Investors are actively searching the market for investment opportunities despite low yield levels. At the same time, companies are facing an acute shortage of warehouse space, which has caused rent levels to increase further. The market for warehouse and logistics properties is currently changing due to the soaring e-commerce and that tenants have specific requirements for suitable facilities.  

Activity in the Danish warehouse and logistics market remains high. Nationwide, the vacancy rate is estimated to be 1.4 % in 2022Q1, which is a drop of 1 percentage point compared to the same time last year. In the Capital Region of Denmark, the vacancy rate is a mere 1.89 %, which is the lowest level since the end of 2008. The modest supply may put upward pressure on rent prices. The rent levels depend on the specific location, and in areas in or around Roskilde and the Greater Copenhagen area, the gross rent for prime location properties is currently in the level 675-725 DKK/sqm/year. The rent level in the Aarhus area is slightly lower with gross rents around 575-600 DKK/sqm/year, while gross rent levels in Odense, Aalborg and the Triangle Region are 500-525 DKK/sqm/year.

Investment demand for warehouse and logistics properties is currently high. The interest comes from Danish as well as international investors. For several years, foreign investors have shown great investment interest in Danish logistics properties, including especially larger warehouse and logistics facilities in the major cities and close to traffic hubs. However, over the past year, we have also registered several foreign investors buying smaller logistics properties outside the country's largest cities. This indicates that foreign investors consider Denmark to be an extremely attractive country for logistics investments, and that demand has now reached an intensity level where even foreign investors have broadened their search to also include smaller logistics properties on secondary locations.

In 2022Q1, the yield level for prime logistics properties is around 4-4.5 % in the Greater Copenhagen area. In Roskilde and the Triangle Region, the yield levels are around 5.00-5.50 % for prime properties. Outside the prominent logistics hubs Odense, Aarhus, and Aalborg, the typical prime yield levels are around 5.25-6.0%.

Three strong trends in the warehouse and logistics market 

As a result of increased online shopping and an extremely limited supply of warehouse and logistics properties, vacancy rates and yield levels have been pushed down. Meanwhile, rent levels and demand have been pushed upwards. These developments have triggered and continue to trigger new trends in the warehouse and logistics segment:

1. Speculative construction 
   As a result of the low supply and high demand for warehouse facilities, we now see a trend towards more speculative construction. Many companies have an enormous need for storage space, but not all warehouse properties can accommodate the need of the modern businesses. As e-commerce continues to increase, so do the demands and needs of the businesses. Modern businesses demand modern warehouse facilities to ensure efficiency and future growth. The substantial shortage of modern warehouse facilities can create favourable conditions for speculative construction.
2. Last mile logistics 
   A new type of structure and process in the logistics market is gaining momentum. The soaring e-commerce has intensified competition concerning delivery time. For companies to deliver products to customers as quickly as possible and within the agreed timeframe, it is a prerequisite that the warehouse and the location can provide the right resources. This includes both an ideal location close to major cities and the necessary technology to facilitate fast and automated processes that optimise delivery time. Many companies are showing great interest in last mile facilities that provide good and modern conditions. We also see an increasing number of investors show interest in warehouse properties for last mile distribution.
3. Parcel delivery in parking garages 
   In major cities across the country, several parking garages have partnered with selected delivery services, such as Nærbox and Instabox, and installed parcel lockers in the parking garages, where the customers can pick up their parcels. This is particularly beneficial for customers and businesses that use the parking facilities anyway, and they save the extra trip to a different pick-up point. At the same time, it allows for utilisation of square metres in the parking garage, that are not used for parking, such as areas by the entrance, stairwells, lifts etc. Many parking garages are located centrally in the cities or close to larger office buildings that use the parking garages for their employees and customers. With the enormous need for storage capacity created by the Covid-19 pandemic and the soaring e-commerce, we consider it a highly flexible solution that meets the needs and demands of the modern consumer.