Focus report Aarhus - Colliers Denmark 2024

RESIDENTIAL - COLLIERS FOCUS REPORT AARHUS 2024

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Increased caution in the investment market The past year was characterised by cautious investors biding their time. Significantly less favourable market conditions due to rising interest rates and an increased mismatch between buyers’ and sellers’ price expecta tions led to a sharp drop in transaction activity and higher required returns on residential investment properties in Aarhus. Similarly, the market in 2023 could be described more as a buyer’s market, whereas in recent years it has been a seller’s market. Residential investment property remains the most sought-after segment for investors in Aarhus, and with the expectation of falling interest rates and thus better financial conditions, transaction activity in the segment is expected to increase in 2024 compared to 2023.

outskirts of the city have been difficult to let. We still see tenant incentives, such as a few months’ free rent or a gift voucher for interior design or similar - espe cially in properties in more secondary locations. If you look at the vacancy rates in various sub-areas, you see great variation across the board. In more central loca tions, such as Ceresbyen, Brokvarteret and the area around Musikhuset, vacancy is at a low level, i.e. around 3%. However, in the newer housing projects built on the periphery of Aarhus, such as Gellerup, Tilst and Risskov Engby, vacancy is more pronounced. Developments in the coming years will help dictate the future Aarhus residential market, where developers are expected to increasingly focus on projects in central loca tions rather than building on the outskirts of the city and thus expanding the city.

HOTEL IINDUSTRIAL/LOGISTICS RETAIL RESIDENTIAL OFFICE

Typical rent levels

RESIDENTIAL

2021

2022

2023

2024

CHANGE 2023-24

Aarhus 1

Prime

1,650

1,650

1,650

1,650

0%

Secondary

1,475

1,475

1,475

1,475

0%

Aarhus 2

Prime

1,500

1,500

1,500

1,500

0%

Secondary

1,225

1,225

1,225

1,225

0%

Aarhus environs

Prime

1,275

1,275

1,275

1,275

0%

Secondary

1,000

1,000

1,000

1,000

0%

1 Includes Aarhus Ø, Trøjborg, Åbyhøj, Aarhus N, Risskov and Viby 2 Includes Tilst, Brabrand, Gellerup, Højbjerg and Vejlby Note: Rent levels quoted in DKK per sq m p.a. for new residential units of 75-80 sq m, ground-floor and penthouse units excepted. Level in 2024 indicates Colliers’ estimation at year-start. Source: Colliers

Typical net initial yields

RESIDENTIAL

2021

2022

2023

2024

CHANGE 2023-24

Aarhus 1

Prime

3.75%

3.38%

3.75%

4.13%

38 bps

Secondary

4.00%

3.75%

4.00%

4.50%

50 bps

Aarhus 2

Prime

4.25%

3.50%

4.00%

4.50%

50 bps

Secondary

4.75%

4.25%

4.50%

4.75%

25 bps

Aarhus environs

Prime

4.50%

4.00%

4.25%

4.50%

25 bps

Secondary

5.00%

4.50%

4.75%

5.00%

25 bps

1 Includes Aarhus Ø, Trøjborg, Åbyhøj, Aarhus N, Risskov and Viby 2 Includes Tilst, Brabrand, Gellerup, Højbjerg and Vejlby Note: Net initial yields, residential, Aarhus. Level in 2024 indicates Colliers’ estimation at year-start. Source: Colliers