MR 2018

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Copenhagen Property Market Report 2018

The boom in the F&B industry has greatly intensified competition, with a surge in food courts, etc.

courts are expected to remain a prominent feature of Copenhagen longer term. However, Copenhagen Street Food, although immensely popular, closed down at year-end 2017 as the fixed-term ground lease expired. Papirøen (or Christiansholm as is its real name) is earmarked for redevelopment into a mixed-use residential/culture-oriented area. But arrangements for new food courts are already in motion, with an off-shoot of the Copenhagen Street Food concept opening at Refshaleøen this spring, focusing on street food, culture and entrepreneurial ventures. In November 2017, a new food court, ”Tivoli Food Hall”, opened at Tivoli Gardens in central Copenhagen as part of an expansion scheme. Indeed, food courts are expected to become a common feature of most parts of Copenhagen longer term. This summer, a new food court with some 30-35 market stalls is scheduled to open in the building complex known as Boltens Gaard, near Kongens Nytorv. This initiative is expected to revitalise Boltens Gaard, which was formerly a nightclub and music venue. In the district of Frederiksberg, behind Frederiksberg City Hall, there are also plans to establish a food court similar to Torvehallerne. In addition, a Copenhagen Street Food- style market is in the pipeline below the raised expressway of Bispeengbuen, today a deserted wasteland. Like “Halvandet” at Refshaleøen, the project on the drawing board for Bispeengbuen serves as an example of how street food and leisure-oriented space may revive secondary or even tertiary locations. Fierce F&B competition is taking its toll Despite the favourable effect on the Copenhagen retail market, including a decline in vacancy rates, the boom in the F&B industry has also greatly intensified competition. In take-away shops and from mobile food carts, fast food is available at affordable prices. As a result, more traditional restaurants and eating places are facing stronger competition for customers. According to HORESTA statistics, the F&B sector has seen an increase in the number of bankruptcies in recent years. Previous analyses by consulting firm Deloitte have shown that 20% of Copenhagen restaurants faced financial difficulties. In the final months of 2017, the street-food market in the highly popular old meatpacking district, “Kødbyens Mad & Marked”, was forced out of business due to various unprofitable activities. By the same token, several stallkeepers at “WestMarket” have been struggling with faltering sales. We therefore recommend continued monitoring of this segment in the years ahead in order to understand the profitability of concept and location. E-commerce is gaining market share E-commerce outperforms all other segments of the retail market in terms of growth, with total online sales having boasted double-digit growth rates for the past eight years. In 2016, aggregate Danish online sales reached an all-time high of more than DKK 100bn, with the sale of physical goods accounting for 37% (source: DIBS). 2017 may turn out to be another record-breaking year, with prospects of aggregate online sales to the tune of DKK 115bn. In addition, according to the database of the European Commission, 81.5% of the Danish population aged 16-74 shopped online in 2016, reflecting a steady upward

In 2016, aggregate Danish online sales reached an all-time high of more than DKK 100bn, with the sale of physical goods accounting for 37%.