Focus report Aarhus - Colliers Denmark 2024

OFFICE - COLLIERS FOCUS REPORT AARHUS 2024

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HOTEL INDUSTRIAL/LOGISTICS RETAIL RESIDENTIAL OFFICE

Record-high employment and green initiatives in high demand

Like the rest of the country, the Aarhus office market is favoured by national trends, inclu ding record-high employment in the Central Denmark Region. Tenants are increasingly demanding sustainability certifications and flexible lease terms.

Demand continues to be concentrated on new, prime office properties that offer functional, flexible, modern and cost-effective office leases. In particular, the demand for multi-user properties is seen to have grown. Multi user properties offer tenants the opportunity to move to a lease that is tailored to specific area requirements, while it is typically possible for tenants to minimise oper ating costs in terms of sharing common service facilities such as reception, canteen operations, etc., which has proven attractive to many tenants. In addition, sustainability is also on the agenda of ten ants, who increasingly want sustainability-certified prop erties in line with the increased corporate focus on ESG. The COVID-19 pandemic is also believed to have sharp ened companies’ focus on flexible contractual conditions – be it the possibility of upscaling or downscaling prem ises or legal conditions such as the possibility of surren dering leases rather than subletting. Furthermore, the period of elevated inflation has sharp ened tenants’ focus on rent capping, as rents are typically adjusted according to increases in the net price index (NPI). Finally, there are also companies that have shown interest in ’all-inclusive’ concepts, where companies rent

premises where all services are included in the rent, such as furniture, canteen operation, internet, maintenance of green areas, etc. An example of this is PFA’s concept The Union, which can be found in Risskov and with several planned locations in the Aarhus area. The vacancy rate generally indicates a healthy office mar ket, with supply matching demand. In 2023, there was a slight increase in vacancy in the key growth centres of Copenhagen and Aarhus. However, the vacancy rate remains at a low level relative to office vacancies in other major European cities. While the ability to work from home is often important to office workers, studies show that the majority of office workers prefer to be physically present in the office as it facilitates socialising with colleagues, face-to-face collab oration and a clearer demarcation of work and leisure, as well as practicalities such as better workstations as well as peace and quiet. This trend is helping to maintain office demand and impact vacancy rates in an office market where supply is increasing due to high construction activity.