Docstoc

Facts

Document Sample
Facts Powered By Docstoc
					                                                                                                                                                                   Facts...
The DAnish ProPerTy MArkeT                                                                                                                                        August 2008


Property transaction costs and market liquidity
Property transfer tax in international comparison                    Sale of commerical real estate in Denmark




                                      CBRE
                                      Real Estate Market
                                      Characteristics 2006
                                                                                                                                  Statistics Denmark
                                                                                                                                  Excl. residential and mixed      The DAnish ProPerTy MArkeT
                                                                                                                                  residential/commercial
                                                                                                                                  property sale. 2007 figures
                                                                                                                                  are preliminary.
                                                                                                                                                                   The Danish commercial property market offers a wide variety of real estate for lease or purchase.
                                                                                                                                                                   Foreign companies will find that the costs of establishing in Denmark are competitive with regard to
                                                                                                                                                                   transaction costs as well as rental levels.
Real estate market practices and procedures
                                                                                                                                                                   The rental occupier market is well balanced. There are ample possibilities for development and also
Area measurement           Gross external floor area in m.                                                                                                         robust demand from occupiers. Stability is a general feature in the Danish market with moderate
Property transfer tax
                                                                                                                                                                   volatility in rents and other occupation costs.
                           Real estate transactions are taxed at 0.6% of purchase price as stamp duty.
                                                                                                                                                                   Commercial property transactions in Denmark are facilitated by a number of property consultancy
Property tax
                           Property tax is 0.06%-2.4% of the official real estate value depending on municipality.
                           Municipalities may also chose to tax the value of commercial buildings by up to 1%.                                                     agencies with local knowledge and international experience, many offering corporate real estate
                           Usually quoted as annual net rent in DKK per m2. Rent is normally paid monthly or quarterly in                                          services in relation to location and relocation.
Rent                       advance. The rent is escalated annually by the net price index, often with a minimum annual
                           increase of 2–3%.                                                                                                                       This publication is a brief introduction to the Danish property market.
Incentives                 Rent free periods are normally not granted, but are negotiable.
                           There is no standard as to whether the tenant or landlord is responsible for the payment of service                                     Denmark offers
Service charges and        costs. Often lease contracts are based on a net rent with the landlord recovering other costs from
other costs                the tenant. Tenants will then pay separately for service charges, consumption costs and taxes as                                        •       A stable and flexible property market
                           specified in the lease contract. However, this is normally negotiable.                                                                  •       A wide variety of commercial real estate for lease or purchase
Service charges
                           Often include insurance, common electric, maintenance, cleaning, security, management fees and                                          •       Very competitive occupancy costs for high-quality offices
                           property tax.
Consumption costs          Often include water, heating and electricity.                                                                                           •       Excellent infrastructure in relation to most industrial and logistics properties
VAT                        VAT of 25% is payable on rent and is for most companies fully recoverable by the tenant.                                                •       Good possibilities for expansion and relocation
Security deposits          Usually equivalent to 3-6 months rent based on the mutual agreement stated in the contract.                                             •       Low property transaction costs
Tenants obligations        To return premises in the same state, allowing for wear and tear.
                           A lease continues until either the tenant or the landlord terminates the contract. Consequently an     The practices and procedures
Lease length and terms
                           initial non-termination period for the lease is agreed upon. Normally the period for the landlord is   are typical terms based on
                           longer than for the tenant Once the initial period of non-termination has expired, the contract        normal lease contracts.          Danish commercial rent levels in international comparison
                           can be terminated by the tenant with usually 3-12 months’ written notice.
                                                                                                                                  Transactions in specific cases
General
                           Wide remit to negotiate terms of lease.                                                                should always be based on        Prime office rent                   EUR/m2 per annum       Prime industrial rents          EUR/m2 per annum
                           Sublease is usually permitted with the landlord’s consent.                                             advise for that case.                   London City, UK                                                   Oslo, NO
                                                                                                                                                                                  Paris, FR                                               Helsinki, FI
                                                                                                                                                                                 Dublin, IE
                                                                                                                                                                                                                                           Dublin, IE
                                                                                                                                                                                  Oslo, NO
                                                                                                                                                                                                                                            Paris, FR
                                                                                                                                                                            Stockholm, SE
                                                                                                                                                                   Frankfurt    am Main ,   DE                                            Munich, DE
Whether your company considers to relocate, consolidate, set up new                            Invest in Denmark                                                                                                              Frankfurt   am Main ,   DE
                                                                                                                                                                               Warsaw, PL
production facilities, is on the lookout for new innovation partners or                        2, Asiatisk Plads                                                               Munich, DE                                        Copenhagen, DK

other strategic business solutions in Europe, Invest in Denmark is a                           DK-1448 Copenhagen K                                                             Helsinki, FI                                       Amsterdam, NL                                 Made in cooperation with
                                                                                                                                                                           Amsterdam, NL
good place to begin. We provide customised information and services                            Tel. +45 33 92 11 16                                                           Brussels, BE
                                                                                                                                                                                                                                          Warsaw, PL

free of charge and in full confidentiality.                                                    Fax +45 33 92 07 17                                                           Hamburg, DE
                                                                                                                                                                                                                                    Stockholm, SE

                                                                                                                                                                                                                                     Hamburg, DE
                                                                                                                                                                                 Berlin, DE
                                                                                                                                                                                                                                   Major provincial
                                                                                                                                                                          Copenhagen, DK                                                 cities, DK

                                                                                                                                                                               Aarhus, DK                                                  Berlin, DE
                                                                                                                                                                               Other major                                            Brussels, BE
                                                                                                                                                                       provincial cities, DK

The information stated in this fact sheet may contain errors or omissions. Invest in Denmark and our co-operation partners
                                                                                                                                                                   CB Richard Ellis Cederholm
disclaim any and all liability for any loss or damage caused by such errors or omissions.
The DAnish ProPerTy MArkeT                                                                                                                             2                                    The DAnish ProPerTy MArkeT                                                                                                                              


Prime office rent trends in Copenhagen                            Prime office rent and occupancy costs                                                                                     Industrial rent trends in Copenhagen                               Prime industrial and logistics rent

                                                                  Annual prime net rent                                                                                                                                                                        Annual prime net rent
                                                                                                                  Other major
                                                                                Copenhagen         Aarhus                                                                                                                                                                                               Major provincial
                                                                                                                provincial cities                                                                                                                                                 Copenhagen
                                                                                                                                                                                                                                                                                                        industrial areas
                                                                   DKK/m2        1,700-1,850     1,300-1,500       900-1,100
                                                                                                                                                                                                                                                                 DKK/m2              500-525               375-425
                                                                   EUR/ m2         228-248         174-201          121-147
                                                                                                                                                                                                                                                                 EUR/ m2              67-70                  50-57
                                                                   USD/ft2          34-36           26-30            18-22
                                                                                                                                                                                                                                                                 USD/ft2                  10                  7-8
                                                                  Annual gross occupancy costs
                                                                                                                  Other major                                                                                                                                                                    CB Richard Ellis Cederholm
                                                                                Copenhagen         Aarhus
                                                                                                                provincial cities
                                                                   DKK/m2        2,000-2,250     1,500-1,700       1,100-1,300
                                                                   EUR/ m2        268-302          201-228          147-174
                                                                   USD/ft2          39-44           30-34             22-26
                                                                                                                                                                                            The industrial property market

                                                                                                       CB Richard Ellis Cederholm                                                           The stock of industrial properties in Denmark comprises 94.1 million m2, which includes a wide variety such as
                                                                                                                                                                                            manufacturing space, warehouses and distribution/logistics facilities.
The office property market
                                                                                                                                                                                            The transformation of the industrial sector from traditional production to high-productivity activities is reflected in
The Danish property market offers a wide variety of commercial real estate for lease or purchase.
                                                                                                                                                                                            the demand for industrial property and hence the stock. Many industrial occupiers with specific needs prefer newly
The office stock is 21.6 million m2 with a large concentration in Copenhagen. Almost half of the office stock in                                                                            developed build-to-suit facilities. At the same time rapid international growth in trade increases the demand for
Denmark is located in the Copenhagen Capital Region. Major office markets outside Copenhagen include                                                                                        logistic space. The overall vacancy rate of industrial space is low and consists primarily of outdated factory
provincial cities such as Aarhus, Aalborg, Odense and ”The Triangle Area” of Vejle, Fredericia and Kolding.                                                                                 buildings.
Since 2005 the demand for offices has been stimulated by high economic activity. As a consequence, office vacancy                                                                           The industrial and logistics sector is primarily based on the road network, and accessibility is an important
rates in Denmark are relatively low compared to most other European markets.                                                                                                                parameter regarding the location of this type of real estate. Industrial parks and transportation centres are located in
                                                                                                                                                                                            the outskirts of all major cities with good access to the highway system.
For a potential tenant or purchaser it is usually not difficult to find suitable space. However, the current market
situation means that it may take some time to find the right property with regard to desired location, quality, etc.                                                                        “The Southern Corridor” south of Copenhagen is an important zone for industrial parks, distribution facilities and
An increasing number of companies relocate to new offices in newly developed areas. In Copenhagen a large                                                                                   transport centres located around Køge, Greve Main, Høje Taastrup and Ishøj. Many high-tech production facilities
number of offices are being developed in Ørestad and in the harbour areas. Most new developments are domiciles                                                                              are located north of Copenhagen in a cluster of international biotech companies.
or on a pre-let basis.
                                                                                                                                                                                            “The Triangle Area” in eastern Jutland has a large concentration of business parks. The area provides land for
Office occupancy costs in Copenhagen are very competitive in a European context and are significantly lower than                                                                            industrial and distribution/logistics use, and the development potential is facilitated by the ample availability of sites
in other Scandinavian capitals. The net rents for high quality, well located offices in Copenhagen are DKK 1,700-                                                                           for sale.
1,850 per m2 per annum. Rents are lower outside the prime office locations (the central business district and in the
                                                                                                                                                                                            Rental levels for the state-of-the-art modern industrial and logistics properties with good access to the highway
harbour areas) and in provincial cities. Rents have increased gradually since 2006, but generally the office market is
                                                                                                                                                                                            system are currently in the range of DKK/m2 450-525 outside Copenhagen, and DKK/m2 375-425 in major
characterized by relatively low volatility in rental trends.
                                                                                                                                                                                            provincial industrial zones.
Some of the most significant Copenhagen office submarkets are:
                                                                                                                                                                                            Traditionally, there has been a preference for owner occupation among Danish companies. This is, however,
Central Business District: The historic city centre containing predominantly older low-rise buildings. Offices are                                                                          changing as sale and lease back is becoming an increasingly attractive option for many Danish owner occupiers who
typically 200-1,000 m2, but larger offices are available. Net rents are DKK/m2 1,300-1,750.                                                                                                 want to focus on their core business. Also the profile of industrial occupiers is becoming more international. As a
                                                                                                                                                                                            consequence, the overall liquidity of the industrial and logistics investment property market has improved during
Harbour North, Central & Tuborg: Locations along the waterfront have emerged as new prime office destinations.
                                                                                                                                                                                            recent years. The number of properties transacted has increased, and so has the average price of industrial and
Modern high-quality buildings with efficient utilization of space have made premises along the waterfront popular.
                                                                                                                                                                                            logistics properties sold.
The area contains many development projects and offers opportunities for companies looking for large offices and
domiciles. Net rents are DKK/m2 1,600-1,850.
Ørestad: A new-town south of the city centre. Ørestad is currently the largest office and residential development                                                                           Sale of industrial and logistic real estate in Denmark 2002-2007
area in Denmmark. Ørestad is popular for companies looking for large offices and domiciles. It also has an excellent                                                                                                                         2002     2003     2004        2005   2006         2007
infrastructure including a metro line, regional and international train connections, in the vicinity of Copenhagen                                                                            Sales turnover (DKKbn)                           4.9      5.7      6.3        9.6    15.9        15.6
Airport and Sweden. Net rents are DKK/m2 1,200-1,500.                                                                                                                                         Average price per property (DKKmillion)          5.1      6.1      5.7        7.0    10.1        11.4
                                                                                                                                                                                                                                                                                                         Statistics Denmark
                                                                                                                                                                                              Number of properties sold (1,000)                1.0      0.9      1.1        1.4     1.6         1.4      2007 figures are preliminary.

DISCLAIMER 2008 CB Richard Ellis Cederholm A/S
Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example
only and do not represent the current or future performance of the market. This information is designed exclusively for use by CB Richard Ellis Cederholm clients, and cannot be reproduced without prior written permission of CB Richard Ellis Cederholm A/S.

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:16
posted:12/9/2010
language:English
pages:2