MR 2018

69

Copenhagen Property Market Report 2018

LOCATIONS Industrial & logistics Read more

Flexible and modern properties in demand

Decreasing to stagnant number of industrial workers in Denmark Decreasingto stagnantnumber of industrial workers in Denmark

Industry and logistics in transition Along with the rest of the Western world, Denmark is part of a year-long transition process from a predominantly industrial to a knowledge-based society. Increasing urbanisation and the high educational level in the Danish population in general support this megatrend. Having seen a steady decline for several years, the number of employees in the Danish industrial sector has now levelled off, whereas employment figures in the sector’s Danish-owned subsidiaries abroad has been climbing. Post-crisis stabilisation in Danish industry High production costs are the root cause of the decline in industrial workplaces, mainly because of labour-cost constraints in labour-intensive industries. Nevertheless, the number of Danish industrial workplaces has stabilised since 2014, mainly because of Danish economic recovery and growth in exports, at end-2017 slightly exceeding pre- crisis level. Since 2010, industrial capacity utilisation has been hovering around the 80% mark. As the Danish industrial sector has yet to reach full capacity utilisation, it does not automatically follow that increased industrial output will spur the demand for industrial property. Fewer vacancies due to increased activity Irrespective of the industrial sector’s unutilised capacity as well as downtrending or stagnating employment figures, however, overall Greater Copenhagen industrial/logistics vacancy rates dropped from 3.6% to 3.0% as 2017 wore on, thereby continuing the downtrend of 2016. Vacancy rates are seen to decline in industrial/logistics markets across the country as a manifestation of brisker activity in this segment. Broadly speaking, demand centres on up-to-date, readily operational storage and logistics facilities. Such properties are typically relatively standardised products, built to meet the same predefined requirements. In contrast, purely industrial and production facilities are typically built to suit the demands of a specific end-user, rendering them more difficult to re-let. High efficiency and automation levels In 2016 and 2017 alike, the production index of the industrial sector has shown increasing output levels, irrespective of employment trends. In other words, the higher output is

280 300 320 340 360 380 400

08 09 10 11 12 13 14 15 16

Denmark

Abroad

Note: Number of employees in the industrial sector in Denmark and in Danish companies abroad, (‘000).

Source: Statistics Denmark

Increasing trend in Danish exports and imports

20 30 40 50 60 70

0 10

08 09 10 11 12 13 14 15 16 17 Exports Imports Note: Imports and exports, seasonally adjusted foreign trade, DKK bn.

Source: Statistics Denmark