Newsletter_Q2_2018_UK

Newsletter Q2 2018

At the same time, the net initial yields achievable on property investments in Denmark are at least on a par with – and most often exceed – the net initial yields achievable in Established World Cities (e.g. London and Paris) and

included in the underlying statistics. We therefore venture the claim that Copenhagen will be given a higher ranking in 2018, in particular if residential property investments are included in the data basis.

cities with similar growth momentum and invest- ment intensity as well as largely similar economic, socio-economic and demo- graphic conditions (e.g. Amsterdam and Frankfurt).

While Established World Cities continue to attract the largest capital inflows, it is remarkable to note that in terms of intensity and growth momentum, the transaction volumes recorded in the New World

In addition, Denmark is generally known as a “safe-haven” investment destination and one of very few countries to issue AAA-rated government bonds.

When investors factor in these conditions in their pursuit of favourable risk-adjusted returns, Denmark is a fairly obvious choice, in particular the capital of Copenhagen, perfectly in line with the prevalent globalisation trend. Will the intensive investment activity in Denmark and Copenhagen continue? All in all, Sadolin & Albæk believes that Copen- hagen is set to continue its ascent to the top of the global city elite in terms of investment intensity and momentum. Foreign investors continue to display a strong appetite for Denmark and Copenhagen, and quite rightly so. As Copenhagen and Denmark in general are becoming increasingly familiar and common markets, where large international investors have exposure, we believe that the favourable trend is likely to continue. Although growth in overall trans- action volume will hardly be as strong as seen in the past three years, we expect a continued increase in

Cities are clearly the highest. As indicated by the index figure, Amsterdam, Copenhagen and Helsinki are heading the field, whereas Oslo, judging by index movements, will hardly retain its leading posi- tion. It is therefore quite likely that Copenhagen may make it into the top-three when the index is updated to include 2017 figures. Copenhagen’s top ranking is well-justified There are numerous reasons why investors are increasingly choosing to invest in Copenhagen. For instance, Copenhagen has a top ranking in the so-called City Momentum Index by JLL, which compares selected cities in terms of socio-economic and commercial real estate momentum as well as competitive future-proofing. The index measures the cities according to multiple parameters, including technology, educational level, environmental quality, transparency, infrastructure and international patent applications. Copenhagen ranks number 6 in the European index and number 22 globally. In addition, Denmark is generally known as a “safe- haven” investment destination and one of very few countries to issue AAA-rated government bonds. Danish economy is strong and healthy, the balance of payments positive without fail since the begin- ning of the 1990s, and the unemployment rate is relatively low compared to both the United States and the rest of Europe. Moreover, Denmark and Copenhagen are characterised by high political transparency and virtually no corruption.

foreign investments. All the while, Copenhagen is quietly edging its way up to take a top posi- tion among the world cities that enjoy the best framework conditions for property investments.

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