market update may 2016

M A Y 2 0 1 6

Research

MARKET UPDATE

Erhverv Poul Erik Bech

EDC Research - May 2016 - page 2

MARKET UPDATE EDC

Contact us:Robert Neble LarsenCEOTel: +45 33 30 10 54 Mail: [email protected]

Copenhagen area:Morten Westphal JensenRegional directorTel: + 45 38 77 05 22Mail: [email protected]

North Zealand:Stephen Wielje BerthelsenDepartment ManagerTlf: +45 48 26 99 10Mail: [email protected]

Region Zealand:East, West and South Zealand Morten Westphal JensenRegional directorTel: + 45 38 77 05 22Mail: [email protected]

Central Denmark Region: Søren Leth PedersenRegional Director, Partner, MSc.(f), Chartered Surveyor, MDETel: +45 58 58 78 76Mail: [email protected]

North Denmark Region:Frank Jensen Regional Director, Partner, CBATel: +45 58 58 75 72Mail: [email protected]

Southern Denmark:Karsten L Jensen Regional Director, Partner, Tel: +45 58 58 74 07 Mail: [email protected]

Funen:Morten Nielsen Dept. Manager, Partner, Chartered Surveyor, MDETel: +45 58 58 78 56Mail: [email protected]

Research:Morten Westphal Jensen, Regional directorTel: + 45 38 77 05 22Mail: [email protected]

edc.dk/erhverv

M A Y 2 0 1 6

REMARKS FOR OUR ESTIMATES:

The valuation of a property depends on various property specific attributes, including, but not limited to, the lease conditions, the tenant’s credit rating and the property’s condition. When valuing a property, the estimates should not be relied upon without seeking qualified, professional advice. However, the estimates can serve as useful in-put in the valuation process. Any reproduction of data in this report should be credited to EDC Erhverv Poul Erik Bech. Whilst data and estimates have been rigorously checked, EDC Erhverv Poul Erik Bech can take no responsibility for any inaccuracy within this report. Estimates and forecasts of rents and yields are as of April 1 2016. Estimates are subject to change.

YIELDS, MARKET RENTS AND FORECASTS:

LOCATION: Yield and market rent estimates covers properties with prime, secondary and tertiary location.

FACILITY CLASS: Location aside, our estimates are based upon a segmentation of pro-perty facility classes; facility class A, B and C, where class A is the best facility class. Various variables for each property type have been taken into consideration with regards to deter-mine the facility classes, such as: size, floor plan structure, year of construction, lifts, climate control, cabling infrastructure, staff facilities, customer facilities, parking facilities, building energy rating, ceiling height, general accessibility, general condition of the property, etc. A property with prime location and class A facilities has the best possible location in an area, the highest standard when it comes to facilities, is modern and ready to move into. This type of property will typically be traded at the lowest yield for the area, have the highest market rent and have a short reletting process. Naturally, yield and market rent estimates are subject to certain deviations depending on the exact location and property specific facilities.

YIELD DEFINITION: All yields are net initial yields and is defined as the annualised rent generated by the property, after the deduction of estimated annual irrecoverable property outgoings, expressed as a percentage of the property valuation (property valuation is adjusted for the value of rental deposits and prepaid rent). For comparison purposes it is assumed that all properties are fully let at market-conform conditions.

MARKET RENT ESTIMATES: All rents are headline rents, in other words the con-tracted gross rent receivable which becomes payable after any tenant incentives have expired. Market rent estimates are expressed in €/sq m/year. Figures have been roun-ded when converting from DKK (Danish Kroner) to €. It is assumed that all properties are let at market-conform conditions.

FORECASTS: All forecasts reflect our expectations for the development over the next 3 to 6 months.

RESIDENTIAL RENTAL PROPERTIES: In this report estimates are included for “Newer residential rental properties”, “Fully developed older residential rental proper-ties” and “Older residential rental properties”. In Denmark residential rental levels cannot be determined freely and is subject to far reaching rent control. The major dif-ference between the before mentioned types of residential rental property is that older residential rental properties are regulated by the provisions in the Danish rent act (Le-jeloven) and the Housing Regulation Act (Boligreguleringsloven) concerning cost dri-ven rental levels. Newer residential rental properties taken in to use no earlier than 1 April 1992 are subject to the rules concerning free market rent, pursuant to the Housi-ng Regulation Act § 15 A and others.

DATA FOR VACANT COMMERCIAL SPACE ( VACANCY RATE)

Source: Oline ED-Statistikken (Oline-ED Statistics) as of April 1 2016. For more infor-mation we refer to www.oline.dk/info/statistik. The forecasts of the vacancy rates have been made by EDC Erhverv Poul Erik Bech and reflect our expectations for the development over the next 3 to 6 months.

Forecasts

Increasing

Stable

Decreasing


MARKET UPDATE EDC

Regions of Denmark and selected market areas

M A Y 2 0 1 6

Capital Region of Denmark

Region Zealand

Southern Denmark Region

Central Jutland Region

Region North Jutland

Copenhagen

Odense

Aarhus

KoldingFredericia

Vejle

Aalborg

Triangle Area


MARKET UPDATE EDCO F F I C E - M A Y 2 0 1 6

Yield in %, yearly market rent in €/sq m and forecast for the next 3-6 months

Source: EDC Erhverv Poul Erik Bech. Data as of April 1 2016.Forecasts: All forecasts reflect our expectations for the development over the next 3 to 6 months.

Office

Facility class A Facility class B Facility class C Facility class A Facility class B Facility class C

Copenhagen Yield in % Yearly market rent in € / sq m

Prime 4.75 5.25 5.50 285 215 170

Secondary 5.25 5.75 6.25 215 175 145

Tertiary 6.25 6.75 7.25 150 130 95

North Zealand

Prime 7.25 7.75 8.25 135 105 90

Secondary 7.50 8.00 8.50 125 90 75

Tertiary 7.75 8.50 9.00 105 75 65

East Zealand

Prime 6.50 7.00 8.00 150 135 125

Secondary 7.50 8.50 10.00 125 95 70

Tertiary 8.50 11.00 12.00 90 65 45

West and South Zealand

Prime 7.50 8.00 8.50 125 90 55

Secondary 8.00 9.00 10.00 95 70 45

Tertiary 10.00 12.00 14.00 70 50 30

Aarhus

Prime 4.75 5.75 6.25 195 150 125

Secondary 6.00 6.50 7.25 150 115 95

Tertiary 6.50 7.00 8.00 115 90 75

Aalborg

Prime 5.75 6.25 7.25 135 125 105

Secondary 6.25 7.25 8.00 115 105 90

Tertiary 7.25 8.00 8.50 105 85 70

Triangle area

Prime 6.75 7.00 7.25 145 105 75

Secondary 7.00 7.50 7.75 110 85 70

Tertiary 7.75 8.75 9.75 60 55 50

Odense

Prime 6.25 7.00 8.00 155 110 95

Secondary 7.00 8.00 9.00 135 95 90

Tertiary 8.00 9.00 10.00 90 85 70

Vacancy sq m As % of building stock Change % QoQ Change % YoY Forecast

Central Copenhagen 452,200 7.7 -0.5 0.5

North Zealand 121,800 7.7 -0.2 -4.3

East Zealand 40,800 5.8 -0.3 -0.2

West- and South Zealand 67,100 4.3 0.1 -0.8

East Jutland 273,700 8.9 -0.4 -2.1

Region North Jutland 148,600 7.6 0.0 0.1

South Jutland 208,400 8.9 0.4 -2.1

Funen (including Odense) 118,900 7.9 -0.2 -2.0

Vacant office space in sq m, in % of building stock and forecast for the next 3-6 months

Source: Oline ED-Statistikken (Oline ED-statistics), data as of April 1 2016. Changes quarter on quarter and year on year. Forecasts: All forecasts reflect our expectations for the development over the next 3 to 6 months.


MARKET UPDATE EDCO F F I C E - M A Y 2 0 1 6

Office Building stock Vacancy sq m Change sq m QoQ As % of building stock Change in % QoQ

Central Copenhagen 5,876,900 452,200 -30,000 7.7% -0.5%

Copenhagen area 3,735,000 504,200 -60,800 13.5% -1.6%

North Zealand 1,586,200 121,800 -3,600 7.7% -0.2%

Bornholm 115,600 1,200 300 1.0% 0.2%

Capital Region of Denmark 11,313,700 1,079,300 -94,100 9.5% -0.9%

East Zealand 708,100 40,800 -2,400 5.8% -0.3%

West- and south Zealand 1,559,600 67,100 800 4.3% 0.1%

Region Zealand 2,267,700 107,900 -1,500 4.8% 0.0%

Funen (including Odense) 1,499,600 118,900 -2,800 7.9% -0.2%

South Jutland 2,339,400 208,400 9,800 8.9% 0.4%

Southern Denmark Region 3,838,900 327,300 7,100 8.5% 0.2%

East Jutland 3,062,500 273,700 -9,900 8.9% -0.4%

West Jutland 1,401,100 68,200 -4,000 4.9% -0.3%

Central Jutland Region 4,463,600 341,900 -13,900 7.7% -0.3%

North Jutland 1,955,400 148,600 -400 7.6% 0.0%

Region North Jutland 1,955,400 148,600 -400 7.6% 0.0%

Denmark, total 23,839,300 2,005,000 -102,900 8.4% -0.4%

Key vacancy figures from Oline ED-Statistikken (Oline ED-statistics)

Source: Oline ED-Statistikken (Oline ED-statistics), data as of April 1 2016. "% of building stock" is the proportion of empty space in sq m relative to the total building stock.

Vacant office space in sq m, in % of building stock and forecast for the next 3-6 months

Source: Vacancy data from Oline ED-Statistikken (Oline ED-statistics). Data as of April 1 2016.Forecasts: EDC Erhverv Poul Erik Bech. All forecasts reflect our expectations for the development over the next 3 to 6 months.

10%

9%

8%

7%

6%

5%

4%

3%

2%

1%

0%

67,100 sq m

452,200 sq m 121,800 sq m

40,800 sq m

273,700 sq m

148,600 sq m

208,400 sq m

118,900 sq m

Central North Zealand East Zealand West and South East Jutland Region North South Jutland Funen

Copenhagen Zealand Jutland including Odense


MARKET UPDATE EDC

The map for office properties in Copenhagen/Aarhus illustrates a location segmentation in prime, secondary and tertiary locations, where the prime area typically has the best locations for office property in Copenhagen/Aarhus. The location segmentation has been made by EDC Erhverv Poul Erik Bech.

The location segmentation can change over time. The segmentation is our perception of general location segmenta-tion and should not be perceived as a definitive segmentation of the best, good and below average locations.

Copenhagen Aarhus

O F F I C E - M A Y 2 0 1 6

Location segmentation for offices

Copenhagen Aarhus

O2

O3

O2

O3

O4

151

151

E20

E20E20

E47

E47

156

201

21

2

1

22

23

20

4

3

8

18

21

1917

21

17

16 19

Frederiksberg

Kbh. Lufthavn

Ørestad Nord

Ørestad City

Ørestad Syd

Nørrebro

Ydre Østerbro

Indre Østerbro

Tuborg Havn

Vesterbro KalvebodBrygge

HavnefrontSyd

Nordhavn

City

Vanløse

Bispebjerg

SøborgMørkhøj

Utterslev

Husum

Hellerup

Valby

Vigerslev

Brøndbyøster

Rødovre

Hvidovre

Avedøre

Sundbyvester

Kastrup

Tårnby

GentofteGladsaxe

Amerika Plads

Sydhavn

180

O1

O2

505

501

451

501

195

511

46

47

2

2019

18

E45

E45

15

15

26Tilst

Aarhus

Sotoften

Sabro

Lisbjerg

Lystrup

Egaa

Risskov

Olsted

Kasted

Skejby Vejby

Brendstrup

Geding

Kvottrup

Faarup

Skjoldelev

Borum

Yderup

True

LyngbyLabing

Brabrand

GellerupHasle

Marselisborg

Holme

Stavtrup

Aarslev

Aarslev Mark

Ormslev Stationsby

Ormslev Aabo

Lemming

Viby

BeringKolt

Kattrup

Horning Overballe

Jegstrup

Tranbjerg

Slet

Bjostrup

Skaade

Storhoj

HorretOsterby

Hasselager

Aaby

Aabyhoj

170

Yield in % and forecast for the next 3-6 months

Yearly market rent in €/sq m and forecast for the next 3-6 months

1 km1 km

Prime locations Secondary locations Tertiary locations

• Trains • Metro

Source: Vacancy data from Oline ED-Statistikken (Oline ED-statistics). Data as of April 1 2016.

Location Facility class A Facility class B Facility class C

Prime 4.75 5.25 5.50

Secondary 5.25 5.75 6.25

Tertiary 6.25 6.75 7.25


Prime 285 215 170

Secondary 215 175 145

Tertiary 150 130 95


Prime 4.75 5.75 6.25

Secondary 6.00 6.50 7.25

Tertiary 6.50 7.00 8.00


Prime 195 150 1 125

Secondary 150 115 1 95

Tertiary 115 90 1 75


MARKET UPDATE EDCR E T A I L - M A Y 2 0 1 6


Retail

Vacant retail space in sq m, in % of building stock and forecast for the next 3-6 months



Prime 4.50 5.00 5.25 2,685 1,880 1,610

Secondary 5.75 6.00 6.50 500 340 270

Tertiary 7.00 7.50 7.75 150 130 110

North Zealand

Prime 6.50 7.00 7.50 305 165 125

Secondary 6.75 7.25 7.75 235 125 105

Tertiary 7.00 7.50 8.25 170 110 90

East Zealand

Prime 6.00 7.00 8.00 470 340 270

Secondary 7.00 8.00 9.50 340 245 205

Tertiary 8.00 9.00 11.00 135 105 70


Prime 6.75 7.75 8.75 245 205 165

Secondary 7.50 8.50 9.50 175 135 95

Tertiary 8.50 9.50 10.50 135 95 70

Aarhus

Prime 4.75 5.25 5.50 805 605 470

Secondary 5.25 5.50 6.00 540 470 340

Tertiary 6.00 6.50 7.00 270 215 165

Aalborg

Prime 5.00 5.50 6.00 570 440 270

Secondary 6.25 6.50 7.00 175 145 95

Tertiary 7.25 7.75 8.25 85 70 60

Triangle area

Prime 6.00 6.25 6.50 390 310 175

Secondary 6.25 6.50 6.75 215 135 110

Tertiary 7.25 7.75 8.25 95 70 70

Odense

Prime 5.25 6.00 6.50 675 510 340

Secondary 6.00 6.75 7.50 405 270 175

Tertiary 8.00 9.00 10.00 110 85 55




Central Copenhagen 33,100 2.6 -0.3 0.1

North Zealand 57,100 5.3 0.2 -0.8

East Zealand 31,100 7.0 0.3 -0.6

West- and South Zealand 90,700 6.9 -0.2 0.0

East Jutland 110,600 5.5 -0.1 0.1

Region North Jutland 115,300 8.4 0.2 -1.8

South Jutland 154,200 9.1 0.6 -0.6

Funen (including Odense) 65,200 5.1 -0.3 -0.5


MARKET UPDATE EDCR E T A I L - M A Y 2 0 1 6

Retail Building stock Vacancy sq m Change sq m QoQ As % of building stock Change in % QoQ

Central Copenhagen 1,266,300 33,100 -3,500 2.6% -0.3%

Copenhagen area 890,700 25,300 -3,100 2.8% -0.4%

North Zealand 1,082,400 57,100 1,800 5.3% 0.2%

Bornholm 93,400 2,100 600 2.3% 0.7%

Capital Region of Denmark 3,332,800 117,500 -4,300 3.5% -0.2%

East Zealand 446,600 31,100 1,100 7.0% 0.3%

West- and south Zealand 1,307,000 90,700 -1,700 6.9% -0.2%

Region Zealand 1,753,600 121,800 -700 6.9% -0.1%

Funen (including Odense) 1,282,400 65,200 -4,500 5.1% -0.3%

South Jutland 1,699,300 154,200 9,900 9.1% 0.6%


East Jutland 2,015,100 110,600 -1,500 5.5% -0.1%

West Jutland 1,032,700 60,700 -10,200 5.9% -1.0%

Central Jutland Region 3,047,800 171,300 -11,700 5.6% -0.4%

North Jutland 1,367,600 115,300 3,000 8.4% 0.2%

Region North Jutland 1,367,600 115,300 3,000 8.4% 0.2%

Denmark, total 12,483,400 745,300 -8,300 6.0% 0.0%




Vacant retail space in sq m, in % of building stock and forecast for the next 3-6 months

10%

9%

8%

7%

6%

5%

4%

3%

2%

1%

0%

90,700 sq m

33,100 sq m

57,100 sq m

31,100 sq m

110,600 sq m

115,300 sq m

154,200 sq m

65,200 sq m

Central North Zealand East Zealand West and South East Jutland Region North South Jutland Funen

Copenhagen Zealand Jutland including Odense


MARKET UPDATE EDC

Box retail

BOX RETAIL:

Box retail stores are typically located in external retail areas and selling goods that do not require unusually large quantities of floor space. In this publication, we do not include big box retailing with permission for selling items that require unusually large quantities of floor space according to the provisions in the Danish Planning Act (Planloven). Yield and rent estimates are stated as “above ave-rage”, “average”, “below average” for different areas (primary, secondary, tertiary).

B O X R E TA I L - M AY 2 0 1 6

Above average Average Below Average Above average Average Below Average

Capital Region of Denmark Yield in % Yearly market rent in € / sq m

Prime 6.50 7.00 7.50 150 135 125

Secondary 7.00 8.00 9.00 110 95 85

Region Zealand

Prime 6.75 8.00 9.00 125 110 95

Secondary 8.00 9.00 10.00 95 85 70

Central Jutland Region

Prime 7.00 7.25 7.50 150 135 125

Secondary 7.75 8.00 8.25 110 95 85

Region North Jutland

Prime 6.75 7.25 8.00 165 125 110

Secondary 7.50 8.00 9.00 125 110 85

South Jutland

Prime 7.25 7.50 8.00 150 135 125

Secondary 7.50 7.75 8.50 110 95 85

Funen

Prime 7.50 8.00 8.50 150 125 110

Secondary 8.25 9.00 9.50 125 110 90




MARKET UPDATE EDCI N D U S T R I A L & L O G I S T I C S

M A Y 2 0 1 6



Prime 7.00 7.75 8.25 70 60 50

Secondary 7.50 8.50 9.00 60 55 45

Tertiary 8.00 9.25 9.75 50 45 35

North Zealand

Prime 7.50 8.25 8.75 65 55 45

Secondary 8.00 8.50 9.00 55 50 45

Tertiary 8.25 8.75 9.25 50 50 35

East Zealand

Prime 7.00 8.00 9.00 70 50 30

Secondary 8.00 9.00 10.00 55 40 25

Tertiary 9.00 10.00 11.00 50 25 15


Prime 7.50 8.50 9.00 55 45 35

Secondary 8.50 9.50 10.00 50 35 30

Tertiary 10.00 11.00 12.00 35 30 25

Aarhus

Prime 7.50 8.25 9.00 55 45 35

Secondary 8.00 8.50 9.50 45 40 35

Aalborg

Prime 7.50 8.00 9.00 45 40 35

Secondary 8.75 9.25 10.25 35 35 25

Triangle area

Prime 7.75 8.25 8.50 45 40 35

Secondary 8.00 8.50 9.00 40 35 35

Odense

Prime 8.00 8.50 9.00 50 45 35

Secondary 8.50 9.50 10.50 40 35 20


Vacant industrial & logistics space in sq m, in % of building stock and forecast for the next 3-6 months


Industrial & Logistics



Central Copenhagen 603,300 3.3 -0.7 -0.2

North Zealand 188,900 4.5 -0.5 0.5

East Zealand 106,600 3.1 0.4 0.1

West- and South Zealand 184,000 1.9 0.1 -0.9

East Jutland 645,000 4.0 0.2 -0.5

Region North Jutland 226,800 1.7 -0.1 -0.4

South Jutland 555,700 2.9 0.4 -0.3

Funen (including Odense) 291,400 3.1 0.1 -0.3


MARKET UPDATE EDCI N D U S T R I A L & L O G I S T I C S

M A Y 2 0 1 6

Industrial & Logistics Building stock Vacancy sq m Change sq m QoQ As % of building stock Change in % QoQ

Central Copenhagen 5,269,800 13,200 1,500 0.3% 0.1%

Copenhagen area 7,799,300 401,000 -92,900 5.1% -1.2%

North Zealand 4,166,400 188,900 -21,300 4.5% -0.5%

Bornholm 838,000 200 0 0.0% 0.0%

Capital Region of Denmark 18,073,500 603,300 -112,700 3.3% -0.7%

East Zealand 3,489,300 106,600 12,700 3.1% 0.4%

West- and south Zealand 9,878,500 184,000 5,800 1.9% 0.1%

Region Zealand 13,367,800 290,600 18,500 2.2% 0.2%

Funen (including Odense) 9,276,100 291,400 13,700 3.1% 0.1%

South Jutland 19,373,300 555,700 67,500 2.9% 0.4%


East Jutland 16,166,400 645,000 36,300 4.0% 0.2%

West Jutland 12,930,200 385,100 -45,400 3.0% -0.3%

Central Jutland Region 29,096,600 1,030,200 -9,000 3.5% -0.1%

North Jutland 13,711,000 226,800 -16,400 1.7% -0.1%

Region North Jutland 13,711,000 226,800 -16,400 1.7% -0.1%

Denmark, total 102,898,200 2,998,100 -38,300 2.9% -0.1%



Vacant industrial & logistics space in sq m, in % of building stock and forecast for the next 3-6 months

5%

4%

3%

2%

1%

0%

184,000 sq m

603,300 sq m

188,900 sq m

106,600 sq m

645,000 sq m

226,800 sq m

555,700 sq m291,400 sq m

København By Nordsjælland Østsjælland Vest- og Sydsjælland Østjylland Region Nordjylland Sydjylland Fyn



MARKET UPDATE EDCR E S I D E N T I A L R E N TA L P R O P E RT I E S

M AY 2 0 1 6

Older residential rental properties Fully developed older residential rental properties

Facility class A Facility class B Facility class C Facility class A Facility class B Facility class A Facility class B

Copenhagen Yield in % Yield in % Yearly market rent in € / sq m

Prime 2.50 2.75 3.50 4.50 4.75 205 190

Secondary 3.00 3.50 4.25 5.00 5.25 185 170

Tertiary 4.00 4.50 5.50 5.25 5.50 150 135

North Zealand

Prime 4.75 5.00 5.25 5.00 5.25 205 175

Secondary 5.00 5.25 5.50 5.25 5.75 190 165

Tertiary 5.25 5.50 5.25 5.75 6.00 175 150

East Zealand

Prime 4.50 5.50 6.00 5.00 5.50 155 145

Secondary 5.00 6.50 7.75 5.75 6.50 135 125

Tertiary 6.25 8.00 9.50 6.50 8.00 95 85


Prime 5.50 6.50 7.50 5.75 6.50 135 115

Secondary 6.00 7.00 8.00 6.50 7.50 110 95

Tertiary 7.00 8.50 10.00 8.00 9.00 85 75

Aarhus

Prime 2.50 2.75 3.00 3.75 4.25 190 170

Secondary 3.00 3.25 3.50 4.25 5.00 165 145

Tertiary 4.00 4.25 4.50 5.00 5.50 145 115

Aalborg

Prime 3.75 4.25 4.75 4.50 4.75

Secondary 4.50 5.00 5.25 5.00 5.25

Tertiary 6.25 6.50 7.00 5.75 6.00

Triangle area

Prime 5.75 6.50 7.25 5.75 6.25

Secondary 6.50 7.00 8.00 6.50 7.00

Tertiary 7.75 8.00 8.50 7.75 8.00

Odense

Prime 4.25 5.00 5.75 5.00 5.50Secondary 5.00 5.75 6.00 5.50 6.00


Note: ”Older residential rental properties” and “Fully developed older residential rental properties” are regulated by the provisions in the Danish Rent Act (Lejeloven) and the Housing Regula-tion Act (Boligreguleringsloven) concerning cost driven rental levels.

“Newer residential rental properties” taken in to use no earlier than 1 April 1992 are subject to the rules concerning free market rent, pursuant to the Housing Regulation Act § 15 A and others.

Source: EDC Erhverv Poul Erik Bech. Data as of April 1 2016. Forecasts: All forecasts reflect our expectations for the development over the next 3 to 6 months.

Residential rental properties

Newer residential rental properties

Facility class A Facility class B Facility class A Facility class B


Prime 4.25 4.75 265 230

Secondary 5.00 5.25 235 205

Tertiary 5.25 5.50 205 170

North Zealand

Prime 5.00 5.25 205 175

Secondary 5.00 5.50 185 155

Tertiary 5.25 5.75 150 145

East Zealand

Prime 5.00 6.00 165 135

Secondary 5.50 7.00 135 110

Tertiary 6.00 8.50 110 85


Prime 5.50 6.50 135 115

Secondary 6.50 7.50 125 105

Tertiary 7.00 8.50 105 85

Aarhus

Prime 4.25 4.25 215 190Secondary 4.50 4.75 185 150Tertiary 5.00 5.25 165 135

Aalborg

Prime 4.50 4.75 165 135

Secondary 5.25 5.50 130 115

Tertiary 5.75 6.25 115 110

Triangle area

Prime 5.50 6.25 150 130

Secondary 6.50 6.75 110 95

Odense

Prime 4.75 5.25 175 130

Secondary 5.75 6.00 145 115

Residential rental properties


MARKET UPDATE EDC

Hard work, ethics and a solid business sense

– were the three pillars on which I founded my company in 1978. These core values are still the same and their legitimacy has been confirmed by good results, solid growth and satisfied clients.

Hard work is part of our culture which is deeply rooted throughout the company. Every day our employees do their utmost to provide our clients with knowledge-based advice and first-class service and our phones are open from 7 a.m. to 9. p.m. - 365 days a year.

Our ethics mean you can have confidence in us; in our dedication and our business ethics, in our way of working together, and in our transparent processes that provide our clients with security and overview.

A solid business sense is your guarantee for a satisfactory and profitable business outcome. Our focus is representing our clients and their interests in the most optimal way possible. The performance of our experienced specialists is continuously assessed with regards to competence, performance and negotiating skills to ensure our clients always have confidence in the quality of our services.

Nationwide commercial real estate company – with local knowledge

Our commitment to our core values has turned EDC Poul Erik Bech in to a nationwide company with a strong presence in Denmark. Our 15 commercial offices ensure that we have in-depth knowledge of the local area and the market as a whole. We continuously work actively and highly focused to have the industry’s most powerful network in order to be up to date with the changing market and our clients’ needs.

We look forward to working with you.

Poul Erik BechChairman

M A Y 2 0 1 6

International division

Purchases

Letting services

Sale & Lease

BackAdvisory

Property & facilities

management

Developer advisory

Selling of development

projects

Selling

Valuations(RICS)

EDC Property Invest

– a complete solution for commercial property


MARKET UPDATE EDCM A Y 2 0 1 6

Why invest in Danish real estate?

• Low transaction costs

• High degree of market transparency and stability

• Low financing rates through Danish mortgage credit institutions

• Solid key economic indicators

• AAA/A-1+ credit rating and stable outlook** S&P as of 3 May 2016.

Low financing rates

• Low origination costs

• Low APR compared to the majority of European markets

• Highly transparent, stable and liquid mortgage bond market

• Flexible loans on conditions close to funding conditions of capital market players

Why invest in Denmark

The Danish mortgage system

Loan

Borrower InvestorMortgage institution

Repayment. interest and

marginRepayment and interest

Bonds

Investment


MARKET UPDATE EDCM A Y 2 0 1 6

• Low financing rate: Bond yield plus a small markup (margin) for the mortgage bank

• Debt/value ratio: Financing through the mortgage institutions, normally up to 60% of valuation

• Loan maturity: Min. 1 year (yearly refinancing), max. 20 years

• Payment structure: Floating or fixed rates, with or without quarterly principal repayments

• Each new loan is in principle funded by the issuance of new mortgage bonds of equal size and identical cash flow and maturity characteristics, called the Balance Principle. Proceeds from the sale of the bonds are passed on to the borrower and similarly, interest and principal payments are passed directly to investors holding mortgage bonds

• The Danish mortgage institutions have existed since 1850 and are considered very strong and very low risk financial instruments

• In terms of volume outstanding, Denmark has the second largest share of the mortgage bond market in Europe

• There has never been an incidence of default on a Danish mortgage bond

Low transaction costs

As buyer:

Deed registration: 0.6% of purchase price + € 190

Mortgage: 1.5% of the mortgage’s principal +€ 190

Costs for own advisor, lawyer, agent etc. are typically very low

As seller:

Agent, lawyer etc. varies, but typically between 1 - 4% of purchase price depending on deal size

Denmark is known to have some of the lowest roundtrip property transactions costs

2015 2016 2017

GDP growth (%), YOY

Denmark 1.2 1.2 1.9

EU 2.0 1.8 1.9

Unemployment rate (%)

Denmark 6.2 6.0 5.7

EU 9.4 8.9 8.5

Current account balance (% of GDP)

Denmark 7.0 6.3 6.2

EU 2.0 2.2 2.1

Inflation (%)

Denmark 0.2 0.3 1.5

EU 0.0 0.3 1.5

Source: The Economic forecast (Spring 2016) from the European Commission.

Solid key economic indicatorsHigh degree of transparency

Denmark is among the most transparent markets in Euro-pe and worldwide. The transparent Danish market provi-des the investor with a secure and low risk environment for foreign direct investment.

Investments in Denmark are conducted in a market which benefits from a highly transparent and stable legal and re-gulatory framework coupled with a simple transaction process.

Lease structure

• Rent adjustment, normally adjusted yearly with the rate of inflation or a fixed minimum rate

• Rent review every fourth year. Terms are flexible

• It is possible to agree on a threshold for the rent. Eg. the rent cannot drop further than the rent in force at the start of the tenancy

• The landlord and the tenant can freely agree on the rent amount as long as the rent is not unreasonable or contrary to sound business practices

• Lease length: There are no statutory restrictions on the duration of a commercial lease agreement. It is normal to have interminable leases in place

• The leading real estate agency in Denmark in the areas of selling, leasing, valuation and advisory

• Founded in 1978, operating nationwide across 15 commercial real estate branches, 52 residential real estate branches, and finally 3 residential real estate branches in France and Sweden.

• Owner of the property management company LEA Ejendomspartner

• More than 450 employees

Our greatest strength is our nationwide presence and local knowledge with 70 commercial specialists servicing our clients. We are chartered surveyors, valuers and certified members of RICS. We espe-cially deal with the following types of properties:

• Investment properties, properties for rent and owner-user properties

• Offices, high street retail, industrial & logistics and mixed-use properties

• Residential rental properties

• Land and development projects

• Hotels, restaurants and other properties in the leisure sector

We offer our clients a wide range of services:

• Execution of investment transactions of single assets. portfolios and on a company level

• Letting services

• Valuations (RICS)

• Sale and Lease Back

• Due diligence

• Project development consultancy

• Property and facilities management

• Capital structure advisory

• Tenant and landlord representation

• EDC Location Search

• EDC PropertySWAP®

• Research services

• Bespoke consultancy and market study services

CHARTERED SURVEYORS & INTERNATIONAL PROPERTY CONSULTANTS

Copenhagen Herlev Hillerod Roskilde +45 33 30 10 00 • [email protected] +45 44 57 03 37 • [email protected] +45 48 26 99 10 • [email protected] +45 46 33 33 33 • [email protected]

Koge Naestved Odense Kolding +45 55 35 55 53 • [email protected] +45 55 78 66 03 • [email protected] +45 58 58 82 00 • [email protected] +45 76 33 80 10 • [email protected]

Aabenraa Sonderborg Esbjerg Vejle +45 73 33 13 00 • [email protected] +45 58 58 80 20 • [email protected] +45 76 10 48 00 • [email protected] +45 75 83 13 11 • [email protected]

Silkeborg Aarhus Aalborg +45 86 82 62 00 • [email protected] +45 87 30 99 30 • [email protected] +45 96 31 49 00 • [email protected]

Read more: edc.dk/erhverv

Office locations:

market update may 2016

Documents