Copenhagen Property Market Report 2020

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Copenhagen Property Market Report 2020

Yield requirements lower in the CBD Foreign investors with an appetite for Denmark prefer properties of a certain volume, often with a CBD location and let on long leases. Such criteria narrow down the field quite considerably. Recent years’ brisk activity in the foreign investor community has served to intensify competition for the right properties even further, driving down yield requirements to an unprecedented low. There are no signs of weakening competition for centrally located properties let on long leases, in fact quite the opposite. We foresee that some top-quality office properties will trade at yields as low as 3.50%, 150 bps below the level recorded five years ago. spree in Denmark by acquiring Kalvebod Brygge 32 near the Copenhagen waterfront in the CBD for turnkey delivery, anchored by e.g. Kammeradvokaten (legal adviser to the Danish government) on a long lease. In addition, Norwegian KLP acquired the 38,350 sq m Deloitte head office, DeloitteHuset, mainly on account of the building design and quality as well as the prime location at Islands Brygge, with easy metro access etc. Both domestic and foreign investors will continue to have substantial placement requirements. Together with low interest rates and a limited supply of office investment properties, this leads us to expect a sustained downward pressure on yield requirements in the CBD. Two of the most prominent transactions in 2019 reflected the trends mentioned above. Swedish Klövern continued its investment

Lavere afkastkrav i CBD Udenlandske investorer med interesse for Danmark foretrækker ejendomme af en vis størrelse, ofte med beliggenhed i CBD og med lange lejekontrakter. De ønsker betyder, at udbuddet er meget begrænset. De seneste års store aktivitet blandt udenlandske investorer har øget konkurrencen om de ”rigtige” ejendomme yderligere, og det har udløst historisk lave afkastkrav. Intet tyder på, at konkurrencen efter centralt placerede ejendomme med lange lejekontrakter skulle blive mindre – nærmest tværtimod. Vi forventer, at nogle af de bedste kontorejendomme vil blive handlet med afkast ned til 3,50%, hvilket er 150 basispoint lavere end for fem år siden. To af de mest markante transaktioner i 2019 er præget af ovenstående tendenser. Svenske Klövern fortsatte sine danske investeringer ved at købe Kalvebod Brygge 32 på Københavns havnefront i CBD til nøglefærdig levering med blandt andre Kammeradvokaten på en lang lejekontrakt. Derudover købte norske KLP det 38.350 kvadratmeter store DeloitteHuset – handlen var dér primært drevet af bygningens design og kvalitet samt den gode beliggenhed på Islands Brygge, tæt på blandt andet metro. Både danske og udenlandske investorer vil fortsat have store placeringsbehov, og kombineret med lave renter og begrænset udbud af kontorejendomme forventer vi et fortsat nedadgående pres på afkastkravet i CBD.

OFFICE HOTEL RETAIL INDUSTRIAL REGIONS RESIDENTIAL

International investor appetite remains strong in the office segment

Core investments continue to push out value-add and opportunistic investments

66% Core 27% Value-add 3% Opportunistic 4% User

Domestic 34%

66% Foreign

Note: Office transaction volume by investor origins. Office transaction volume, Greater Copenhagen. Source: Colliers

Note: Office transaction volume by investment type. Office transaction volume, Greater Copenhagen. Source: Colliers