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Denmark is the smallest country in the Nordics
in terms of size, and as a result the Danish
property market does see below average levels
of liquidity.
Domestic investors tend to be more dominant, as in
other Nordic markets. Foreign investment has been
restricted to flows from other European markets,
notably from Sweden, Norway, Germany, the UK and
the Netherlands. The most sought after assets are
residential, high street and shopping centre retail and
office properties in CBD and the Greater Copenhagen
region.
Denmark also has a well established investor base
of its own, with many institutional investors, listed
property companies as well as some private investors.
The Danish market has lagged the recovery seen in
other Nordic markets as investors and lenders have
struggled with a number of problematic assets in
the wake of the financial crisis. The situation is now
starting to improve.
Overall, debt funding is relatively easy to obtain
and as opposed to bank loans, mortgage loans
(from mortgage banks) are interminable for the
lender as long as instalments are paid. Moreover, in
recent years there has been growing activity from
institutional lenders (predominantly insurers) and
private and institutional funds. Danish pension funds
tend to stick with new developments and have in
many cases forward funded projects in order to
source deals at an early stage.
Market sizing
Denmark
Europe
Invested stock
(Total stock)
EUR 46bn
(EUR 88bn)
EUR 3,335bn
(EUR 8,201bn)
Liquidity ratio
(10y average)
1.2%
(3.4%)
5.6%
(4.6%)
2014 volumes
(10y average)
EUR 0.5bn
(EUR 1.3bn)
EUR 187bn
(EUR 142bn)
Market pricing – Copenhagen (Q4 2014)
Office
Retail
Industrial
Current Yield
5.00% 4.75%
7.50%
Min/Max (10y)
4.00-5.75% 3.25-5.75% 6.00-7.75%
Yield definition
Net initial yield
Source: DTZ Research
Investment activity by source of capital, 2014
Investment activity by asset type, 2014
Source: DTZ Research
Source: DTZ Research
Domestic
Non-European
European
Office
Mixed Use
Retail
Industrial
Other
40%
15%
16%
Denmark
28%
72%
22%
33%
36%
4% 5%
24 Investors Guide to Europe 2015