The 2023 Danish Young Leaders New Year Reception took place on Thursday 12th January at the office of law firm Bruun & Hjejle in Copenhagen. The evening presented an excellent opportunity to meet fellow real estate professionals as well as hear about both the current capital market outlook and ULI DK Young Leaders plans for the coming year.
After Søren Kopp from Bruun & Hjejle welcomed everyone, he handed over to Nicholas Thurø from Cushman & Wakefield | RED, who shared many interesting insights. This included how transaction volume for Q4 2022 only made up 22% versus usually 35-50%. Further, the 2022 Q4 volume included an unusually large share of owner occupier purchases.
Nicholas also cautioned against expecting the market rent level to follow inflation up. During the past eight years since 2015 the Copenhagen prime office rent was flat despite an average inflation of 1.7%. This was followed by 4.5% p.a. rent growth during 2016-21 alongside the lower average inflation of 1.2%. Thus, a reduction in inflation combined with the prime office rent starting to increase.
RED expects the residential rental demand to remain strong supported by the expensive owner-market, however, investor returns will be negatively impacted by high interest and a capital value impact when owner-occupied apartments experience price decrease.
The office segment will according to RED continue to exhibit a larger risk premium for secondary locations compared with residential as new demand for office is expected to cool given the expected cooling economy.
From ULI, Nadim Stub, chair of the Young Leaders Executive Committee, took us through the past year with ULI and highlighted some of the many exciting events to come.
If you still have not registered as a member of ULI, we strongly encourage you to join today to be able to attend our future events of which many will be members-only. As a member you will get access to the online library of ULI’s with research, best practice and much more. In addition, you get the opportunity to participate in several exciting international events, besides the local events, which is a great opportunity to network with other young talents within the Danish and international real estate industry.