Focus Report Copenhagen - Colliers Denmark 2025

RESIDENTIAL - COLLIERS FOCUS REPORT COPENHAGEN 2025

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have a high churn in the property so that the homes can be sold within the desired timeframe. Finally, a well-func tioning divestment strategy requires a reasonable running yield to ensure that a satisfactory loan-to-value ratio can be achieved. The difference between the square metre price of a rental property and an owner-occupied property must typically be around 20-25% before the relevant investors can achieve a satisfactory return by pursuing a divestment strategy. In 2024, the investment market was characterised by investor caution and economic uncertainty, especially in the first six months of the year. However, in H2 2024, falling interest rates and a more stable economic situ ation sparked renewed investment activity. The resi dential segment maintained its position as the most attractive segment, accounting for 62% of the total trans action volume in Q4 2024. Mainly the demand for Greater Copenhagen residential investment opportunities picked up in 2024. A cocktail of strong population growth and Greater Copenhagen dominates investment market

limited new construction has created a solid foundation for sustained increases in market rents in the areas surrounding Copenhagen. These factors have inten sified the demand for newly built and modern apartment buildings and row houses in attractive surrounding municipalities. This is reflected in transaction activity, where residential investments in Copenhagen environs accounted for a larger share of the volume in 2024 than residential investments in Copenhagen and Fred eriksberg, contrary to the historical trend. The improved market conditions are expected to attract further investment in the new housing stock in Greater Copenhagen. At the same time, this creates expecta tions of yield compression, driven by increased demand for the residential investment properties that are put on the market. The prospect of lower yield require ments and rising rent levels creates a favourable basis for a comeback of forward-purchase transactions, which further supports the anticipated increase in activity in the residential property investment market in Greater Copenhagen going forward.

4.7%

Realised selling prices

10.8%

5.2%

Units for sale

Laydays

Note: Development between Q3 2023 and Q3 2024, owner-occupied apartments, Greater Copenhagen. Source: Finance Denmark, Colliers