Market Report 2022
Colliers Market Report 2022
114
Market practices
Agents’ fees and legal fees are typically subject to negotiation in Denmark and are highly case-dependent. As for acqui sition costs, it should be noted in particular that the Danish transfer tax rate is only 0.6%, in eastern Denmark (including Copenhagen) payable by buyer, in western Denmark split 50:50 between the parties. Information provided in the table below is intended for guidance only and reflects “typical market practice” as far as com mercial and residential leases are concerned.
Typical lease practices, Denmark Commercial leases
Residential leases
Rent quoted in 1
DKK per gross sq m p.a.
Rent quoted in 9
DKK per gross sq m p.a.
Floor areas Lease term 2
Gross external
Floor areas 10 Lease term 11
Gross external
Negotiable Negotiable
‘For time and eternity’
Breaks 3
Breaks
None
Rent payment
Monthly or quarterly in advance
Rent payment
Monthly
Deposit 4
3-6 months
Deposit and prepaid rent 4 Basis of rent adjustment 12 Frequency of rent adjustm.
4-6 months
Basis of rent adjustment 5 Frequency of rent adjustm.
NPI
NPI
Annual
Annual
Rent review 6
Every 4 years
Rent review 13
Every 2 years
External repairs Internal repairs Common areas 7
Landlord
External repairs Internal repairs Common parts
Landlord
Tenant
Negotiable
Tenant (via S/C)
Landlord
Tenant insures content Landlord insures building
Building insurance
Building insurance
Landlord
Property taxes
Tenant
Property taxes
Landlord
Yes, 2-year max. Yes, in a swap
Subletting
Negotiable Negotiable
Subletting 14
Right of assignment
Right of assignment
Restoration (Hand-back) 8
Yes
Restoration
Negotiable
Pre-emption
Negotiable
Pre-emption 15
Danish Rent Act
Notes 1. Exclusive of VAT, 25%. 2. An initial non-termination period of 3-10 years is customary, upon expiry of which the lease may be terminated at 6-12 months’ notice. The landlord is only entitled to terminate the lease under special circumstances, cf. sections 61 and 62 of the Danish Business Lease Act. It is important to note that in Denmark the expiry of the non-terminability period is not identical with lease expiry but simply denotes the date when the parties are entitled to terminate a lease at the stipulated notice. 3. Against penalty 4. Not in escrow. 5. NPI = Net Price Index, minimum and maximum annual increase as per agreement. 6. A review of the rent to market rent may be applied for by either party every four years but is not compulsory. 7. S/C means Service Charge. 8. The typical tenant restoration obligation is to put the premises back to the original condition when leased. 9. Not subject to VAT, 25%. 10. For multi-let properties including a proportionate part of common parts, including stairs, lifts, etc. 11. The tenant typically entitled to terminate the lease at 3 months’ notice. 12. Applicable to buildings occupied after 31 Dec. 1991 subject to agreement. Rules on cost regulated rent control (“omkostningsbestemt husleje”) may apply to buildings occupied prior to this date. 13. Utility value review may be applied for by either party every two years. This mechanism applies if the lease is not governed by the rules of cost regulated rent control, cf. (12). 14. Alternatively 50% of the rooms in the flat if not more than 2 persons live in each room. The total number of residents may not exceed the number of rooms. 15. Existing tenants in residential properties governed by the Danish Rent Act may have a pre-emption right to acquire the property in case of a direct or indirect sale.
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