JLL and EDC Erhverv Poul Erik Bech in Nordic Outlook: Nordics still a safe haven for property investments and performing better than other markets

One of the world’s largest estate agencies, Jones Lang LaSalle (JLL), which generated revenue in excess of DKK 123 billion in 2019 and which has 92,000 employees in more than 80 countries, has just published the report ‘JLL Nordic Outlook – Spring 2021’, which focuses on the residential rental property market in the Nordics. EDC Erhverv Poul Erik Bech is JLL’s partner in Denmark, and has supplied the content on the Danish market with comments on all property segments. Joseph Alberti, Head of Research at EDC Erhverv Poul Erik Bech, says:

“In spite of the coronavirus pandemic, transaction volume in Denmark and the rest of the Nordic region almost reached record levels – in fact the third-highest level ever – driven by the large number of transactions within logistics and residential rental property. In 2020, transaction volume in the Nordic region was just short of EUR 44 billion, which is down only 2.3% on 2019. Transaction volume in Denmark was EUR 9.6 billion, which is actually an increase of as much as 18.9% compared to 2019, so the Danish market, together with Norway, has grown, while Sweden has fallen by 12.1% and Finland by rather less. Overall, transaction volume in the Nordic region has remained reasonably stable over the past five years. In 2020, the transaction volume in Denmark accounted for 21.9% of the Nordic market, while in 2019 it was 18%, but there is some way up to 2017, a record year in which Denmark accounted for 26.9% of volume in the Nordic region.”

Joseph Alberti at EDC Erhverv Poul Erik Bech continues: “Looking at transaction volume worldwide, according to Real Capital Analytics, in 2020 it was at its lowest level in seven years with a decrease of as much as 29% overall, and a fall of 27% in Europe, so Denmark and the Nordic region continue to be very much a safe haven and an attractive place for real estate investments. As regards, 2021, the roll-out of vaccinations is likely to create good conditions for a strong economic recovery in the second half of 2021. Combined with low interest rates, a strong capital market and good access to finance, we expect this to generate significant interest in real estate investments both here in Denmark and in the Nordic region during 2021,” says Joseph Alberti.

Residential rental properties account for record volumes

In ‘JLL Nordic Outlook’, a whole chapter is dedicated to residential rental property, a segment which was attracting considerable interest even before the onset of the coronavirus pandemic. Joseph Alberti, EDC Erhverv Poul Erik Bech, says:

“Residential rental properties account for record volumes, especially on the Danish market, where they account for 63% of all transactions. This is the highest figure in the Nordics – in Sweden they account for 37% of the market. By comparison, residential rental properties in Denmark accounted for 40% in 2019. It shows that investors have to an even greater extent been looking for safer investments, as people still need a roof over their heads – and where the risk is lower than in other segments affected by corona, such as the retail sector and offices, which are also surrounded by some uncertainty, although less so.”

Growing numbers of foreign investors

Due to a large increase in the number of international clients, EDC Poul Erik Bech set up an independent department just under two years ago that exclusively services international investors and businesses, and which works closely with JLL on a large number of cases. Helle Nielsen Ziersen, partner and Head of International Relations at EDC Erhverv Poul Erik Bech, says:

“We’re involved in an increasing number of transactions and consultancy tasks in Denmark and abroad together with JLL. Our first year in 2019 surpassed all expectations, and 2020 was even better. We had prepared an ambitious budget for the year, so we’re satisfied with a result that is better than budgeted, despite the coronavirus pandemic. Denmark saw a positive development in investments compared to the previous year, which is largely due to the fact that we’re still seen as a safe haven for many foreign investors. We’re thus experiencing a high level of activity, and our clients have become aware that we have a dedicated department that exclusively services international investors and companies. We will also be increasing the number of employees in our International Department in 2021.”

Read the full report : ‘JLL Nordic Outlook Spring 2021’ Focus: Living in a Nordic perspective.