ODENSE INVESTMENT POTENTIALS WELCOME TO ODENSE The Next Big Thing(s) The city of Odense is in the midst of a profound transfor- During the last decade, Odense has become the European mation, and we are beginning to see the results of all the hotspot for robotics. The city has a clear vision and a efforts applied to modernizing the city. New buildings are dedicated goal of becoming a global leader of industrial erected in the city center, on the waterfront and along the robots. Odense Robotics is a cluster of 130+ specialized tracks of the city’s new light rail. The light rail will be fully robotic and automation enterprises that provide jobs for operational by 2021 and make travelling easy and conve- 3,900 employees in Odense. Odense Robotics is steadily nient in Denmark’s third largest city. steering Odense towards becoming one of the world’s The University campus is also evolving, a new university leading cities for robotics. Our robotic companies are hospital is materializing alongside the continually expanding growing at rates close to 50%, and they are expected University, a new city neighbourhood Cortex Park houses to employ 4,800 employees by 2021. This Expanding students, researchers and workplaces, plus, the new robot cluster has already caught the interest of massive Odense Robot Campus has laid ground for a new international VC and acquisition investments, attracting development. beyond €800 million in investment. The population in Odense continues to grow, and we have Denmark was one of the first European countries to allow already seen the number of citizens increase to well over big scale cannabis production. Since the introduction of 200,000 inhabitants over the last years. medical cannabis in 2017, some of the biggest The growth in the number of citizens generates a need for international producers of medical cannabis have invest- more housing options, and this has attracted national and ed in production sites on Fyn. The vast majority of Danish international realtors and real estate investment funds to companies expect to be exporting more than 80% of their Odense. production by 2023. Europe’s legal medical cannabis sales totaled €286 million in 2018, and it is expected to have an New exciting urban development is already emerging, annual growth of 83%. In 2023, and we will see so much more in the years to come. the market will reach €7.2 billion. The companies in In Odense, the public sector actively supports new Denmark expect to follow the same pattern as the num- investors and enterprises that set up businesses ber of employees in Denmark is expected to grow rapidly and new projects in the city. With the current rate of from 196 to 1,233 within three years. development, moving to Odense is also a way to engage in strong business networks with lots of international The expanding clusters and the increased population connections, knowhow and insight. Choosing Odense serve as a focal point for the development of all aspects has become a great strategic move. of urban living throughout the city. Odense truly has a lot to offer new investors and enterprises that are looking for We welcome you and invite you to participate in the great business opportunities and international transformation of Odense. potential for growth. Peter Rahbæk Juel Mayor, City of Odense International Investment International property investors find solid returns on investments in Odense. In 2017, Niam invested in the acquisition of HD Property which is domiciled in Odense. Niam is the largest private property owner in the Nordics, with a base in Stockholm (Sweden) and local offices in Copenhagen and other Nordic capitals. The acquisition of HD Property was the second largest transaction in Denmark in 2017 - amounting to a value of approximately €550 million. In addition to the acquisition of HD Property, Niam has since acquired several additional residential, industrial and commercial portfolios. Niam is a highly dedicated contributor to the international investment envi- ronment in Odense. Niam’s investments are felt throughout neighborhoods by adding value to properties and highlighting the charm and attractiveness of the local market. Housing Investment AP Pension, which manages pension funds amounting to more than €50 billion, is a key partner in the development of the very heart of the city center. A whole new, 40,000 m2 city district is currently being developed. This new and attractive urban living area features market halls, restaurants, cafes and urban spaces centered around the shopping district, the city’s new concert hall and the new Hans Christian Andersen Museum. The urban development brings together several local and national real estate investors with AP Pension being the largest. AP Pension’s investments in new residential and commercial properties in the city center have an estimated value of €80 million. Office investment The pension fund PFA is involved in the expansion of Campus Odense, with a total investment sum of €51 million. The purchase is made as a direct invest- ment in Cortex Park. Up to 2022, two properties of 11,500 m2 and 5,500 m2 will be built as multi-user offices. “With PFA, we are delighted with the city of Odense, which is a city in an extremely positive development - both in business and housing, and the location in the ambitious and well-located business area Cortex Park is absolutely perfect. The multi-user offices will be of interest to a broad target group, and I am sure they will help to strengthen Odense’s position as a city with a good business and research environment. At the same time, it is a solid long-term investment for PFA’s customers,” says Mikael Fogemann, head of Danish Property, PFA. Odense Urban Development Odense Tramway (phase 2) Vollsmose Port of Odense Inner harbor Odense Tramway City campus/ Nørrebro The new Hans Christian Andersen Museum Fra Gade Til By Garden City Urban renewal OUH Odense Tramway (phase 2) Robot Campus Munkebjerg Park Cortex Park Dalum – The Old Paper Factory University of Southern Denmark Odense Tramway New Odense University Hospital Business Park Odense Population Odense already has over 200,000 inhabitants, and according to Statistics Denmark, Odense is expected to have grown by more than 21,000 people, equivalent to 10.4% by 2045. As seen in the graph below, the majority of the growth, approximately 54%, is expected to occur in the coming decade. Additionally, it should be noted that the growth rate for Odense is expected to be considerably higher due to urbanization. Market pulse Residential yields Residential rents 7% 220 200 6% 180 5% 160 140 4% 120 3% 100 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Prime yield Secondary yield Prime rent Secondary rent Office yields Office rents 8% € 175 7% € 150 6% € 125 5% € 100 4% € 75 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Prime yield Secondary yield Prime rent Secondary rent Industrial and logistics yields Industrial and logistics rents 10% € 60 9% € 50 € 40 8% € 30 7% € 20 6% € 10 5% € 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Prime yield Secondary yield Prime rent Secondary rent Market description Odense is already seeing a significant increase in the number of new enterprises that have established themselves in and around the city. One of the outcomes is an increased demand for commercial and industrial property. Vacancy levels have plummeted from more than 6% in 2012 to 1.9% in 2019. For this reason, prime industrial rents have increased by 25%, to approximately €55 per m2 /year. Prime office rents remain steady at €160 per m2 /year, however, with continually decreasing vacancy rates, these figures may change over time. The attractiveness of Odense is also detectable in the market for residential properties. Prime yields remain stable at 4 %, while rents have continued climbing. Residential rents are currently at approximately €200 per m2 / year for prime properties. Office rental activity is developing steadily. Rental demand comes primarily from companies based in Odense, Tenants are purposefully seeking modern facilities that offer flexibility and the opportunity for effective floor plans. The south of Odense, close to the campus of The University of Southern Denmark and the transnational motorway, has experienced very high demand for industrial properties, with only few properties available. The demand for office space is picking up in the same area as the attraction for the industrial and robotics hubs are growing stronger. % Commercial property vacancy 12 10 8 6 4 2 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: Ejendomstorvet.dk Office Retail Industrial and logistics For more information, please contact: Invest in Odense Jes Zinck Severinsen Investment Manager www.investinodense.dk Phone: +45 3091 3651 E-mail: [email protected] investinodense.dk/mipim.