Market in Minutes - Copenhagen High Street Q1 2025

Copenhagen Vacancy Declines - Now Below The National Average 

The Copenhagen office market has changed following the high vacancy levels seen in the wake of the COVID-19 lockdowns when vacancy peaked at around 8 % during 2020. The elevated vacancy at the time was largely attributed to significant development activity and changing working patterns with the increasing prevalence of working remotely.

After the reopening of the economy Copenhagen vacancy dropped notably from approx. 8 % to around 4.5 % in Q4 2022. The decline was broadly mirrored in the national trend, though vacancy in Copenhagen City remained higher than both the Greater Copenhagen area and the national average. Since 2023 the trend has reversed with climbing office vacancy, driven by high development activity in 2021-2023. This upward trend was most pronounced in Copenhagen, where office vacancy reached around 6.7 % in Q1 2025, while the national average remained lower.

In Q2 2025, office availability in Copenhagen City has dropped significantly – by approx. 1.4 percentage points to 5.3 % bringing Copenhagen office vacancy down below the national level. This divergence can, among other factors, be explained by a distortion in demand between Grade A and Grade B offices as occupiers and investors favour energy-efficient and environmentally certified office space. Older offices without green certifications are accordingly facing growing challenges in attracting new tenants.

New Offices Set The Benchmark And Push Prime Rents Upwards

The focused demand for office space offering superior facilities and modern layouts means that new office developments can generally be let at higher rent levels than older buildings, of which Copenhagen has a substantial stock. New-build schemes are typically of higher quality, more flexible and more sustainable than older office properties, driven by increasing ESG requirements from both occupiers and investors. This trend is reinforcing demand for new office space and contributing to upward pressure on prime rents. For older office properties, this means that investments in refurbishment and upgrading will be necessary to remain competitive.

Widening Rental Spread In The Office Market

The gross rental spread between prime and secondary office space in Copenhagen has widened over the past five years. Prime gross rents have increased significantly, driven by stringent requirements for quality, location and sustainability in modern office buildings, and are now approaching DKK 3,000 per sqm per year. In contrast, rents at the lower end of the market have seen only modest growth, rising from approximately DKK 1,500 to DKK 1,600 per sqm per year since 2020. As a result, the gap between top and bottom rents in Copenhagen has widened markedly.

The weak rental growth at the lower end of the market reflects subdued demand for Grade B office space relative to Grade A. The average asking rent for available office units sits in the lower half of the rental range, highlighting that the current supply in Copenhagen is largely dominated by older office stock.

Early Signs Of Recovery In The Investment Market

In recent quarters, investment activity in the office market has shown a positive trend, as interest rates have been reduced several times. When interest rates were at their lowest in 2022, prime capital values peaked at approx. DKK 68,000 per sqm before dropping to a low of around DKK 56,000 per sqm in Q1 2024. Transactions in 2022 included Gamle Carlsberg Vej 3 and Carl Jacobsens Vej 30, which were sold at approx. DKK 49,500 per sqm and DKK 38,000 per sqm, reflecting yields of 3.30% and 3.65 %, respectively. In the most recent quarters, we have observed a recovery with prime capital values reaching around DKK 60,000 per sqm and prime yields at approx. 4%. In May 2025 the sale of Nykredit’s HQ – The Svanemølleholm project in Nordhavn – was completed as a forward sale agreed in 2021 when AP Pension entered a joint venture agreement to sell a 50% stake in the company owning the office building to German KanAm Grund. The price exceeded DKK 2 billion for half of the total 75,500 sqm, making the transaction one of the most significant office deals of 2025.