Focus report Copenhagen - Colliers Denmark 2024

RETAIL - COLLIERS FOCUS REPORT COPENHAGEN 2024

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Retail comeback despite challenges looming ahead

INDUSTRIAL/LOGISTICS RETAIL RESIDENTIAL OFFICE

The Copenhagen retail market suffered a particularly hard blow due to the pandemic and a 2022 characterised by several challenges. These challenges included sharp increases in inflation, energy prices and interest rates, as well as substantial geopolitical uncertainty, triggering a drastic drop in consumer confidence followed by a drop in real wages.

However, the year 2023 was better than expected for the Copenhagen retail market, and the strong rental market has proven resilient to rising interest rates and changing consumption patterns. However, the danger is not over yet, and the retail market in Copenhagen and environs may still face challenges ahead. Subdued increase in retail vacancies After bottoming out in 2022, consumer confidence entered 2023 at a very low, albeit rising, level. Throughout 2023, consumer confidence has continued to rise and

although consumers are still somewhat pessimistic and cautious, there are signs of improvement. In particular, the prospect of wage increases, slowing inflation and continued high employment is helping to alleviate pessimism. As a result of rising interest rates and high inflation in 2022, the market feared rising vacancy levels in the high-street market. However, vacancy has not skyrocketed, as the strongest and most exclusive tenants continue to require leases in the best locations with high visibility – even in uncertain times. As a result, the Copenhagen retail market continues to enjoy relatively

Subdued increase in retail vacancy rates

5%

4%

3%

2%

1%

0%

13

14

15

16

17

18

19

20

21

22

23

24

Copenhagen

Copenhagen environs

Greater Copenhagen

Note: Vacancy rates, retail, Copenhagen. Source: Ejendomstorvet.dk, Colliers