Although volumes for Q1 are still not finalised for Denmark, first quarter results are likely not to show the impact of COVID-19 outbreak.

Preliminary figures are registering an increase of 20-30% in Q1 2020 compared to Q1 2019. These figures contain several large, +DKK 1bn deals, one of them being the sale of Danske Bank's head office, where CBRE advised the seller.

“In the next week or so we expect to have a full picture but the overall feeling is that Q1 is not reflective of the trend we could see in Q2, when investment activity is expected to soften considerably. A ’wait and see’ mode seems to have been intensified. All-equity investors are likely to benefit from the situation. Flexibility and liquidity are expected to be a strong competitive parameter”, says Christian Bro Jansen, Head of Capital Markets at CBRE.  

Debt financing will be crucial for the market in the short term. Therefore, in the coming months, there will be a focus on interest rates and LTV ratios as well as the general statements on lending policy. Low LTV ratios make investments less attractive as they result in lower returns.

“Even before the crisis we have seen rather restrictive attitude expressed by the Danish banks. This has resulted in increased activity from foreign banks and a rise in alternative financing such as forward funding. Since the COVID-19 outbreak, some Danish mortgage lending institutions have announced their focus to be shifted from new clients to the existing ones. In addition, they are likely to put a stop on approving financing in case the acquisition includes hotel, retail and/or older logistics stock”, says Dragana Marina, Head of Research at CBRE.

In terms of yields – the market has seen either yield softening (generally up by 25 bps Q1 on Q4) or a stable trend. Prime Retail Yield has been revised to 2.95% from 2.90% in Q4, while Prime Hotel Yields have softened by 25bps.



About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, 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 also visit our global website at www.cbre.com.


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