Low interest rates, low vacancy rates and an ever-improving infrastructure in the Greater Copenhagen area are the main reasons.

Danish and especially foreign investors are increasingly looking for value-add properties when investing in the Copenhagen office occupier market. This is the general trend in the cases we have been involved in recently, explains Anders Bengtsson, Partner.

Historically low vacancy persists
The increased focus on value-add properties is partly due to the historically low vacancy in the Copenhagen office letting market. Disregarding structural vacancy there is virtually no vacant office space available, which increases landlords' opportunities to close advantageous lease agreements.

The favourable office property market is increasingly attracting foreign investors, who still consider Copenhagen to offer a politically stable and economically attractive investment market.

"With the entry of foreign investors, we have seen an increasing professionalisation. The time when a private individual invested some of his wealth in real estate is coming to an end. This is also linked to the banks' more restrictive financing requirements, where you need far more equity when investing in real estate than was the case just a few years ago. Today, about half of all real estate investments in Denmark are made by foreign investors," says Anders Bengtsson.

Investments are moving out of the city
Investors are not only interested in value-add properties in central Copenhagen. Value-add properties on the outskirts of Copenhagen are also interesting investment cases. Especially if the infrastructure is well-developed and public transportation to the city centre is good.

"We recently acted as sell-side advisor on a case where an office property with a high vacancy rate had been vacant for several years. But now a foreign investor has bought the property and is moving in with a customised concept that increases the value of the property," says Anders Bengtsson and explains that with the prospect of continued low interest rates and high employment, we expect that interest in office properties will remain high throughout 2020.