Copenhagen Property Market Report 2020

Property Price Index

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Copenhagen Property Market Report 2020

Renewed increase in property price index

Ny stigning i ejendomsprisindeks

MODEL AND APPROACH For both the Colliers property price index (capital growth) and the net initial yield calcula- tions, we have used a hedonic multiple regres- sion analysis based on empirical analysis of data collected from more than 5,000 property sales and property valuations in the Greater Copenhagen area since 1985, all involving Colliers (pre-2018, Sadolin & Albæk). The model covers all types of commercial prop- erty, except residential, but ƒxed implicit prices are applied for the various property character- istics, mainly location, use, state and condition/ quality, suitability/rationality and economies of scale, as a corrective measure to account for the di§erences between individual properties. In this context, the return applied is the average return, which denotes the most likely return or the return that investors may expect in a random year on the basis of historical returns. The average return should not be mistaken for the expected compound interest on investments or the geometrical average used to measure the compound return on an investment. The risk is measured by the standard deviation of the yearly returns, that is, the average deviation from the mean return. The risk measurement applied here thus provides information on the extent to which the return ˜uctuates around the expected average return.

Danske investeringsejendomme fortsatte i 2019 de senere års tendens med pæne a‘ast. Målt på Colliers’ prisindeks for erhvervsejendomme i Storkøbenhavn blev a‘astet for hele året 11,8% – fordelt på 4,4% i direkte a‘ast fra driften og dertil 7,4% fra værditilvækst. For syvende år i træk steg de nominelle priser på investeringsejendomme og priserne ligger et stykke over de historisk høje niveauer i 2007. Hvis in˜ationen indregnes, så er priserne i 2019 dog kun 5,2% højere end i 2007, og det var først i løbet af 2019, at de reale priser indhentede niveauerne fra årene før ƒnanskrisen. In 2019, Danish investment property continued previous years’ trend of producing fair returns. According to the Colliers commercial property price index for Greater Copenhagen, total average return was 11.8%, with income return accounting for 4.4% and capital growth for 7.4%. For seven years running, nominal commercial property prices have climbed, now at a level well beyond the historically high levels recorded in 2007. Factoring in in˜ation, however, 2019 prices merely exceeded 2007 prices by 5.2%: Only as 2019 wore on did real prices catch up with the levels seen in the years preceding the ƒnancial crisis.

In real terms, commercial property prices now exceed 2007-level

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Nominal values

De ated values

Note: Colliers commercial property price index, Greater Copenhagen (index 100 = Q3 1984), nominal and deŠated values. Source: Colliers

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