Market Report 2022

Colliers Market Report 2022

37

Hotel Industrial/logistics Retail Residential Of f ice

Nybrovej 116, Kongens Lyngby

by a supply of Copenhagen investment properties that is unable to keep up with demand. If you have the stomach to head out of Copenhagen, discarding the notion of this city being the one and only Danish growth centre, you should be able to find attractive investment opportunities to pursue in the coming years. Yield requirements expected to level off in 2021, but still many unknowns Whereas 2021 saw continued yield compression in the office market, many of the drivers of this compression have started to weaken. The market has by now largely factored in the favour

able conditions in the letting market, with low vacancy and potential rent hikes today part of the risk and yield assessment of new investments, reflected in record-low yields. In addition, Copenhagen yields have in recent years dropped to a low that has greatly reduced the yield spread to the yield levels in vari ous competing metropolises. Despite sustained large capital placement requirements and a supply unable to match investor demand, other market dynam ics indicate that the next 12 months will see yields largely sta bilising in prime markets. Should the right assets come on the

Copenhagen yield premium is edging down and stabilising

100 120

0 20 40 60 80

-60 -40 -20

18

19

20

21

22

Berlin

Stockholm

Oslo

Helsinki

Amsterdam

Paris

Madrid

Note: Yield spread in bps, illustrated by premium offered in Copenhagen vis-à-vis other cities in the EU, 2018-2022. Source: Colliers