The growth in the Danish economy continues and we find ourselves at the beginning of a new upswing, which has resulted in a positive growth seven quarters in a row – Q2 2015 being no exception. It is partly detectable in employment rates which are increasing, and the housing market stabilising with generally increasing prices. Compared with the situation in the investment market before the financial crisis, there are now significantly more international investors present in Denmark.

International investors are attracted by a combination of Denmark's status as a safe haven, the attractive market prospects, as well as the current low mortgage interest rates.

The transaction volume for investment properties in Denmark 2014 was above €4.4bn. In 2014, the Copenhagen Region accounted for approximately 63% of the total investments in Denmark, which also reflects the development in the first half of 2015. Q2 2015 kicked off by a major single transaction of the department store Illum, inner city Copenhagen. This large single deal, combined with a transaction level above last year's volume, totals Q2 2015 into the (estimated) highest transaction volume in Denmark since 2008 for a single quarter.

^{Source: Nybolig}

Q2 2015 continued an increasing trend in the transaction volume of prime office. This is partly due to the fact that there has been an increase in the supply of attractive investment properties. Previously, there was a significant mismatch due to limited supply and high demand. The vacancy rate for offices in Copenhagen has dropped in Q2 2015, a trend that has continued the past 18 months.

We expect this development to spread to large parts of Denmark over the next 6-18 months as the economic recovery becomes geographically more dispersed and, expectedly, additional jobs are created regionally. A current trend in the market is to purchase older centrally located office properties for conversion into residential apartments. This new development is due to a large degree of urbanisation, and the fact that office users have a preference for newer facilities than from their lay-out which are easier to optimise.

Source: Nybolig

For the remainder of 2015, we expect to see further positive developments in the investment volume within most property segments, and that both Danish and foreign investors will be highly active in the market. The foreign investors have so far focused their investments narrowly in and around Copenhagen, but there are signs that there will be a greater geographical spread over the next year. Prime yields are stable but we may see some small decreases for office and retail.