Market Report 2022

Office - Colliers Market Report 2022

34

Focus on green transition – many old-stock buildings slow to catch up The green transition has become a key concern of investors when they screen new investment opportunities. Pension funds, property companies, property funds – almost every investor has sustainability criteria that a property is required to meet before it may be added to the portfolio. This pattern is reflected in the fact that environmental certificates and sus tainability are the backbone of virtually all office newbuilds or development schemes. However, a large portion of the Danish office stock cannot be labelled sustainable today, e.g. due to low energy efficiency. As buildings are characterised by long life spans and long ren ovation cycles, and as annual new construction accounts for only a small part of the overall building stock, it cannot be ruled out that Denmark will see the introduction of energy-effi ciency requirements. This has already happened abroad, with the Netherlands and England among the countries introducing energy-efficiency requirements for existing buildings. In view of the transformation of the property industry these years, mainly old, functionally obsolete, and non-sustainable properties are facing a challenge. Although it will be many years before the pipeline of new office completions matches the cur rent take-up levels in existing old-stock premises, it will be nec essary to factor in costly retrofitting of a great many properties, provided they are to remain appealing to investors and ten

Europaplads 6, etc., Aarhus C. Visualisation

ants, as sustainability requirements are expected to trigger an elimination race among old buildings as the building stock in general is upgraded. Multi-user offices gaining ground In response to the stronger call for flexibility, the sharper focus on homeworking and higher demands on space configura tion and facilities, investors are starting to contemplate inno vative solutions and ideas to adjust their properties to the new requirements. Multi-user office buildings have therefore been gaining ground: Whereas properties used to be tailored to meet the demands of a single or few tenants, most new office buildings are designed to allow for even further subdivisions, even if the property is initially let to a single or few tenants. However, today’s inves tors are increasingly seen to take it one step further than just providing the properties with a flexible layout before lease-up: Instead, they tailor the properties to fit their own concept with emphasis on e.g. flexibility, efficiency and superior facilities. “Social spaces”, small meeting pods, various work zones and excellent staff dining facilities have thus come to the fore as some of the key ingredients of several new concepts. In 2021, pension fund PFA introduced its vision of a future mul ti-user concept, presumably to be rolled out in a large part of the existing property portfolio. With an emphasis on the well-being of workers, sustainability and facilities to support the tenants’ hunt for talent, the concept is expected to meet the demands

Poor energy efficiency in large portion of the Danish office stock

G 3 % F 4 % E 9 % D 26 % C 32 % B 12 % A 14 %

Note: Danish office stock by energy efficiency rating (A being the top rating). Source: National Housing and Building Registry, Danish Energy Agency