TriangleRegion Locations MR2020

2 0 2 0

OFFICE HOTEL RETAIL INDUSTRIAL RESIDENTIAL REGIONS

The Triangle Region

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.

Colliers Denmark | colliers.dk | +45 70 23 00 20

Location descriptions | Triangle Region – Market Report 2020

2

In brief The Triangle Region

Introduction The Triangle Region in this context refers to the area around Vejle, Kolding and Fredericia. The Triangle Region is believed to be among the growth regions of the future. Many busi- nesses are located in the region due to its central location south of Aarhus and relatively close to both Copenhagen and Germany. The region officially encompasses the seven municipalities located in the south-eastern corner of Jutland and the westernmost tip of Funen. The Triangle Region is a major transportation hub with almost all trans-Denmark transportation passing through the region. Vejle and Kolding enjoy close proximity to E45, the primary north-south motorway in Jutland while Fredericia is strategically located by the E20, the primary east-west motorway. The Triangle Region is particularly popular among logistics firms due to the advantageous location. In addition, the region benefits from easy access to Denmark’s second largest airport, Billund Airport. As of 1 October 2019, the Triangle Region (i.e. the municipalities of Vejle, Kolding and Fredericia combined) had some 260,300 inhabitants, and this number is expected to have grown by 4.4% by Q1 2029.

Copenhagen Property Market Report 2020

3

Office

Although the Triangle Region has experienced falling office vacancy levels and rising employment levels, new office construction has been moderate, consisting primarily of headquarter newbuilds. Vejle Dandy Business Park, located north of Vejle, is a small cluster with five modern office buildings housing approx 100 businesses and 800 employees in the knowledge-intensive industries. Fjordenhus, a 9,000 sq m iconic office building designed by acclaimed artist Olafur Eliasson, was completed in 2017. The building houses Kirk Kapital and is located by the harbour. Kolding Employment numbers have been steadily rising since the financial crisis, and offices are in high demand due to the advantageous geographical location. The city centre and Kolding Nord both have strong commercial hubs with numerous office workplaces. In Kolding Nord, the hub is centred around several office headquarters and company houses, while the city centre hub is located by the harbour and Kolding’s financial district, where Nordea, Sydbank and Danske Bank have offices. In addition, construction has started on new office premises for Nykredit and Andersen Partners. Fredericia Being the smallest municipality in the region, Fredericia has a corresponding low level of office construction. Unlike Vejle and Kolding, Fredericia has no well-defined central office district, rather, small office units are scattered across town. Port House is the first completed office development in the Kanalbyen district, which spans the central harbour district, formerly known for its heavy industry. The Municipality of Fredericia and Realdania have joined forces to head up the development scheme. Fully developed, Kanalbyen is expected to have 1,200 residential units and 2,800 employees in addition to retail space and public areas.

In 2017, DLG began construction of their new headquarters in close proximity of the E45 at Fredericia to house 300 employees on completion in early 2020.

Location descriptions | Triangle Region – Market Report 2020

4

OFFICE

Change

Market Expectations

Typical rent levels

2017 1,100

2018 1,100

2019 1,150

2020

2019-20 2020

1,150

0% 0% 0% 0%

Prime

Vejle

550

550

600

600

Secondary

1,100

1,100

1,150

1,150

Kolding

550

550

600

600

1,000

1,050

1,100

1,000

-9%

Fredericia

475

500

500

500

0%

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

Copenhagen Property Market Report 2020

5

Residential development areas

Vejle Bølgen, a luxury residential building complex located directly on the harbourfront instantly became a landmark building with its five characteristic wave-like structures. PFA is investing in a 228 rental flat complex at Flegmade, which is scheduled for completion in 2020. Skudehavnen is the name of a 17,500 sq m residential construction with terraced housing and flats, located directly by the fjord. Kolding Residential development and densification of the city centre has been less pronounced in Kolding than in other comparable cities. Nonetheless, several short- and long-term projects are underway. In November 2018, the Kolding city council announced a plan to dismantle the commercial harbour and re-purpose and -construct the area to residential and recreational uses over the coming 25 years. The project is named Marina City and will include approx 1,000 private berths. PFA has just started a 20,000 sq m residential construction scheme called Fjordbrynet, scheduled for comple- tion in late 2024, while AP Pension heads the construction of 9,680 sq m called Kolding Sky. In addition, approx 38,000 sq m land is currently in public tender next to Kolding Å. Fredericia Kanalbyen is a neighbourhood by the harbour being developed in a partnership between Fredericia Municipality (25%) and Realdania (75%). The area is expected to have 1,200 residential units when fully developed in 20-25 years.

Location descriptions | Triangle Region – Market Report 2020

6

Retail

Vejle Supported by its greater population numbers and size, Vejle has a thriving retail market. Recent stores include Joe & The Juice, Rituals and Eventyrsport. The two shopping centres Mary’s and Bryggen, both constructed in 2008, occupy either end of the high- street market in Vejle. Mary’s currently has approx 7,000 sq m retail, but is undergoing remodelling to accommodate residential units on the top floor. In addition, the existing roof is to be removed to create a pedestrian street, Paladspassagen. The much larger Bryggen has approx 21,000 sq m retail space. In 2017, the visitor count was 3.3 million at Bryggen, where Kvickly and H&M are anchor tenants. Finally, Vejle’s Michelin-star restau- rant MeMu deserves mention. Together with the other restaurants in Vejle, MeMu has improved the town’s gastronomic scene. Kolding The retail scene in Kolding is divided between the city centre and the Kolding Storcenter shopping mall. Retail in the city centre is focused around the main pedestrian shopping street. The area is experiencing stable development and demand, although to a certain extent feeling the adverse effects of Kolding Storcenter and a lower level of urbanisa- tion/densification compared to other cities. Prime high-street rents around the pedes- trian streets of Jernbanegade and Helligkorsgade have increased, while the rent level for secondary locations has remained stable. Kolding Storcenter has 124 stores distributed on 60,000 sq m retail space, making it the region’s by far largest shopping mall, drawing in both local and regional clientele. In 2017, Kolding Storcenter had approx 5.5 million visitors. Fredericia Retail in Fredericia is centred on the main pedestrian shopping street and is character- ised by attracting primarily local clientele. Due to the smaller city size and lower diversity of stores, shoppers often take to one of the neighbouring cities. In addition, competition from the two regional shopping centres in Kolding and Odense is substantial. Nevertheless, the central high-street market of Fredericia offers a good selection of shops around Danmarksgade and Gothersgade. The addition of Michelin-star restau- rant Ti Trin Ned has done much to improve the city’s identity in general and gastronomic scene in particular. Similar to Kolding and Fredericia, Vejle has a large out-of-town retail district anchored by hypermarket Bilka, which attracts customers to several big box outlets along Horsensvej.

Copenhagen Property Market Report 2020

7

RETAIL

Change

Market Expectations

Typical rent levels

2017 3,300 1,200 2,500

2018 3,400 1,300 2,500 1,000 1,800

2019 3,400 1,300 2,500 1,000 1,800

2020 2019-20 2020

3,200 1,300 2,400 1,000

-6%

Prime

Vejle

0%

Secondary

-4%

Kolding

950

0%

1,800

1,750

-3%

Fredericia

800

900

900

900

0%

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 | Triangle Region – Market Report 2020

8

Industrial & logistics

Vejle In Vejle, the most prominent industrial and logistics location lies north of the city at E45 motorway exit 59, which has given its name to an entire commercial district, EXXIT 59. Casa purchased the majority share of the business park in late 2018. Since 2010, rental income has doubled, with over 30 businesses and 1,000 employees located there, including Danske Fragtmænd, Havi Logistics and Lagkagehuset. The district currently spans an area of 87,000 sq m, but ambitious plans to add 220,000 sq m are in the pipe- line. In the harbour areas and at Fredericiavej south of the city centre lies the older part of the industrial property stock. These areas are particularly vacancy prone as premises typi- cally fail to meet modern requirements, making re-letting difficult. Kolding Kolding’s primary and largest industrial district is located north of Bramdrupdam and houses a number of companies, including GLS Denmark, TNT, GLS Express, Lidl, NTG Continent and Prime Cargo. The area commands slightly higher rent levels than other, more dated industrial districts around Kolding.

Copenhagen Property Market Report 2020

9

Fredericia Fredericia’s location in close proximity to the north-south E45 motorway and east-west E20 motorway benefits logistics companies in particular, but also manufacturing compa- nies have settled in the region on this account. The region provides a very extensive recruit- ment base, supported by Odense, Aarhus and most of southern Jutland being located within a one-hour radius, travelling by car. The port of Fredericia is Denmark’s largest commercial port. In the past, the port was used mainly for industrial purposes, in particular by Fredericia Shipyard and Shell. As a result, the area has no large-sized up-to-date warehouse or logistics companies. Production companies in Fredericia have instead opted for locations with motorway proximity, namely DanmarkC and Taulov, the latter being home to a combi-terminal where several companies are located, including Danske Fragtmænd, PostNord, Leman and Cirkel K. Also by Taulov, Google is constructing a DKK 4.5bn, 46,000 sq m data centre expected to employ 150 software engineers, electricians, etc. The construction is scheduled for comple- tion in 2021, while stage one is scheduled to be delivered in 2020. Companies BRING and Schenker are also constructing new headquarters while Dry Port, owned by ADP and PFA, is constructing 50,000 sq m warehousing plus headquarters for DLG. Outside Fredericia, along the E20 motorway just east of Taulov, lies the vast business district known as DenmarkC. With development starting more than a decade ago, this district today houses a variety of manufacturing and logistics businesses. As indicated by the name, the district is located at the very centre of Denmark, which has made it a popular location. Sanistål, Arla Foods, DHL, PostNord and Blue Water Shipping all have major logistics facilities here.

INDUSTRIAL/LOGISTICS 1

Change

Market Expectations

Typical rent levels

2017

2018

2019

2020

2019-20 2020

350 200 350 200 400 225

350 200 375 200 425 250

350 200 400 225 450 275

350 225 400 225 425 250

0%

Prime

Vejle

13%

Secondary

0% 0%

Kolding

-6% -9%

Frederica

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