Colliers Copenhagen Property Market Report 2019

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Copenhagen Property Market Report 2019

Kongevejen 495b, Holte

Continued weak supply of prime office CBD properties One of the reasons for the relatively weak supply in the current market is that prospective sellers are holding back, finding it difficult to attract buyers willing to accept their price expectations. Another important factor is the existing composition of the group of investors owning most major office CBD properties: Broadly speaking, they may be classified as either strategic or long-term investors. Strategic investors, such as domestic property company Jeudan, focus mainly on central Copenhagen office properties. In recent years, Jeudan has been on the buy-side in a large number of medium-volume transactions. As long as the properties are in line with stated strategies and have been accepted into the portfolios of these investors, they are rarely put on the market. Investors operating with longer investment horizons, including pension funds, that invest in central office properties are typically driven mainly by a strong combination of attrac- tive yields and volume rather than geographical location. Although central Copenhagen office properties may fetch good prices in today’s market, many long-term investors are reluctant to divest assets as the proceeds from a sale often need to be reinvested in order to generate income return.