordic Real Estate acquired a major supermarket portfolio of more than 76,000 sq m, illustrating the continued inves tor appetite for this asset type. In December 2022, Rema 1000 took over 114 Aldi stores as Aldi decided to exit the Danish market. Similarly, properties in prime locations continue to attract investor demand because of moderate vacancy risk. One example is the sale of Galleri K in central Copenhagen in spring 2022, albeit this mixed-use retail and office complex traded before interest rates and inflation really took off. Investors with a retail focus are expected to remain active in the market but to be more discerning. Well-located properties in major Danish towns and cities will remain in demand. The same applies to properties let to tenants that have signed long lease agreements and sell grocer ies, which will always be in demand, even in times of crisis.

In terms of grocery and big-box stores, single-asset and portfolio sales continue to take place provided ten

International investors predominated the retail segment in 2022

Increase in user investments driven by few high-volume transactions in 2022

42% Core

13% Value-add

Risk profile

1% Opportunistic

Domestic 37 %

63 %

44% User

International

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

Simon Jacobsen Senior Associate | Valuation & Advisory simon.jacobsen@colliers.com