Odense Locations MR2020

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OFFICE HOTEL RETAIL INDUSTRIAL RESIDENTIAL REGIONS

Odense

LOCATION DESCRIPTIONS

Published by Colliers. Reproduction or citation only with acknowledgement of source. This is an online addition to The Copenhagen Market Report 2020, based on market data that we believe are reliable. Please note that the rental prices quoted may reflect data inconsistencies compared to the respective pre-merger (July 2018) databases of Colliers and/or Sadolin & Albæk. Whilst every effort has been made to ensure that the information provided in the report is both accurate and complete, Colliers accepts no liability for factual errors.

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Location descriptions | Odense – Market Report 2020

In brief Odense property market

Introduction The City of Odense (i.e. the municipality) has experienced sustained population growth for more than a decade. Between Q1 2010 and 1 October 2019, the population increased from around 189,000 to some 205,300, corresponding to population growth of 8.6%. According to Statistics Denmark, the population growth is expected to continue, albeit at a slower pace. By Q1 2029, the City of Odense is predicted to have seen population growth of 4.6%, with a rising share of young families and elderly people. This prediction underlines two general demographic trends: An increasing number of young families are opting to stay in the city instead of moving to the suburbs as was previously the norm. Similarly, but at the other end of the age spectrum, an increasing number of 50-70-year-olds have a strong preference for central living with easy access to public transport. Typically selling their single-family houses or villas in the suburbs to move to rental accommodation in the central city districts, today’s elderly mostly enjoy good health and have a strong appetite for the city’s cultural offerings.

Location descriptions | Odense – Market Report 2020

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Office

Prime office premises in Odense are concentrated around the harbour area and the city centre, where a number of offices are found. The city centre offers only a modest number of large prime office properties and few major office workplaces. At the harbour, the primary office employers include Deloitte, Alectia, EY, Codan, Willis Towers Watson, Rambøll and Nørgård Mikkelsen. Offering office premises that meet today’s tenant requirements, this location still harbours development potential, and we expect to see further office newbuilding. However, developers have been cautious when it comes to new office starts in Odense. This does not apply to residential construction, with several development schemes in the pipeline for the Odense harbour area. Altogether, they will help to make the area a vibrant and attractive location. Another district which is currently undergoing development into a future high-quality office location is Cortex Park. A superhospital is scheduled to open in 2022, and the area is located right next to the University of Southern Denmark. As such, it is expected to attract knowl- edge-intensive businesses in the technology, research and innovation cluster that will find it easy to recruit from the resident pool of university students. Fully developed, the 200,000 sq m area is will be transformed into a dynamic new neighbourhood with a total of 60,000 students, academics, residents and employees. Barfoed Group is in the process of constructing the second stage of Munkebjerg Park, on completion adding 6,500 sq m new office and retail space to the area. Prime office space in the harbour areas are currently believed to command rents of some DKK 1,200 per sq m p.a., excluding taxes and operating costs. Central Odense office rents have been stable around DKK 600-800 per sq m p.a., excluding taxes and operating costs. Due to the current large oversupply of secondary office space, concessions are generally made for new leases.

OFFICE

Change

Market Expectations

Typical rent levels

2017 1,100

2018 1,100

2019 1,200

2020 1,250

2019-20 2020

4% 0%

Prime

Odense

750

750

750

750

Secondary

Note: Rent levels quoted in DKK per sq m p.a. exclusive of operating costs and taxes. Market expectations indicate trend forecast for the next 12 months. Source: Colliers

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Location descriptions | Odense – Market Report 2020

Residential

Odense has the following main residential development areas:

Odense Harbour A masterplan earmarks Odense Harbour as a high-priority development area in Odense, allowing for the construction of some 2,500 new residential units over the next 10-20 years, which will benefit from an attractive waterfront location and proximity to recrea- tional areas such as Åløkke Forest. Vollsmose Vollsmose is a neighbourhood north east of Odense, approx 3 kilometres from the city centre. The neighbourhood has approx ten thousand residents, with a large number of households with children. The building stock is currently characterised by consisting almost exclusively of social housing. The planned transformation of Vollsmose will split the area into smaller neighbourhoods and reduce the proportion of social housing from the current 98% to a maximum of 40%. Additionally, public infrastructure with the light rail system will improve access to the rest of the city. Bolbro Gartnerbyen is located at Bolbro, approx one kilometre west of the city centre on the grounds of the previous GASA fruit, flower and vegetable market. The development plans are based on the past function, featuring and incorporating green roads, parks and living areas. When fully developed, the neighbourhood will form an attractive and dynamic mixed-use area with approx 140,000 sq m new space. In addition to rental and owner-occupied housing, the area will include a hotel, health clinic and supermarkets and other commercial buildings. Østerbro Østerlunden is centrally located one kilometre east of the city centre at Østerbro and Lollandsgade. Letting of stage one with 240 flats was completed in 2019, and the area is expected to be fully developed by 2020 with approx 400 units and 1,000 residents. In addition to flats and terraced houses, the area will have common recreational areas. The area used to be home to a COOP warehouse and is being developed by Topdanmark Ejendomme.

Location descriptions | Odense – Market Report 2020

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Dalum Dalum Papirfabrik (Dalum Paper Mill) is located approx five kilometres south of the city centre and approx three kilometres west of the future superhospital. As the name suggests, the area used to house a large paper mill, which closed at the end of 2012. MT Højgaard plans to build a new neighbourhood consisting of 2-storey terraced houses and 4-storey flats. In total, approx 450 units are expected, in addition to a supermarket and a culture centre. A recreational area by the Odense river will provide access to nature. Central Odense The area around H.C. Andersen’s old family home and other central locations are also seeing brisk construction activity at the moment, which will help to meet the demand for central housing.

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Location descriptions | Odense – Market Report 2020

Retail

The Odense retail property market is divided into two sub-markets: the pedestrian shop- ping street area in the city centre and the south-east shopping area surrounding the Rosengårdcentret shopping centre. The latter is highly successful and sees increasing footfall, but the city centre remains challenged by increased online shopping. Top high- street locations are thriving and attracting strong occupational demand. However, the most highly coveted stretch of the high street seems to be shrinking, and today most activity centres on Vestergade and the southern end of Kongensgade. Prime retail premises command rents of around DKK 5,100 per sq m p.a., excluding taxes and operating costs, while the rent is around DKK 2,500 per sq m p.a. in secondary loca- tions. However, at Kongensgade it is possible to find shops to let at rents as low as DKK 1,200 per sq m p.a. Like other major Danish cities, Odense has seen significant growth in the F&B (food and beverage) segment. New cafés, eateries and restaurants have been able to absorb a substantial amount of vacant retail space, as consumer trends shift from consumption of goods towards consumption of experiences. Despite this, the retail segment is challenged by increased online shopping. The northern end of Kongensgade was expected to be revitalised in conjunction with the scheduled completion of the shopping centre VIVA by Steen & Strøm in 2015. However, the construction has been delayed, and it is uncertain when construction will start, and what it will entail. Originally, the centre was expected to comprise 42,000 sq m, distrib- uted on more than 100 units. If built, it can be expected that VIVA will put additional pres- sure on the shops in the city centre, despite increasing total footfall in the area.

RETAIL

Change

Market Expectations

Typical rent levels

2017 5,400 2,500

2018 5,300 2,500

2019 5,300 2,400

2020 5,100 2,400

2019-20 2020

-4%

Prime

Odense

0%

Secondary

Note: Rent levels quoted in DKK per sq m p.a. exclusive of operating costs and taxes. Market expectations indicate trend forecast for the next 12 months. Source: Colliers

Location descriptions | Odense – Market Report 2020

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Industrial & logistics In Odense, prime industrial locations are concentrated around the E20 motorway in the south-eastern part of the city. Tietgenbyen was developed in 1999 by the City of Odense in response to the then mounting demand for industrial and logistics sites. Given its direct access to the E20, the area is ideally located and has attracted several major companies, including Davidsen Tømmerhandel, Kjær & Sommerfeldt and Danske Fragtmænd. Last but not least, the area will also be home to the 55,000 sq m Facebook data centre, which is expected to be completed in 2020. Moving further west along the E20 to Hjallese and Hestehaven, the former location of Roulunds Fabrikker, there is an industrial and logistics cluster where the COOP non-food distribution centre is the largest facility. Finally, there is an industrial cluster (recently expanded) south-west of Odense by Højme, home to several warehouse facilities, including GASA, DLF and Micro Matic. Against the backdrop of consumer trends changing towards online shopping, prolonged economic growth and declining overall vacancy rates in the industrial/logistics segment, the segment is flourishing. We therefore expect increasing rent levels in prime locations. According to ICP, Rosengårdcentret posted a turnover of approx DKK 2.1bn in 2017, making it the fourth-largest shopping centre in Denmark in terms of sales. Together with a number of other shops at this location, including home furnishings store IKEA and a Bilka hypermarket, this very successful shopping centre is drawing substantial customer flow to the area from Funen and parts of southern Jutland, an extensive catchment area.

INDUSTRIAL/LOGISTICS*

Change

Market Expectations

Typical rent levels

2017

2018

2019

2020

2019-20 2020

350 225

375 250

375 250

425 250

13%

Prime

Odense

0%

Secondary

1 Industrial includes production, storage and logistics facilities. Note: Rent levels quoted in DKK per sq m p.a. exclusive of operating costs and taxes. Market expectations indicate trend forecast for the next 12 months. Source: Colliers