Market Report 2022

Colliers Market Report 2022

77

Hotel Industrial/logistics Retail Residential Of f ice

Investors showing renewed interest In times of uncertainty, we generally see investors zooming in on non-cyclical properties let to financially strong tenants on long leases. In the retail market, such properties with tenants engaged in the sale of groceries and other necessities have emerged from the coronacrisis-related uncertainty and mul tiple lockdowns unscathed. Megastores, or the so-called big box outlets, have proved to be an interesting newcomer in the market. The concept has proved its resilience in terms of high risk-adjusted returns, together with long tenant non-termina bility terms whetting investors’ appetite. In this segment, investors can find low-risk investment oppor tunities, as clearly reflected in the largest retail investment transactions in 2021, including Savills IM’s acquisition of a portfolio of 43 Rema 1000 supermarkets across Denmark at a price of about DKK 1.2 billion. With the transaction, Savills IM secured a portfolio let to a financially strong tenant for a

15-year non-terminability period in a segment that has proved exceptionally crisis-resistant during the COVID-19 pandemic. In addition, CBRE Investment Management and Portus Retail Partners have divested BIG Shopping, a Greater Copenhagen big box/shopping centre hybrid in Herlev, to UK investment manager M&G Real Estate. The transaction bears witness to the sustained strong demand for this type of property that continues to offer favourable risk-adjusted returns relative to other segments. We predict that demand also in the near future will focus on properties let to financially strong tenants on long leases. As a result, supermarkets, big box outlets and major shopping centres are believed to be coveted by investors. Such prop erties are therefore also expected to see yield compression as the supply of attractive big box outlets is relatively limited. We expect investors to remain selective when investing in this segment.

 SEBASTIAN SCHLAGER , sebastian.schlager@colliers.com  SIMON JACOBSEN , simon.jacobsen@colliers.com

Domestic investors predominated the retail segment in 2021

Investors continue to prefer core retail investments

69% Core

25% Value-add

Risk profile

4% Opportunistic

39 %

Domestic 61 %

3% User

International

Note: Transaction volume in Denmark, retail, by investor origins and risk profile. Source: Colliers