Focus report Copenhagen - Colliers Denmark 2024

INDUSTRIAL AND LOGISTICS - COLLIERS FOCUS REPORT COPENHAGEN 2024

53

INDUSTRIAL/LOGISTICS RETAIL RESIDENTIAL OFFICE

The following is a brief introduction to the Greater Copenhagen industrial and logistics market, with the so-called south corridor considered one of Denmark’s premier logistics locations. Greater Copenhagen

Birkerød/Allerød/Hillerød Situated north of Copenhagen, the towns of Birkerød, Allerød and Hillerød generally feature a stock of built to-suit production facilities that fail to meet today’s tenant requirements. Dating mainly from the 1960s to 1980s, the building stock typically comprises ancillary office units at the front and industrial/warehouse facil ities at the back. The area is popular with businesses looking to cut overhead costs, e.g. small to medi um-sized wholesalers and businesses in the automobile industry, including dealers in spare parts and car acces sories, leasing companies, etc. Such facilities are in rela tively low demand and somewhat susceptible to struc tural vacancy. It is worth mentioning that the area has an important concentration of modern production facilities for phar maceutical, biotech and medtech industries, including Novo Nordisk, which company is expanding its production facilities in Hillerød by adding a new 65,000 sq m multi product facility. The investment comes with a price tag of DKK 16 billion. Similarly, Novo Nordisk has invested DKK 5.4 billion in the expansion of its Bagsværd facility. The expansion scheme is scheduled for completion in 2024. Pharmaceutical company Fujifilm Diosynth Biotechnol ogies is also present in Hillerød and has just completed construction of a factory worth more than DKK 23 billion. When production begins, the factory will be the largest in Europe. Finally, Matas is in the process of building a new 25,000 sq m logistics centre in Allerød, which is scheduled for completion in 2025. Development is therefore brisk in the area, involving interesting players. Ballerup/Måløv Ballerup is located just northwest of Copenhagen, where the building stock largely resembles that of Birkerød/ Allerød/Hillerød, i.e. typically with too large office compo

nents as well as insufficient ceiling heights and loading docks, etc., rendering them less suitable for today’s logistics purposes. Brøndby/Glostrup/Herlev (the west corridor) Typically located along the Ring Road 3 corridor west of Copenhagen, traditional Greater Copenhagen industrial districts start at Brøndby to the south, fanning out to Glostrup, Albertslund, Herlev and Gladsaxe. Developed some 50 years ago, more industrial properties in this area are becoming functionally obsolete. However, because of excellent infrastructure and prox imity to Copenhagen, the area attracts increasing demand for last mile distribution centres from busi nesses that realise the importance of quick delivery to customers in the Copenhagen area, both in terms of groceries and traditional specialty goods. For instance, Coop Danmark has a large-scale logistics facility at Brøndby, handling mainly fresh produce for last mile delivery. Similarly, delivering groceries purchased online, Nemlig.com has a large-scale logistics facility at Brøndby, enabling prompt deliveries to Copenhagen households. The increasing demand for last mile properties in the west corridor, coupled with limited supply, has driven up rent levels in the area in recent years. The portion of the building stock previously earmarked for industry has been shrinking as former industrial areas are being trans formed into new residential neighbourhoods to accom modate Copenhagen’s growing population. In addition to the aforementioned project in Albertslund, a transfor mation of a former industrial neighbourhood in Herlev has just begun. The new neighbourhood, Hørkær Have, will include 264 residential units with room for 500 resi dents. It is scheduled for completion in 2025. In Glostrup, the former business area Kirkebjerg is also being trans