COPENHAGEN 2018 A safe investment harbour for property investment in the Nordic region - Greater Copenhagen Investments

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COPENHAGEN 2018 A safe investment harbour for property investment in the Nordic region - Greater Copenhagen Investments
COPENHAGEN
2018
A safe investment harbour for property
investment in the Nordic region
COPENHAGEN 2018 A safe investment harbour for property investment in the Nordic region - Greater Copenhagen Investments
HELSINGBORG

                             HELSINGØR

                                                                             SWEDEN

                  HILLERØD

                                                                    LANDSKRONA

                                                     Øresund
                                                                              SKÅNE

              DENMARK                  COPENHAGEN
                                                   Nordhavn

                       Carlsberg
                       City District                           The Øresund
                                                               Fixed Link

ROSKILDE                                 Ørestad
                                                                                 MALMÖ
                                             Copenhagen
                                             International
                                             Airport

           8 KM
COPENHAGEN 2018 A safe investment harbour for property investment in the Nordic region - Greater Copenhagen Investments
CONTENTS
We welcome you to Copenhagen                           5

Six reasons to establish your business in Copenhagen   6

Why invest in Copenhagen?                              8

Copenhagen by facts                                    10

Copenhagen by graphs                                   12

The transaction volume in 2017                         14

The Danish mortgage system                             16

Structured finance                                     18

Buying real estate                                     22

Exit options of Danish real estate                     24

Development areas in Copenhagen                        26

Next step                                              34

Walkway and apartments. Photo: Gettyimages                  3
COPENHAGEN 2018 A safe investment harbour for property investment in the Nordic region - Greater Copenhagen Investments
4   The Bicycle Snake. Photo: Nicolai Perjesi
COPENHAGEN 2018 A safe investment harbour for property investment in the Nordic region - Greater Copenhagen Investments
WE WELCOME YOU TO COPENHAGEN

There are many reasons why to invest in Copenhagen. Here you will find
some of the best property investment opportunities – high yields, low
transaction costs and major urban development areas. Furthermore,
together with a very business-friendly climate Copenhagen is home to
strong networks that get you connected from day one.

In 2018 The Financial Times named the Greater Copenhagen area the
European leader in attracting investors and companies among mid-sized
regions. Spanning Eastern Denmark and Skåne in Southern Sweden,
Greater Copenhagen has public construction projects worth more than
EUR 30bn and property development opportunities in more than 30
urban development areas.

Therefore, we highly recommend you to join Copenhagen, and when you
do we are ready to help you further explore the opportunities for your
investments and show you why Copenhagen is a great place to invest.

Tony Christrup
Chairman of The National Association for Building and Real Estate

                                                                         5
COPENHAGEN 2018 A safe investment harbour for property investment in the Nordic region - Greater Copenhagen Investments
SIX REASONS TO ESTABLISH
    YOUR BUSINESS IN COPENHAGEN

     HIGH YIELD on investments               EXTREMELY low transaction
                                             costs

     A SAFE INVESTMENT HARBOUR
                                             UNIQUE MORTGAGE system

     Greater Copenhagen is THE METRO­
     POLIS OF THE NORDIC REGION with         Vast new urban DEVELOPMENT
     approximately 4.0 million inhabitants   AREAS

6
COPENHAGEN 2018 A safe investment harbour for property investment in the Nordic region - Greater Copenhagen Investments
SOME OF THE MOST ACTIVE FOREIGN INVESTORS
 ON THE DANISH REAL ESTATE MARKET

 In the past years the Danish commercial real estate
 market has become more attractive to foreign
 investors. Below an overview of some of the foreign
 investors that have been active on the Danish market
 in recent years.

 Figure 1: Foreign investor volume 2012-2017
 Source: Cushman & Wakefield I RED

                     Heimstaden (Sweden)
Investor

                            Niam (Sweden)
                        Patrizia (Germany)
                           NREP (Sweden)
  Standard Life Aberdeen (United Kingdom)
                       AB Balder (Sweden)
                   Wihlborgs A/S (Sweden)
                       Castellum (Sweden)
                            ECE (Germany)
                         CapMan (Finland)
                   Central Group (Thailand)
                   Pears (United Kingdom)
                         Blackstone (USA)
            Coller Capital (United Kingdom)
              CBRE Global Investors (USA)
           Europa Capital (United Kingdom)
                         SG Nordic (Israel)
  Akelius Residential Property AB (Sweden)
                   Cordea Savills (Canada)
                   Wenaasgruppen (Norge)
                                                                          DKK Bn
                                              0   3     6   9   12   15

 Copenhagen Lakes. Photo: Jacques Holst                                            7
COPENHAGEN 2018 A safe investment harbour for property investment in the Nordic region - Greater Copenhagen Investments
WHY INVEST IN COPENHAGEN?
    In 2017 foreign investors’ property                 is pegged to the Euro. As a result, Denmark
    investment in Copenhagen reached                    gets an AAA rating by Standard & Poor’s.
    approximately EUR 2,500m.
                                                        The metropolis of the Nordic region
    This is partly due to the fact that
                                                        Copenhagen has the advantage of a unique,
    Copenhagen is considered a safe                     strategic geographical location, linking conti-
    haven for investors.                                nental Europe to the rest of the Nordic region.
                                                        With its premier location, Copenhagen to-
    High yield on investments                           gether with the Malmö region creates Greater
    Yields on investments in Denmark and                Copenhagen, a metropolis for the region of
    Copenhagen are high compared to other               approximately 4.0 million residents.
    European countries. An example of favoura-
    ble investment conditions is the yield on the       Moreover, the region is serviced by Copenha-
    best located retail properties in Copenhagen.       gen Airport – the main airport and gateway to
    Yields in Copenhagen are higher than in Paris       the Nordic region. Today, the airport handles
    and significantly higher than the best located      more than 29 million passengers per year. This
    retail properties in London, which combined         number is expected to reach nearly 40 million
    with the Danish mortgage system, often              passengers per year, as the airport will be
    results in a substantially higher return on         expanding over the next couple of years.
    invested capital.
                                                        Low transaction costs
    A safe investment harbour                           The transaction costs in Denmark are actually
    - Low national debt                                 lower than in most other European countries.
    It is fair to say that the concept safe haven       Costs in the amount of 5-6% of the cash price
    seems to fit Denmark when looking at the            are not unusual in other European countries,
    national debt. The Danish economy has per-          while the level of costs in Denmark is around
    formed well before, during and after the finan-     1-2%.
    cial crisis. National debt is low, and the Danish
    economy is one of Europe’s most robust with         Unique mortgage system
    tight fiscal control, a current account surplus     Denmark is the country in Europe with the
    low inflation. Also, the Danish currency (DKK)      lowest lending costs for the first 60% of

8
COPENHAGEN 2018 A safe investment harbour for property investment in the Nordic region - Greater Copenhagen Investments
the property value. This is due to the unique    New urban development areas
mortgage system where the bank’s typical         Copenhagen offers vast, new urban
annual margins are in the region of 0.6-1.25%.   development possibilities near the centre
In other European countries, instalments of      of the city.
the same size typically accrue 1.0-2.5% as the
bank’s annual margins.                           Copenhagen’s commercial real estate
                                                 brokers always have commercial real
Low transaction costs as well as low lending     estate properties and development pro-
costs are both positive factors that boost the   jects to offer, and are all able to provide
effective yields significantly on commercial     relevant key figures regarding the market
real estate in Denmark.                          as a service for international investors.

                                                 YIELDS FOR PRIME RETAIL
                                                 Q4 2017

                                                 City 			Yield
                                                 Amsterdam  3.00%
                                                 Copenhagen 3.00%
                                                 London     2.50%
                                                 Madrid     3.30%
                                                 Munich     3.00%
                                                 Paris      2.50%
                                                 Rome       2.75%
                                                 Stockholm  3.25%

                                                 Source: Cushman & Wakefield I RED

Apartments in Ørestad. Photo: Ty Stange                                                        9
COPENHAGEN 2018 A safe investment harbour for property investment in the Nordic region - Greater Copenhagen Investments
COPENHAGEN BY FACTS

      A GLOBAL ‘TOP TEN-CITY’ FOR          PUBLIC INVESTMENTS
      LIVEABILITY                          A number of vast public investments
      – Mercer 2016 and Monocle 2017       in Greater Copenhagen are underway
                                           in the next ten years, for instance
                                           •	The Copenhagen-Germany fixed
                                              link at Femern (EUR 7.5 billion)
      COPENHAGEN will become the first     •	Copenhagen Airport expansion
      CARBON-NEUTRAL CAPITAL BY               (EUR 1.5 billion)
      2025                                 •	Light rail around Copenhagen
                                              (EUR 0.5 billion)
                                           •	A Copenhagen Metro City Ring Line
                                              (EUR 2.9 billion)
      LOW CORPORATE TAX                    •	ESS MAX IV the world’s most
      A corporate tax rate of 22% places      powerful neutron source for R&D
      Denmark below OECD and European         (EUR 2.0 billion).
      level

10
COPENHAGEN AIRPORT                                       43% INCREASE IN POPULATION
    Northern Europe’s largest international                  in Copenhagen from 2006 to
    airport. Approximately 29.2 million                      2030
    passengers in total travelled through
    the airport in 2017

                                                             EUROPE’S BEST AND THE WORLD’S
                                                             THIRD BEST COUNTRY FOR DOING
    DENMARK CREDIT RATING                                    BUSINESS
    AAA – S&P 2017                                           – The World Bank 2017

    The group of CITIZENS IN THE AGE                         COPENHAGEN IS EUROPE’S 2nd MOST
    OF 30-64 is expected to GROW WITH                        DESIRABLE CITY for property invest-
    APPROXIMATELY 56.000 people from                         ment and development in Europe PwC
    2018 to 2030                                             – ULI 2018

Copenhagen from above. Photo: Jacob Schjørring & Simon Lau                                         11
COPENHAGEN BY GRAPHS
     Young families choose Copenhagen                                               hagen will have increased by approximately
     More and more families with children are                                       20% in 2027, which is the same level as other
     choosing to move to or stay in Copenhagen.                                     Nordic capitals. This illustrates that the
     Consequently, the number of children and                                       Nordic region is experiencing strong popu-
     young people, as well as residents between                                     lation growth in the major city regions these
     the ages of 30 and 64, will increase faster                                    years. To accommodate this growth, a large
     than the city’s population as a whole. See                                     number of residences will have to be built.
     Figure 2.
                                                                                    Since the beginning of 2006, net growth in
     Many of the new Copenhageners will live                                        the number of residential properties in Copen-
     in new housing. Demographic trends also                                        hagen has risen by 20,500. In the same period,
     indicate that existing residential areas will be                               the city’s population has grown more than five
     more densely populated, with more children                                     times the additional housing. Only one in every
     and young people in the city.                                                  five housing units in Copenhagen is owner-
                                                                                    occupied as illustrated in Figure 3. If we are
     Population growth demands new housing                                          to prevent prices from accelerating rapidly
     As Figure 4 shows, the population of Copen-                                    due to the extensive migration to Copenhagen,
     hagen will continue to increase in the years to                                one measure will be to build many more
     come. The population of the City of Copen-                                     residential properties.

     Figure 2: Population growth 2015-2030                                          Figure 3: Breakdown of the number
     Source: City of Copenhagen                                                     of residential properties
                                                                                    Source: City of Copenhagen

      85+

     65-84

     30-64
                                                                                                                Owner occupied 18%
     20-29
                                                                                                                Private rented 29%
      0-19
                                                                                                                Social housing 20%
                                                                                                                Cooperative housing 33%
                 0
         -5000

                     5000

                            10000

                                    15000

                                            20000

                                                    25000

                                                            30000

                                                                    35000

                                                                            40000

12
Rooftop café at Illum. Photo: Robin Skjoldborg

Figure 4: The outlook for population growth
Source: City of Copenhagen

        160
Index

                             Copenhagen
                             Stockholm
        150
                             Oslo
                             Hamburg
        140

        130

        120

        110

        100

         90
              2000
                     2001
                            2002
                                   2003
                                          2004
                                                 2005
                                                        2006
                                                               2007
                                                                      2008
                                                                             2009
                                                                                    2010
                                                                                           2011
                                                                                                  2012
                                                                                                         2013
                                                                                                                2014
                                                                                                                       2015
                                                                                                                              2016
                                                                                                                                     2017
                                                                                                                                            2018
                                                                                                                                                   2019
                                                                                                                                                          2020
                                                                                                                                                                 2021
                                                                                                                                                                        2022
                                                                                                                                                                               2023
                                                                                                                                                                                      2024
                                                                                                                                                                                             2025
                                                                                                                                                                                                    2026
                                                                                                                                                                                                           2027

                                                                                                                                                                                                                  13
THE TRANSACTION VOLUME IN 2017
     Once again, it was an impressive                   61% after 2016, where the volume was shared
     year for the Danish commercial real                equally between Danish and foreign investors.
     estate market reaching a new record                Investors interested in the office segment
                                                        are also seeking towards other areas than the
     of EUR 12.3 bn., surpassing last
                                                        Copenhagen Area. 36% of the office trans-
     year’s transaction volume by approx.               action volume came from properties located
     EUR 3.2 bn. For the first time, for-               outside of the Copenhagen Area, while these
     eign investors have dominated with                 figures were only 14% and 16% 2016 and
     a 53% share of the total investment                2015.
     volume reaching EUR 6.6 bn. The
                                                        Retail
     interest has especially been great                 The retail investment volume has more than
     from the Nordic countries.                         doubled from 2016 to 2017. The volume was
                                                        especially driven by the large share of shopping
     Residential                                        centre transactions which constituted 57%
     Danish investors have dominated the resi-          of the volume. The total retail volume in 2017
     dential segment the last couple of years, but      reached EUR 2.2 bn. The retail segment has
     foreign investors now contribute with 61% of       always been dominated by foreign investors,
     the total residential volume. The residential      except for 2017 where the Danish investor
     volume reached a total of EUR 5 bn. in 2017.       share was 55% contrary to 41% in 2016.
     Investors continue to point their attention
     towards the Copenhagen Area, but there has
     been a shift in the geographical distribution      Figure 5: Transaction volume in 2016 in Denmark
     as Jutland experienced an increase from            Source: Cushman & Wakefield I RED
     EUR 0.5 bn. in 2016 to EUR 1.5 bn. in 2017.
                                                                 40.000
     However, the investment volume in Copen-
                                                      Mio. EUR

                                                                                                 Residential
                                                                 35.000
     hagen is steady with a minor decrease in the                                                Office
                                                                 30.000
     residential volume of 4%.                                                                   Retail
                                                                 25.000                          Industrial
                                                                 20.000                          Hospitality
     Office
                                                                 15.000                          Land
     The office segment reached a total volume of                10.000                          Other
     EUR 2.6 bn. in 2017. Danish investors are once               5.000
     again dominating the transaction volume with                    0

14
Figure 6: Breakdown of investors for                      Figure 7: Office properties distributed
office properties in Denmark                              on Danish and foreign investors in Denmark
Source: Cushman & Wakefield I RED                         Source: Cushman & Wakefield I RED

                             Institutional Investor 25%
                             Private Investor 25%
                             Property fund 22%
                             Real estate company 16%                                    Danish Investor 61%
                             Other 12%                                                  Foreign Investor 39%

Figure 8: Breakdown of investors                          Figure 9: Residential properties distributed
for residential properties in Denmark                     on Danish and foreign investors in Denmark
Source: Cushman & Wakefield I RED                         Source: Cushman & Wakefield I RED

                             Institutional Investor 38%
                             Private investor 38%
                             Property fund 20%
                             Real estate company 3%                                     Danish Investor 38%
                             Other 1%                                                   Foreign Investor 62%

Figure 10: Breakdown of investors for                     Figure 11: Retail properties distributed
retail properties in Denmark                              on Danish and foreign investors in Denmark
Source: Cushman & Wakefield I RED                         Source: Cushman & Wakefield I RED

                             Institutional investor 46%
                             Private investor 40%
                             Property fund 8%
                             Real estate company 3%                                     Danish Investor 55%
                             Other 3%                                                   Foreign Investor 45%

                                                                                                               15
THE DANISH MORTGAGE SYSTEM
     The acquisition of real estate in                  The Danish mortgage bond market
     Denmark is typically financed by                   The bond market has a volume of approxi-
     Danish mortgage banks.                             mately EUR 390bn and is now the largest
                                                        covered bond market in Europe. Bond
                                                        investors are primarily financial institutions,
     One of the World’s best mortgage finance           pension funds and investment funds. The high
     systems                                            liquidity and the attractiveness of the bonds
     The Danish mortgage model is unique, as            due to their high security level ensure
     there is a direct match between the loan an        borrowers very low and competitive prices.
     investor raises with a mortgage bank and
     the bonds a mortgage bank issues to fund           The interest rate
     a loan. It contributes to securing financial       The interest rate of a mortgage loan and the
     stability because the match funding principle      prepayment price are directly reflected in the
     largely eliminates risk in the financial sector.   price of the mortgage bonds funding the loan.
     This connection also forms the basis of a          Everyone can monitor bond prices daily, and
     transparent and flexible prepayment system.        interest rates mirror the prices investors pay
     Borrowers may prepay their mortgage loans          for the bonds. Danish mortgage banks provide
     at any time without negotiating the price          mortgage lending at a very competitive
     – pre-payment may always take place at             price. This has led to a persistent demand for
     current market prices. This unique principle       mortgage loans from owners of real property
     is found nowhere else in the world.                in Denmark, and makes the Danish mortgage
                                                        market the largest in the world relative to
     Credit facilities                                  its GDP. According to the European Mortgage
     The credit facilities of mortgage banks are        Federation, the Danish mortgage system
     governed by statute. The most important            offers one of the lowest interest rates to
     lending limits are as follows:                     borrowers across Europe – see Figure 12.
     •	up to 60% of the market value of
        commercial properties, and                      When being a foreign investor
     •	up to 80% of the market value of                It is important to emphasise that Denmark
        residential properties                          maintains a fixed exchange-rate policy
                                                        vis-àvis the euro area. This means that the

16
Figure 12: Variable rate and initial fixed period rate up to 1 year
          Source: Realkredit Danmark

                                                      5
% Variable rate and initial fixed rate up to 1 year

                                                                                                                                                                                                                                                                         Denmark
                                                                                                                                                                                                                                                                         Sweden
                                                                                                                                                                                                                                                                         Germany
                                                                                                                                                                                                                                                                         Netherlands
                                                      4

                                                      3

                                                      2

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                                                                   2011q1
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           aim of monetary and foreign rate exchange                                                                                                                           • Long credit facilities – up to 30 years.
           policy is to keep the DKK stable vis-à-vis the                                                                                                                      •	Transparency in prices and repayment
           euro. The main objective of the monetary                                                                                                                               terms for the loans.
           policy in the euro area is to maintain price                                                                                                                        •	No prepayment penalty. The loan can be
           stability, i.e. to avoid inflation.                                                                                                                                    prepaid by buying the underlying bonds at
                                                                                                                                                                                  market price.
           Key benefits of the mortgage system                                                                                                                                 •	Flexibility. Mortgage banks offer fixed-
           The strongest benefits of the Danish mort-                                                                                                                             rate loans, adjustable-rate mortgages and
           gage system are: Low competitive market-­                                                                                                                              floating-rate loans.
           based pricing of loans against mortgages on
           real property.

                                                                                                                                                                                                                                                                                                    17
STRUCTURED FINANCE
     The increasing market for structured             Advantages
     finance offers investors flexibility             The advantages that foreign investors often
     and financing terms that are tailor-­            seek with structured finance in Denmark are
                                                      higher leverage, no or low amortization
     made to fit the business plan.
                                                      and/or payment-in kind. The latter is relevant
                                                      for development or conversion projects where
     As an alternative to the local mortgage          cash flows are limited or absent in typically
     financing, the Nordic Corporate Bond Market      1-3 years.
     offers tailor-made financing solutions.
     Structured finance in Denmark is relevant        Process
     across all segments and to investors with        The Nordic Corporate Bond Market is well
     strategies ranging from opportunistic to core.   developed, and a complete issue process

18
can typically be completed within 6 weeks.                         tors to achieve the optimal structure that will
Already after 4 weeks most processes will                          attract investors and secure the best terms
be closed and thus the final terms are deter-                      available in the market. Depending on the
mined. Afterwards settlement and disburse-                         actual case, the issued bonds may be listed
ment of funds will take around 2 weeks.                            on NasDaq First North.
The process will be handled professionally
with cooperation and involvement of the local                      Nordic Trustee is typically involved as an
legal advisors.                                                    experienced representative of the bond­
                                                                   holders which also simplifies communication
Structuring                                                        for the issuer.
With expertise from previous bond issues
local investment banks can help foreign inves-

The Tietgen Student Residence in Ørestad. Photo: Nicolai Perjesi                                                     19
20
Cirkelbroen. Photo: Kim Wyon   21
VM Bjerget. Photo: Michael Colville-Andersen

     BUYING REAL ESTATE
     Buying real estate in Denmark                      When the title document is registered, the
     involves considerations regarding                  buyer’s title will then be protected against the
     financing, planning and environmen-                seller’s bona fide assignees and creditors.

     tal matters, leases, tax, registration
                                                        Registration of land
     fees, etc.                                         Almost all properties are registered elec-
                                                        tronically in the land register under individual
     Acquisition rules                                  numbers. Title is registered by electronic ap-
     The right to acquire real estate in Denmark        plication to the Danish Land Registry. As from
     is based on residence. All persons, who have       the filing of the application, title is protected
     or have had a permanent address in Denmark         against subordinated rights holders provided
     for a period of five years and companies that      that the registration is finalized.
     have their registered office in Denmark, are
     allowed to acquire real estate.                    Registration fees
                                                        The stamp duty on transfer of real estate
     Completion of real estate transactions             comprises a fixed amount of DKK 1,660, cor-
     Far the most Danish commercial real estate         responding to approximately EUR 220, and a
     transactions are completed in two stages:          variable amount of 0.6% of the purchase price
     •	The buyer and the seller draw up a contract     or the value according to the public land as-
        of sale, specifying the terms of their agree-   sessment, whichever is the higher. The stamp
        ment.                                           duty on registration of mortgages comprises a
     •	Title of the property is registered with the    fixed amount of DKK 1,660 and a variable part
        Danish Land Register.                           of 1.5% of the mortgaged amount.

22
Charges affecting property                          governed by the Danish Business Lease Act.
Two types of charges may affect property:           Since the majority of the provisions of the
•	Easements that give the holder a right to        Danish Business Lease Act are non-mandato-
   use or control the property for a limited        ry and may therefore be derogated from by
   specific purpose.                                agreement, the Danish Business Lease Act
•	Restrictive covenants that give the holder       provides a high level of contractual freedom.
   the right to require preservation of a
   certain condition on the land.                   Danish residential leases and residential
                                                    landlord/tenant law matters in general are
Due diligence                                       governed by the Danish Landlord and Tenant
The due diligence review is typically divided       Act and the Provisional Act on Housing Control.
into commercial, legal, technological, environ-     Most leases are entered into on standard lease
mental and financial due diligence reviews.         agreement formulas, and many provisions are
                                                    mandatory according to the Danish Landlord
Seller’s liability for defects                      and Tenant Act and the Provisional Act on
Generally, the seller is liable for defects         Housing Control. These acts include many
on the property or the legal affairs of the         mandatory provisions, including clauses which
property, including errors in leases or tenancy     define how the rent is fixed for different kinds.
agreements.
                                                    VAT
Planning and environmental matters                  In principle the sale and purchase of real estate
Acquiring real estate in Denmark implies            is not subject to Danish VAT (Danish VAT is
some environmental aspects primarily within         charged at a flat rate of 25%). However, an anti-­
physical planning and soil contamination. The       avoidance rule states that VAT will apply if a
Danish Planning Act is a key environmental act      building has been substantially rebuilt. The sale
as it regulates planning at national, regional      of building sites, the first sale of new buildings
and local levels. Heavily polluting activities or   complete with land, as well as the delivery of
facilities that might affect the environment        built-up sites will be subject to 25% VAT.
require plan regulations at regional level.
Danish environmental law is based on the            Lease of real estate is prima facie not subject
polluter pays principle.                            to VAT. However, the owner of the real estate
                                                    may opt to register the building for VAT pur-
Leases                                              poses, implying that the rent will be subject to
Danish business leases and commercial               VAT. The lessee, if a person subject to VAT, will
landlord/tenant law matters in general are          then be entitled to deduct the VAT.

                                                                                                        23
EXIT OPTIONS OF DANISH REAL ESTATE
     The same considerations when to                    The preferred transaction scheme will be to
     buy a property in Denmark will be                  either sell the asset by way of an asset sale or
     relevant to consider for a vendor                  a share deal.

     upon a sale of commercial real
                                                        It shall be noted that a sale of shares in a
     estate in Denmark.                                 Danish property company does not constitute
                                                        a sale of the property as such as e.g. in
     Selling real estate                                Germany.
     Sale of commercial real estate is usually
     handled through Danish real estate agents          According to the present Danish tax scheme
     by way of structured sales processes. The          capital gain on sale of shares in a daughter
     advice given will be based upon international      company of a Danish holding company may be
     standards and majority of real estate agents       considered tax exempt. However, the sale of
     and other advisors as lawyers and account-         such shares is legally wise more complicated
     ants are all able to assist fluently in English.   and may present a risk in respect of the his-
     The major international chains of real estate      tory of the property. As a sale of the property
     agents are all present in Denmark and are          may trigger capital gain and a subsequent
     ready to assist on a professional level.           a tax payment it should be considered if the
                                                        property is sold as an asset or the shares in
     Sales may be structured as an asset deals          the company holding the property is to be sold.
     by way of sale of shares or by way of issuing
     additional owners interest in the company          Also, it should be noted that a sale of shares
     holding the property. More complicated sales       may also be deemed exempt from stamp
     processes as synthetic sales, preferential         duties on the transactions as such.
     shares issuing or sales of portfolios by way of
     IPO’s has not yet found its way to the Danish
     market but otherwise all usual sales process-
     es found internationally can be handled by
     Danish commercial real estate agents.

24
The Bicycle Snake. Photo: Thomas Høyrup Christensen   25
DEVELOPMENT AREAS IN COPENHAGEN
     There are several designated development            Airport/the Øresund Bridge and the historic
     areas close to the centre of Copenhagen.            city of Copenhagen, Ørestad is a prime
     In this leaflet we choose to focus on three         location for international businesses;
     significant areas:
                                                       •	Carlsberg City District that used to house
     •	Ørestad is a modern district with a blend         the Carlsberg brewery, with historical
        of businesses, universities, cultural venues      buildings to be retained. With new housing,
        and housing. Situated between Copenhagen          schools and offices Carlsberg City District
                                                          will create a unique new neighbourhood;

26
•	Nordhavn, a former industrial and commer-       metres of new construction is developed for
   cial harbour, is being converted into attrac-   housing, offices and shops in the southern
   tive residential properties and offices with    part of Copenhagen Harbour, the eastern part
   distinctive architecture right at the harbour   of Amager close to Copenhagen Airport, and
   front.                                          areas southwest of the Capital.

Apart from these three examples, urban
development takes place in several areas
in Copenhagen. More than 500,000 square

Photo: Copenhagen Capacity                                                                        27
ØRESTAD
     History                                            Location
     The modern city district has been developed        Less than 10 minutes from Scandinavia’s
     on former military training grounds close to       largest airport, 10 minutes to the historic
     the city centre. Ørestad was the first devel-      city of Copenhagen, and half an hour from
     opment area in the region to benefit from the      Sweden. In Ørestad you are within easy reach
     Øresund Bridge to Sweden and the proximity         of everything. Its location at the intersection
     of Copenhagen Airport.                             of transport lines with six metro stations
                                                        (running 24/7), direct train service to the air-
     Ørestad is a driving force in the reinvention of   port and direct access to the highway makes
     Copenhagen – a reinvention that brings corpo-      Ørestad a regional hub.
     rate headquarters, award winning architecture
     and even Northern Europe’s largest centrally       Ørestad is a second-to-none location for
     located nature reserve to the heart of the city.   internationally-oriented companies. It is the
                                                        region’s fastest growing and most significant
     Ørestad has experienced an influx of corpo-        business development area, providing perfect
     rate headquarters, but is also home to more        conditions for recruitment and business part-
     than 11,500 residents. Development of the          nerships in Denmark and abroad.
     local area has resulted in international music
     and sports events, world-class architecture,       Locating in Ørestad means joining an inter-
     playgrounds, schools and safe cycle paths.         national business community that continues
     Copenhagen’s main convention centre and            to grow and develop. Lastly, a new network
     three of the largest hotels in Scandinavia are     association, Ørestad Innovation City Copen-
     also situated in Ørestad. In addition, the IT      hagen, has been established. It aims to make
     University of Copenhagen, the University           Ørestad the most powerful innovation district
     of Copenhagen, the Danish Broadcasting             in Greater Copenhagen. The association al-
     Corporation and Jean Nouvel’s Concert Hall         ready has thousands of members and several
     are located in Ørestad.                            professional networks.

     The Royal Arena, Copenhagen´s new concert          Ownership
     and sports arena with room for 15,000 spec-        Ørestad is developed by CPH City & Port
     tators, has just opened in Ørestad.                Development which is jointly owned by the

28
Ørestad. Photo: Kontrafram

City of Copenhagen and the Danish state. The     Pension, fund managers such as Nordic Real
company sells off land and develops projects     Estate Partners (NREP), Solstra Capital Part-
on a commercial basis.                           ners, and developers such as Arkitektgruppen,
                                                 Bonava, Tetris as well as Norwegian Steen &
Volume                                           Strøm and KLP and Swedish Fastighets AB
Nearly two thirds of the district-planned area   Balder.
has already been developed and the Northern
and Central parts are almost completed. The      Do not hesitate to contact CPH City & Port
total size of the area is 310 hectares, and      Development to hear more about the possibil-
approximately 400,000 square metres are          ities in Ørestad.
available to investors.
                                                 CPH City & Port Development
Current investors                                www.byoghavn.dk
Current investors are Danish pension funds       Phone: +45 3376 9800
such as PensionDanmark, AP Pension and PFA       E-mail: info@byoghavn.dk

                                                                                                      29
Theodora House.                                           Theodora House – Ottilia Jacobsen Square

     CARLSBERG CITY DISTRICT
     History                                              Scandinavia’s largest airport. Already the
     For more than 160 years the site was home            new railway station, Carlsberg Station, is the
     to Carlsberg Breweries and it is part of the         central connection hub and main entrance to
     Danish cultural heritage, not least because it       the new city district. It is expected to be one
     is home to many of Copenhagen’s architectural        of the busiest railway stations in Copenhagen
     treasures. When the new Carlsberg City Dis-          with approximately 24,000 travellers on a
     trict is completed, the city district will consist   daily basis and just four minutes from the
     of densely constructed buildings surrounded          Central Station.
     by charming spaces and squares with narrow
     streets and alleys combined with open green          Carlsberg City District will provide approx-
     parks and areas, which also contribute to the        imately 3,000 residentials, 4,000 parking
     unique view from the nine residential towers         spaces and 10,000 jobs and a number of retail
     ranging from 50 to 120 meters in height.             shops, bars and restaurants. All the projects
                                                          concerning offices and retail will be offered to
     Location                                             investors, both international and local, either
     Carlsberg City District is situated in the           before or after it is built.
     centre of Copenhagen, only 10 minutes from
     the City Hall Square in a taxi and offers easy       Ownership
     access to highways, 500 metres from the              Carlsberg City District is owned and developed
     metro, and is less than 15 minutes from CPH,         by the development company Carlsberg Byen

30
Over the next 8-10 years, the historic former
                                                  brewery located in the centre of Copenhagen is
                                                  being developed into a vibrant and diverse new
                                                  city district. When fully developed, Carlsberg City
                                                  District will comprise 600,000 square metres
                                                  divided into 45% residential, 45% retail stores,
                                                  offices and educational institutions and 10%
                                                  cultural and sports facilities. The new city district
                                                  will provide approximately 3,000 homes and 4,500
                                                  parking spaces and 10,000 jobs.

P/S, which was established 1st May 2012 and       located on the ground level in a number of
consists of shareholders; Carlsberg Breweries     buildings.
(25%), PFA Pension (30%), PenSam (22,5%)
and TopDanmark (22,5%).                           When Carlsberg City District is fully
                                                  developed in 2024 the area will contain
Volume                                            600,000 square metres of offices, retail
Campus Carlsberg, UCC, is already housing         shops, cafés, restaurants, residentials,
10,000 students and the building takes up         schools, kindergartens and different
56,000 square metres in total. The campus         cultural and sports institutions.
was ready for occupation short after the
opening of Carlsberg Station and furthermore      Do not hesitate to contact Carlsberg Byen
20 shops has already opened and been sold to      P/S to hear more about the possibilities.
an international investor.
                                                  Carlsberg Byen P/S
At the end of 2018 will office area of 25,000     www.carlsbergbyen.dk
square metres be finished. On top of that will    Phone: +45 7022 1799
60,000 square metres office space be initiated    E-mail: cby@carlsbergbyen.dk
in 2018. Many people have already moved into
their new residents and office space. A mixture
of retail shops, cafés and restaurants will be

                                                                                                      31
The first residential homes were occupied
                                                                         in 2015. Public functions such as day care
                                                                         centres, schools and sports facilities are
                                                                         developed as the district is established.

     Konditaget Lüders (urban space in Nordhavn). Photo: Ty Stange

     NORDHAVN
     History                                                         inviting squares and harbour promenades and
     The former industrial harbour area in Nordhavn                  a harbour swimming bath enables you to swim
     (North Harbour) is rapidly changing into a new,                 in the clean waters of Nordhavn. As a result
     unique waterfront neighbourhood. Nordhavn                       of the retail strategy, the first restaurants,
     is in the attractive harbour area close to the                  cafés, speciality shops and supermarkets
     city centre, where new islets enhance the view                  have already opened in the narrow streets.
     of, and access to the sea.                                      Public functions such as day care centres,
                                                                     schools and sports facilities are being devel-
     Today if you wander around the narrow streets                   oped as the district is established
     in the Århusgade neighbourhood – the first
     area to be developed in Nordhavn – it is hard                   Location
     to imagine that until 2014 the area was hidden                  Nordhavn is Copenhagen’s northern point of
     behind a steel fence as most of the area had                    entry. By 2020, two metro stations will open,
     free port status.                                               thus connecting the area to Copenhagen City
                                                                     even more. Furthermore, the expansion of one
     Nordhavn is developed in stages. The first                      of Copenhagen’s main freeways and the future
     offices opened for business in 2014, and in                     construction of a tunnel to Nordhavn will
     2015 the first residents moved into their                       ensure excellent connections to the national
     homes. Today almost 2,000 people live in                        road network. The distance to the historic city
     the sustainable neighbourhood, featuring                        centre is 5 km and about 18 km to Copenhagen
                                                                     Airport.

32
Nordhavn. Photo: By & Havn

The Århusgade neighbourhood is just the         and offices. The first development stage is
start of the development in Nordhavn. At the    640,000 square metres of which approxi-
moment and over the coming years, develop-      mately 140.000 is available to investors.
ment is taking place in the two Sundmolen and
Levantkaj areas. The northern part of Nord-     Current investors
havn is also being expanded by 100 hectares     Current investors are large Danish pension
through one of the largest ever land reclama-   funds such as ATP, PensionDanmark,
tion projects in the history of Copenhagen.     AP Pension and PFA, fund managers such
Once completed, Nordhavn will cover over        as Nordic Real Estate Partners (NREP) and
350 hectares.                                   CapMan and developers including CASA
                                                and KPC.
Ownership
Nordhavn is owned by CPH City & Port            Do not hesitate to contact CPH City & Port
Development which is jointly owned by the       Development to hear more about the possibil-
City of Copenhagen and the Danish state. The    ities in Nordhavn.
company sells off land and develops projects
on a commercial basis.                          CPH City & Port Development
                                                www.byoghavn.dk
Volume                                          Phone: +45 3376 9800
Nordhavn consists of 2,875 mio. square          E-mail: info@byoghavn.dk
metres floor space available for both homes

                                                                                               33
NEXT STEP
     The Greater Copenhagen area is great for       Find details about all construction projects
     business.                                      and development areas at
                                                    www.investcph.com
     Here you will find
     •	property investment opportunities in more
        than 30 urban development areas
     •	business opportunities in major public
        construction projects totaling more than
        EUR 5bn
     •	business opportunities in infrastructure
        projects totaling more than EUR 15bn
     •	and the ideal location for your logistic
        centre in the Nordic region

34       Inner harbour bridge. Photo: Kim Wyong
HELSINGBORG

                             HELSINGØR

                                                                             SWEDEN

                  HILLERØD

                                                                    LANDSKRONA

                                                     Øresund
                                                                              SKÅNE

              DENMARK                  COPENHAGEN
                                                   Nordhavn

                       Carlsberg
                       City District                           The Øresund
                                                               Fixed Link

ROSKILDE                                 Ørestad
                                                                                 MALMÖ
                                             Copenhagen
                                             International
                                             Airport

           8 KM
PRODUCED IN COOPERATION WITH
Airport Project Development    City of Copenhagen            Kammeradvokaten
www.airport-pd.com             www.kk.dk                     www.kammeradvokaten.dk

ATP Real Estate                Copenhagen Capacity           Pareto Securities
www.atp-realestate.dk          www.copcap.com                www.paretosec.com

Byggesocietetet                CPH City & Port Development   Realkredit Danmark
www.byggesocietetet.dk         www.byoghavn.dk               www.rd.dk

Carlsberg City District        Cushman & Wakefield I RED
www.carlsbergbyen.dk           www.red.dk

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