Colliers Copenhagen Property Market Report 2019

Odense in brief – Market Report 2019

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Odense in brief

Denmark’s robotics centre attracts strong investor demand Like other major cities outside Copenhagen, Odense is generally thriving. In 2018, invest- ment demand was strong in particular for newly built residential properties in the city centre and on the inner harbour front. Warehouse and logistics facilities with motorway proximity as well as up-to-date office properties along major arterial roads attracted strong demand, too, unlike old and outdated offices mainly in northern Odense. Demand weakened also for retail properties, driving up vacancy rates in this segment even in the high-street market. Urban renewal a strong growth driver in Odense The favourable developments in Odense are driven largely by the city’s ongoing large-scale urban renewal schemes, involving e.g. an expansion of the city centre by closing the main arterial road bisecting the city, Thomas B. Thriges Gade, to give way to an entire new city district by 2020. The same year, a new light rail line will cut across the city. In addition, a new superhospital is scheduled for completion in 2022. These investments combined are expected to lift the city’s long-term prospects, with forecasts suggesting 10.1% population growth by 2045. In addition, Odense is a thriving centre for robotics, with a large cluster of businesses in this field attracting qualified labour and retaining many graduates. Mounting investor demand The city’s bright outlook for continued growth and investments in revitalisation as well as the possibility of achieving a yield premium over Copenhagen and Aarhus investments have served to attract a broad range of investors, also from abroad. In 2018, Swedish investor Niam acquired two Odense residential rental properties at DKK 382.5m and UK investor M7 Real Estate acquired an office building in a DKK 46.6m transaction. Pressure on residential rents in secondary locations Most segments are expected to see sustained strong demand. Due to massive added supply of rental housing, we believe that residential rent levels may come under pres- sure in less attractive locations. On the Odense waterfront, however, rents continue to rise. Similarly, industrial/logistics rents are expected to climb, driven by sustained strong demand. Office occupational demand is predicted to pick up, in particular in central loca- tions, as the first stage of the light rail and the large-scale urban renewal schemes near completion. Similarly, the high-street retail market is expected to recover.

Odense – Denmark’s third largest city

The Region of Southern Denmark (Region Syddanmark) 204,080 Population (1 Oct. 2018) Thanks to large-scale urban renewal schemes, Odense offers many attractive investment opportunities, including residential and office properties with good accessibility and parking facilities An increasing number of investors choose to invest in the Odense property market as many segments offer a yield premium relative to the Copenhagen market

Note: Population figure for City of Odense. Source: Statistics Denmark

 JOSEPH ALBERTI, joseph.alberti@colliers.com

WWW For an introduction to various Odense districts, please refer to the extended online edition of this Market Report, www.colliers.dk