The Danish Property Federation Market Statistics vacancy, January Lowest economic vacancy for office in three years in the Capital Region

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1 The Danish Property Federation Market Statistics vacancy, WEB REPORT VACANCY Results Vacancy decreases fourth quarter in a row Vacancy adds up to 8.8 billion DKK Lowest economic vacancy for office in three years in the Capital Region Lowest retail vacancy since 2009 Investment properties in the spring The economic vacancy is 8.8 percent, which is a decrease of 0.2 percentage points compared to last quarter and 0.8 percentage points compared to last year. This is a fourth-quarter-in-a-row improvement and the vacancy rate is now at the same level as in the beginning of The economic vacancy was four percent in Thus, there is room for further decrease, and this can be expected as the Danish economy is in progress. You can say that it is springtime for investment properties and that even lower vacancy rates can be expected in the time to come. An economic vacancy of 8.8 percent corresponds to 8.8 billion DKK waiting for new tenants having an assumption of a total rental value of 100 billion DKK at the Danish investment property market. There will always be a certain economic vacancy and the lost rental value will never reach 0. However, it is realistic that the total economic vacancy will decrease to four percent over time. This would mean 4.8 billion DKK in extra revenue for owners of investment properties as well as more activity. The last four years, the economic vacancy has decreased by 1.8 percentage points corresponding to an extra revenue of 1.8 billion DKK. In, the economic vacancy for office is 11.9 percent. It is a decrease of 0.3 percentage points compared to last quarter and 0.7 percentage points compared to last year. From 2012 to 2016, the economic vacancy has been stable between 11 and 13 percent. Hopefully, the positive trends in Danish economy can that and contribute to a future decrease in vacancy below 11 percent as in 2011, cf. figure 1. The decrease in economic vacancy last quarter as well as the quarter before is due to increases in actual rent for rentals, a slightly decreasing vacancy rent and because of the conversion of vacant offices. In October and January, vacancy rent was higher for existing rentals than for newly rented offices, which brings up the economic vacancy a little. It does not apply to retail where existing rentals in October and January brings down the economic vacancy. This is caused by rental value from newly rented retail rentals in January are higher than the vacancy rent from the new vacant rentals from January. That is one of the essential reasons to the decrease in economic vacancy Table 1. Vacancy rates in Vacancy Vacancy Office Retail Industry Residential Total The vacancy rate covering all sectors also include rent and space for other commercial sectors and secondary premises. 1

2 The Danish Property Federation Market Statistics vacancy, within retail now down by 0.4 percentage points compared to last quarter, giving an economic vacancy rate within retail of 8.0 percent. This is the lowest economic vacancy since 2009 for retail. The economic vacancy for industry is 11.7 percent, implying a decrease of 0.3 percentage points compared to last quarter and 1.0 percentage points compared to last year. A major reason in the quarterly decrease is that the actual rent for industry rentals has increased. While professional properties have a decreasing economic vacancy, the economic vacancy for residential has increased by 0.3 percentage points compared to last quarter. A total economic vacancy within residential of 3.2 percent is still very low, corresponding to the vacancy level for residential in The spatial vacancy is 9.4 percent A decrease in spatial vacancy is also seen, now at 9.4 percent, which is a decrease of 0.2 percentage points compared to last quarter and 1.3 percentage points compared to last year. There is a decreasing economic vacancy for professional properties, while the spatial vacancy has had a slight increase of 0.1 percentage points ending at 2.9 percent. The spatial vacancy for residential has not been above 3.4 percent during the last three years. Spatial vacancy for retail, industry and residential is lower than the economic vacancy, meaning that it is the expensive rentals that are vacant. Regarding office, it is the cheaper rentals which are vacant, as the spatial vacancy is higher than the economic vacancy. Figure 1. Development in economic vacancy Percent 25,00 20,00 15,00 10,00 5,00 0, Office Retail Industry Residential Total Source: The Danish Property Federation and own calculations based on data from IPD Danish Property Index and Oline-ED statistics. Rem.: Data from January 2014 and forward is from the Danish Property Federation. From 2001 to 2013, data is from IPD Danish Property Index has been processed based on differences in level in In year 2000, office data from Oline-ED statistics has been included. Methods are not identical, which is why there is a gap between October 2013 and January From January 2014 data is quarterly and before this annual. From 2014 there is a larger base of data. 2

3 The Danish Property Federation Market Statistics vacancy, Office Still low vacancy The economic vacancy rate for office continues to decrease, resulting in an economic vacancy rate on national level at 11.9 percent. This is a decrease of 0.3 percentage points compared to last quarter and a decrease of 0.7 percentage points compared to last year. The spatial vacancy rate on national level has also decreased by 0.3 percentage points. It is more than a year ago that the economic vacancy rate was increasing. At regional level, it is only the Northern Jutland Region that does not have a decrease in the economic vacancy rate compared to last quarter. The economic vacancy rate has increased by 1.4 percentage points in the Northern Jutland Region, while the Capital Region, the Northern Zealand Region, the Southern Denmark Region, and the Mid Jutland Region experience a decrease of 0.2, 0.5, 0.6, and 1.6 percentage points respectively. It is only the Zealand Region and the Southern Denmark Region that lie below the national average. The decrease in the Mid Jutland Region is based on a decrease of 2.0 percentage points in the economic vacancy rate in Aarhus and a decrease of 0.2 percentage points in the rest of the region. The economic vacancy in the Capital Region is 12.0 percent, the lowest level over the last three years. Retail Fine decrease in the economic vacancy Vacancy for retail has decreased second quarter in a row. This means that the economic vacancy at national average is 8.0 percent, which is 0.4 percentage points lower than last quarter and 0.1 percentage points lower than January last year. The national decrease is due to a decrease in the Capital Region, the Zealand Region, the Southern Denmark Region, and the Northern Jutland Region. Especially the Zealand Region and the Northern Jutland region experience decrease of 2.2 and 1.1. percentage points respectively. The Zealand Region suffers from the fact that both Eastern and Western and Southern Zealand decrease with 1.9 and 2.7 percentage points respectively. The Capital Region and the Southern Denmark Region decrease with 0.3 and 0.5 percentage points respectively, while the Mid Jutland Region increases with 1.1 percentage points compared to last quarter. The increase in the Mid Jutland Region is due to an increase in vacancy rate in Aarhus of 1.4 percentage points compared to last quarter. The Capital Region has the lowest economic vacancy in since

4 The Danish Property Federation Market Statistics vacancy, INTERAKTIV WEBRAPPORT TOMGANG Industry Decreasing vacancy Vacancy for industry has decreased by 0.3 percentage points and is now at 11.7 percent. Compared to same quarter last year the vacancy has decreased by 1.0 percentage point. Spatial vacancy also continues to decrease and the level is 3.1 percentage points lower than same quarter last year. In the Capital Region, vacancy decreases with 0.3 percentage point, coming from a decrease in Other Copenhagen & area of 0.6 percentage point. The economic vacancy for industry in is lower than all the quarters in the period The highest quarterly decrease is in the Zealand Region, where the economic vacancy decreases with 1.2 percentage point. In the Mid Jutland Region, the economic vacancy decreases with 0.1 percentage points compared to last quarter. In the Southern Denmark Region, the vacancy decreases with 0.4 percentage points compared to last quarter, but it has increased with 2.4 percentage points compared to same quarter last year. Residential Slightly increasing vacancy The economic vacancy for residential is still low, but there is an increase of 0.3 percentage points on national level compared to last quarter. Compared to the same period last year, the vacancy is und with regards to both the economic and spatial vacancy. In the Capital Region, the vacancy follows the national development with a slight increase, primarily from Other Copenhagen & Area. In Northern Zealand, the economic vacancy decreases with 1.0 percentage point. Vacancy in the Southern Denmark Region and the Mid Jutland Region increase by 0.5 and 0.6 percentage points respectively. In the Mid Jutland Region, especially Aarhus stands for an increase 0.7 compared to last quarter. The lowest vacancy of only 2.0 percent is still found in the Southern Denmark Region. In the Northern Jutland Region, the vacancy decreases with 0.1 percentage point. Compared to the same quarter last year, the vacancy has increased by 2.1 percentage point, although from a low level. The highest regional decrease is found in the Zealand Region, where the economic vacancy decreases with 0.6 percentage point. At an annual basis, the economic vacancy has decreased by 1.7 percentage points in the Zealand Region. 4

5 The Danish Property Federation Market Statistics vacancy, Geographical overview Copenhagen CBD Lynettehavnen Margretheholm Kongebrovej Christiansborg Christianshavn Tivoli Northern Jutland Region Aalborg Mid Jutland Region Aarhus Northern Seeland Capital Region Triangle area Southern Denmark Region Odense Seeland Region Western and Southern Seeland Other Copenhagen & area Copenhagen CBD Eastern Seeland Anm.: Copenhagen CBD covers the zipcodes: 900, , og CBD stands for Central Business District. 5

6 The Danish Property Federation Market Statistics vacancy, Table 2. Office Capital Region Copenhagen CBD Other Copenhagen and area Northern Zealand Zealand Region Eastern Zealand Western and Southern Zealand Southern Denmark Region Odense Triangle Area Mid Jutland Region Aarhus Other Mid Jutland Northern Jutland Region Total Table 3. Retail Capital Region Copenhagen CBD Other Copenhagen and area Northern Zealand Zealand Region Eastern Zealand Western and Southern Zealand Southern Denmark Region Triangle Area Mid Jutland Region Aarhus Other Mid Jutland Northern Jutland Region Total

7 The Danish Property Federation Market Statistics vacancy, Table 4. Industry Capital Region Copenhagen CBD Other Copenhagen and area Northern Zealand Zealand Region Southern Denmark Region Mid Jutland Region Aarhus Total Table 5. Residential Capital Region Copenhagen CBD Other Copenhagen and area Northern Zealand Zealand Region Eastern Zealand Western and Southern Zealand Southern Denmark Region Odense Triangle Area Other Southern Denmark Mid Jutland Region Aarhus Other Mid Jutland Northern Jutland Region Aalborg Other Northern Jutland Total

8 The Danish Property Federation Market Statistics vacancy, About the Market Statistics The portfolios have approx rentals corresponding to an annual rental value of 17.8 billion DKK and million m2. To compare, the statistical base in January 2016 had a rental value of 15.5 billion DKK and 13.5 m properties are included in the Market Statistics. The base of the economic vacancy is the actual rent. The economic vacancy is defined as: The sum of actual rent in all vacant rentals divided by the sum of actual rent in bot occupied and vacant rentals. The Market Statistics is based on quarterly processed property data for rentals and vacancies within the period in question. This web report has been closed per 31 December 2016 and is called. is from (closed per 31 December 2016) compared to October 2016 (closed per 30 September 2016). is from (closed per 31 December 2016) compared to January 2016 (closed per 31 December 2015). Published data are updated and valid on the date of publication. As the Market Statistic are updated ongoing, historic data might also be updated. We have chosen not to publish data, where the data is not sufficient to give valid and representative results or combinations if only one or very few portfolios are represented. This report is based on data from Ejendomme, Aberdeen Asset Management, Akelius, Alm. Brand, Andersen Partners Ejendomsadministration, AP Pension, Arkitekternes Pensionskasse, ATP, Bevica Fonden, Blue Vision, Carlsbergfondet, CBRE, CEJ Ejendomsadministration, Coller Capital, CS Pensionsfond, CW Obel Ejendomme, DADES, Danica, Dansk Sygeplejeråd, Danske Bank, DATEA, DEAS, DEAS Invest 1, DIP, DNP Ejendomme, DSB Ejendomme, Ejendomsselskaberne Grønløkkevej 10, Fast Ejendom Danmark, Fokus Asset Management, FrederiksbergFonden, Færchfonden, Grosserer Schiellerup og Hustrus Fonde, Gudbjørg og Ejnar Honorés Fond, HD Ejendomme, Højgaard Ejendomme, Industriens Pension, Jammerbugt Kommune, Jeudan, Jorcks Ejendomsselskab, JØP, Kalkværksgrundene, Kalvebod Ejendomme, KIRKBI, KLP Ejendomme, Kramers Legat, LB Forsikring, Lægernes Pensionskasse, Lærernes Pension, MP Pension, Niam, Nordea Ejendomme, Nordea Liv og Pension, North Property Asset Management, Patrizia Denmark, PBU, PenSam, PensionDanmark, Pensionskassen for Farmakonomer, PFA, Pitzner Ejendomme, PKA, ProDomus, Realdania, Sampension, SEB, SPG Omsorg DK1, Steen & Strøm, Taurus Ejendomsadministration, TDC Pensionskasse, Topdanmark, Tryg, Valad and Aage Larsens Boligudlejning. Further information For further information regarding this web report please contact Chief Economist in the Danish Property Federation Morten Marott Larsen mml@ejendomsforeningen.dk Phone