Focus report Aarhus - Colliers Denmark 2024

INDUSTRIAL AND LOGISTICS - COLLIERS FOCUS REPORT AARHUS 2024

25

HOTEL INDUSTRIAL/LOGISTICS RETAIL RESIDENTIAL OFFICE

Industrial/logistics segment defies transaction drought

The Aarhus market for industrial and logistics properties is highly diverse in terms of building quality and configuration. In addition, the area has a limited supply of commer cial land. However, occupational demand remains strong, especially for industrial and logistics properties in locations with good infrastructure, either close to the motorway grid or close to the most central arterial roads.

Despite elevated interest rates, hesitant investors and general market uncertainty, the industrial and logistics segment defied general market trends and accounted for 27% of the total transaction volume in 2023 in Denmark, which is a significant increase compared to previous years’ share of 18% in 2022 and 13% in 2021. Aarhus and environs contributed with several major deals in the past year. The positive trends are driven by a continued strong occupational market and opportunities involving sale-leaseback transactions, which has proven to be a liq uid segment. Sale-leaseback Sale-leaseback transactions, where a company sells its user property to an investor but enters into a long term lease to remain in the property, have proven popular in recent years. The benefits of a sale-leaseback transaction are that it provides the company with an immediate release of capital that can be invested, for example, in the core business. The model is typically favoured by compa nies that want to convert the value of the property into working capital while retaining operational control of the property. Investors also require longer non-ter minability periods and a high credit rating from the future tenant to secure their cash flow during the term of the agreement. In other words, from the company’s

perspective, this is an attractive opportunity to raise capital that can be seen as an alternative to traditional financing. In 2023, industrial company DAFA Group sold their head office in Brabrand, which consists of approx. 16,000 sq m of production, office and warehouse space. DAFA specialises in products and solutions for sealing, protection and soundproofing. The solu tions are sold in the wind and construction industries, among others. E-bike company Promovec sold their facilities in Lisbjerg in a sale-leaseback, while COOP sold their fresh produce centre in Hasselager to a pension fund as part of a portfolio transaction. Development despite higher construction costs Logistikparken Aarhus in Brabrand remains one of the prime locations for industry and logistics in Aarhus due to its strategic location by the motorway grid. The area is home to Danske Fragtmænd, Salling Group, Søstrene Grene and Advansor, among others. The company Nemlig.com has vacated their facilities, leaving a state-of the-art logistics and warehouse property of 38,565 sq m empty and available for rent. Nemlig.com is closing due to declining online sales of groceries, so the activities are moving back to the warehouse in Brøndby.