MR 2018

70

Copenhagen Property Market Report 2018

The amount of goods transported to and from Copenhagen made up a considerable part of total transported goods in Denmark in 2016

attributable to higher efficiency standards and automation levels, with robotics etc. taking over processes formerly done manually. Similarly, the index value increase tallies with Danske Bank’s 2017 GDP growth forecast of 2.0%. Furthermore, the outlook for the production index is positive as the 2018 forecast for GDP indicates sustained growth of 2.0%. In 2015, IFR (International Federation of Robotics) named Denmark one of the most highly automated industrial countries in the world (factoring out the car industry), exceeded only by Japan and South Korea. As industrial automation accelerates, Denmark enhances its competitive edge, making it possible to maintain and develop a strong Danish industrial sector. Return to insourcing production In recent years, we have seen Danish businesses insource production previously outsourced to facilities abroad, as businesses increasingly opt to retain and enhance high-tech production in Denmark. As the general existing building stock is fairly outdated and unable to meet the demands associated with such high-tech production, we foresee some new construction activity in this segment. Transport sector on the rebound According to Statistics Denmark, the transport sector saw a 15% decline in FTEs in 2008-2013, followed by an increase. Today, transport sector employment has bounced back, standing 10% below the level recorded in early 2008. Despite employment growth in the transport sector, 2017 saw a slight decline in the volume of transported goods and logged distance in kilometres relative to 2016. Both figures plummeted after the onset of the financial crisis in 2008, but have since stabilised, and especially the volume of goods has rebounded to pre-2008 levels. Greater Copenhagen transport sector prospers Looking only at the volume of goods transported by road in Greater Copenhagen in 2015-2016, we see an increase of some 7% in the volume transported from Greater Copenhagen and 0.7% in the volume transported into Greater Copenhagen. Relative to the volumes recorded in 2008, these figures reflect increases of 36% and 32%, respectively. The increasing volume of goods transported by road has fuelled demand, driving down vacancy rates and increasing rent levels in Greater Copenhagen. South corridor ideal for new logistics developments In this context, the south corridor, stretching from Høje-Taastrup to Køge, offers ideal development sites with easy motorway access (E20), connecting to Copenhagen, the rest of Zealand, Funen, Jutland as well as Sweden and Germany. In addition, the corridor’s local plan provisions are fully aligned with today’s demands, facilitating the development of top-modern logistic facilities. Local authorities are business-friendly, some earmarking sites for logistics newbuilding. The Municipality of Køge is offering multiple plots of land as logistics development sites. Pharmaceutical company Nomeco

24% of 177K tons

67% of 1K tons

93% of 0.2K tons

16% of 13K tons

Source: Statistics Denmark