Regional PropTech Overview, Denmark - October 2018

Thanks to Mikkel Alsø & Trine Ejsing

Danish Property Federation
Copenhagen, October 2018

The Danish real estate market

In Denmark, the population is approximately 5.6 million, the landmass is 43.000 km2, and the investment volume in the Danish real estate market 64 billion where the foreign shares account for about 47 percent. The split consists of 37 percent residential, 33 percent office, 11 percent retail and 5 percent industrial. The housing market consists of 47 percent owner-occupied, 7 percent co-operative, 17 percent private rental, and 20 percent social rental. This paragraph is based on 2016 data.

According to the Danish Property Federation market statistics in 2018, the property investment market consists of respectively 44 percent office, 30 percent residential, 21 percent retail, and 5 percent industrial which is based on the annual rent. In Denmark there is an increasing demand for commercial premises, the rent levels are increasing as well, and the Danish economy is strong. Currently, the vacancy level is the lowest in eight years.

In 2017, the total return on investment properties was 7.2 percent; 3.9 income return and 3.2 capital growth. The total return of residential properties was 10.2 percent in 2017 which was primarily driven by the capital growth of 6.9 percent. The opposite is the case for industrial which had a total return of 9.5 percent in 2017 primarily driven by an income return of 6.2 percent. An analysis from the Danish Property Federation shows that from 1996 to 2017 investment properties have the best risk adjusted return compared to stocks (OMXC20) and bonds (mortgage bonds). Although stocks had the highest average total return of 10.1 percent the risk was 23 percent on average in the annualized period resulting in an adjusted return of 0.32 percent when the risk free rate is taken into account. Mortgage bonds had a total return of 5.3 percent and a risk of 3.2 percent in the same period resulting in an adjusted return of 1.08. Investment properties had an average total return of 7.7 percent and a risk of 5 percent which results in the best adjusted return of 1.23.

The Danish PropTech market

In Denmark, PropTech is not as widespread as in countries like UK, The Netherlands, USA etc. Since most of the PropTech companies are either start-ups or relatively new, there is not a clear overview of how many tech firms are settled in Denmark. A guess would be around 30-50 active companies all over the country.

Thus, an overview of VC's investing in or being interested in PropTech is also hard to tell at the current time, although City Capital, PreSeed Ventures and Seed Capital are a few examples.

PropTech solutions are of an increasing interest regarding facility management, portfolio management, investment strategies, and construction technology. We presume, that many real estate companies have adopted PropTech in a smaller scale whereas e.g. international companies like CBRE would likely have a larger scale adoption of tech products regarding management and investment strategy.

PropTech companies in Denmark

To sum up the companies - of those are known to The Danish Property Federation at this time:

Education in PropTech?

PropTech is not in the curriculum at universities and furthermore real estate is not even taught at high schools or universities. Only few housing courses is some years available as electives on universities. As such, the Danish Property Federation have a Property Management education and a collaboration with the financial sector to redirect available staff to the real estate sector. There is a high demand for property management personal in Denmark.

PropTech communication

There are no official networks for national PropTech communication. International podcasts and networks are the most common medias to getting PropTech knowledge and experience, and WhatsApp groups is another way natural to connect. Thehub.dk lists and links to all startups in Denmark, including PropTech startups.

Emerging startups in Denmark

As a Property Federation it is not possible for us to make a ranking, but here’s a list of the latest startups:

Brickshare: Crowdfunding of properties. Just as you can invest small amounts in shares, you can invest from DKK 10,000 through properties in Brickshare.

Byggeprojekt.dk: Development of building information and documentation from project planning to delivery.

Dalux: Build app that makes big 3D models available and easy to use on site.

DinGeo: Collects and supplies data about homes for more than 400,000 homes searches each month. In this way, home buyers get a better decision basis before signing the agreement and several of the data can be used in the price negotiations.

Ekofolio: Platform for investment in forest properties using blockchain technology.

Flexya: A comprehensive tool for real estate agents for the handling of housing matters.

GenieBelt: All projects around construction gathered on one software platform. The system can communicate directly between the construction site and the office.

JUST-SOLD: Creates future home sales by linking several real estate agents to the same property. Thus, the seller gets the opportunity to sell his property faster and through a larger customer card.

MatchOffice: Rental of offices and offices around the world from one website.

Minuba: Case and order management for craftsmen.

Prop.Exchange: Digital Auction Page for transparent Commercial Real Estate transactions.

RentSafe: A Kind of Trustpilot or LinkedIn for Home Renters. Through RentSafe, tenants are verified and get a so-called "rent score", so the uncertainty diminishes and matching between homeowners and housing seekers takes place in an intelligent way rather than by chance. Goodbye to the homeowners.

StudioDNA: StudioDNA digitizes building archives. Instead of having the building archive (drawings, manuals, contracts, budgets, etc.) scattered physically, you can put it all in the pocket of an app.

Welcome Bob: Welcome Bob ensures safe and easy access to the apartment or office, for example, guests from AirBnB or Bude from Nemlig.com, the seasons etc. This is done using a tablet doorphone at the doorway as well as a smartphone app for iOS and Android.

Wise Home: Based on sensors and metrics, Wise Home can monitor and analyze a variety of parameters in and around the individual rentals in your property.

Danish Property Federation

Trade Association for the Danish property industry

Noerre Voldgade 2, DK-1358 Copenhagen K. Mobile: +45 31 62 01 08

Phone: +45 33 12 03 30. www.ejendomsforeningen.dk