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Greater Copenhagen offers superb conditions for commercial real estate investors – high yields, low transaction costs and large new urban development areas.
High yield on commercial real estate investments
The yield on commercial real estate investments in Copenhagen is higher than in most other European countries. The yield on the best-located retail properties in Copenhagen is around 1 percentage point higher than in Paris and Munich and up to 2 percentage points higher than in London.
Low transaction costs
Transaction costs on commercial real estate investment in Denmark are very competitive. In Copenhagen, the costs amount to 1-2% of the cash price in comparison to 5-6% of the cash price in many other major cities in Europe.
Office space unit costs per square metre
fDi Benchmark Financial Times 2015
A stable economy
Denmark is rated AAA by all major agencies including Standard & Poor’s, Moody’s and Fitch as the Danish economy has performed well before, during and after the global financial crisis. Denmark’s national debt is low, and the development of the Danish economy is significantly less volatile over time than most other European economies.
Unique mortgage system
Denmark is the European country with the lowest borrowing costs for the first 60% of the property value, owing to the country’s unique mortgage system. The current annual interest payment is 0.8-1.5% in comparison to 1.5-2.5% in many other countries in Europe.
Many new urban development areas
Greater Copenhagen offers several new large urban development areas, many of them near the city centre. The areas include former commercial harbours and industrial areas which are being transformed into attractive residential areas with schools, day care institutions, and sports and leisure facilities as well as modern office buildings. Many of the urban development areas will be climate-friendly city districts.