We will all remember 2020 as a year of challenges, limitations and new beginnings. What of commercial real estate? Across the European markets, many of the conventional measures of market activity, such as investor turnover, weakened in 2020. But some markets remained surprisingly resilient – Denmark being one of them.
Although the deal data is still coming in, preliminary figures indicate another strong year for the Danish CRE investment market. The full year 2020 investment volume will land around DKK 70bn, being thus well ahead of the level achieved in 2019. And although this result is very positive, it gains even more in importance when taken into the Nordic context. According to CBRE data, Denmark was the only Nordic market to record an increase in investment activity in 2020. Sweden, Norway and Finland experienced full year declines between 5% and 13%. Moreover, if looking at the quarters directly affected by the pandemics (Q2-Q4 2020), Denmark was once again the only Nordic market to record a positive development of investment activity over the same period last year.
The 2020 full year result is a clear sign of the level of capital available as well as investors’ perception of Denmark as an attractive destination for capital allocation. Cross-border investors dominated the market, being responsible for roughly 60% of the total investment activity. Swedish investors were particularly active, both on the buyer and the seller side. Residential cemented its position as the largest sector, representing more than 60% of the total investment volume, largely on back of the DKK 12bn worth Heimstaden deal.
What of 2021?
The year is expected to start strongly, with some spillover effect from 2020 and several large deals closing in Q1. General sentiment in the market is very optimistic, supported by and ample unallocated capital and pent up demand for Danish prime property. CBRE expects investor appetite for commercial real estate to strengthen in the coming quarters. Another busy year is in sight.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our global website at www.cbre.com.