Focus Report Copenhagen - Colliers Denmark 2025

OFFICE - COLLIERS FOCUS REPORT COPENHAGEN 2025

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Change in historical demand Historically, the lettability of minor office spaces of around 200 sq m has been strong. However, this has changed, and in particular, it has become more difficult to let small office units in older buildings that fail to offer any kind of services. This may indicate that small companies increasingly prefer flexible solutions in shared serviced offices or coworking office spaces, whereas larger companies want to bring their employees together in one place while securing space for future growth in new premises. In recent years, several service-focused shared or coworking office spaces have successfully established themselves in the Copenhagen office market. Regus, Ordnung and SOHO have been well-known players in this field for a long time, but others have followed suit along the way, including Nreps's Woods and PFA's The Union. Part of the explanation may also be that tenants have a strong desire to rent premises that meet their code of conduct, including ESG requirements. Some leases are actively deselected if they do not meet the ESG require ments set by the company. ESG requirements are easier to meet in newer serviced office spaces or multi-user office buildings.

However, Finnish CapMan accounted for the largest transaction in 2024 by investing in Porcelænshaven 16A in Frederiksberg. However, the property was purchased for CapMan's social infrastructure fund, and the deal is therefore subject to different dynamics than a traditional office investment. Despite the decline in activity, part of the transaction volume was buoyed by an increased share of acquisitions of properties for owner-occupation, with more investors than before buying office properties for their own use. In 2024, the total office transaction volume in Copenhagen and Greater Copenhagen amounted to DKK 4.55 billion, of which user properties accounted for approx. 37.5%. Two examples of this were the Danish Building and Property Agency's acquisition of Kalvebod Brygge 47-51, Copenhagen V, and the City of Copenhagen's acquisition of Borups Allé 177, Copenhagen NV. In 2023, properties acquired by end-users accounted for just 2.24% of the transaction volume, which means that there has been a large increase in the owner-occupancy segment in just 12 months. The office investment market is still characterised by highly selective investors. Core investors focus exclu sively on office properties in prime locations in central Copenhagen (CBD). It is our assessment that the low competition in the office market has had a negative impact on the pricing of the completed transactions, in favour of the buyer. In Greater Copenhagen, value-add assets attract stronger demand than core+ assets due to the lower pricing in central Copenhagen. Going forward, we expect a gradual improvement in transaction activity in the Copenhagen office property market. Unlike in recent years, both domestic pension funds and international investors, including German and Swedish investors, are showing renewed interest in office investment properties in central Copenhagen locations. We continue to believe that core investors will not be expanding their geographic focus to include Greater Copenhagen, which will help dampen activity levels in non-CBD locations. 2025 will hardly be a golden year but less will suffice after the recent lean years.

Slower sales activity and higher share of owner-occupancy

In 2024, the Copenhagen office investment property market continued to be characterised by low activity, especially as international investors remained cautious.

It is less expensive to rent an office in Copenhagen than in many other European cities

CITY

RENT LEVEL, START 2025

Copenhagen, prime

2,300

Madrid

3,450

Helsinki

3,625

Oslo

4,225

Amsterdam

4,475

Berlin

4,675

Stockholm

5,925

Paris

8,200

Note: Rent levels quoted in DKK per sq m p.a., exclusive of operating costs. Area specifications differ across countries, with rent levels therefore not strictly comparable. Source: Colliers