Radhika Garg is proposing to start a mortgage broker business called Garg Real Estate (GRE) focused on serving the retirement community in Copenhagen, Denmark. The business aims to break even within two years and achieve high customer satisfaction. GRE will provide comprehensive real estate services including property search, mortgage consulting, appraisals, and title transfers. Most services will be outsourced. The business will focus exclusively on the retirement housing market segment in Copenhagen. Success will depend on maintaining close client relationships and offering a full service experience. A SWOT analysis found that population growth in Denmark presents an opportunity for industry growth while declining construction values could threaten revenue.

1. BIRLA INSTITUTE OF MANAGEMENT TECHNOLOGY
PGDM BATCH (2019-21)
GLOBAL BUSINESS ENVIRONMENT
SETTING UP MORTGAGE BROKER BUSINESS IN DENMARK
Submitted to:
Dr.Jagdish Shettigar
Dr.Monika Jain
Submitted by:
Radhika Garg
19DM149
Group02
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2. ACKNOWLEDGEMENT
“I hereby take the opportunity to express my profound sense of gratitude and
reverence to all those who have helped and encouraged me towards the successful
completion of the project.”
“Firstly, I would like to express my thanks to Birla Institute of Management
Technology for giving me such a wonderful opportunity to widen the horizons of my
knowledge.”
“I would also like to thank my project guide Dr.Jagdish Shettigar & Dr.Monika Jain for
their immense guidance.”
Radhika Garg
19DM149
Group 02
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3. TABLE OF CONTENTS
S.No. Particulars Page No.
1 Introduction 04
2 Real Estate Sector in Denmark 04
3 Policy Approach 05
4 Supply and Demand in Denmark Market 06
5 Competitors in Real Estate Industry 07
6 Business Proposal 08
7 SWOT Analysis 09
8 References 10
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4. I. INTRODUCTION
Denmark, officially the Kingdom of Denmark, is a Nordic country in Northwest Europe. Denmark
proper, which is the southernmost of the Scandinavian countries, consists of a peninsula, Jutland,
and an archipelago of 443 named islands, with the largest being Zealand, Funen and the North
Jutland Island. The islands are characterized by flat, arable land and sandy coasts, low elevation
and a temperate climate. The southernmost of the Scandinavian nations, Denmark lies southwest
of Sweden and south of Norway and is bordered to the south by Germany. The Kingdom of
Denmark also includes two autonomous territories in the North Atlantic Ocean: the Faroe
Islands and Greenland. Denmark has a total area of 42,924 km2 (16,573 sq mi), land area of
42,394 km2 (16,368 sq mi), and the total area including Greenland and the Faroe Islands is
2,210,579 km2 (853,509 sq mi), and a population of 5.8 million in Denmark proper
(As of 2020).
Denmark has a flourishing economy. According to IMF estimates Denmark has a GDP growth rate
of 2.3% in Q3 of 2019. It is a small country with an open economy and a structural balance of
payments surplus. The country is highly dependent on foreign trade.
Denmark economy is mainly dominated by the service sector, which includes 80% of all the jobs,
whereas about 11% of the employees are working in the manufacturing industry and 2% are in
agriculture. The annual household per-capita income of Denmark people was
42,589.763 USD in December 2019. In a most recent survey by the World Bank, Denmark secured
1st rank in Europe and 4th in the world for ease of doing business. Denmark is 7th in the world on
the most inviting countries for capital investment (according to Forbs Business Magazine).
II. REAL ESTATE SECTOR IN DENMARK
Over the past few years the Danish real estate market has been very active and on the rise with
regard to both commercial and residential real estate. The players are predominantly institutional
investors (Danish and non-Danish), real estate funds and property developers.
The market has generally been seen as very attractive in recent years for both local and foreign
investors and the fundamentals are strong – particularly in the larger cities, with Copenhagen still
being the main focus for most foreign investors. The hotel segment has been very active, with many
new rooms being added to the market and currently under construction. The same applies to the
residential markets, with many new projects being completed over the past few years in a market
with a clear upward trend. The logistics segment is also characterized by high activity and the office
segment currently sees low vacancy rates (and thus potential investment opportunities). The
outlook for the coming years remains excellent, with considerable investor interest also being
directed at the segment for student and senior housing.
Danish market for investment properties is now dominated by players with deep pockets, including
Danish pension funds, foreign and Danish real estate funds and high net worth individuals. In the
attractive areas, especially Copenhagen and Aarhus, competition for high-quality real estate is high
and prices have been increasing and yields decreasing accordingly. For the most attractive
properties, yields down to 3 per cent have been seen, even if there is no immediate potential for
improving profitability of the property in question. The purchase interest even at these yields is
driven by professional investors seeking alternatives to investments in bonds generating yields at
between 0.5 and 2.5 per cent, which for the long-term bonds are combined with a substantial price
risk.
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5. III. POLICY APPROACH
(i) System of registration
Real estate in Denmark is accurately mapped in a grid covering all Danish land that is made
available and maintained by the Danish Geodata Agency. All rights in Danish real estate, including
ownership, can be registered in the central Danish land registry, an electronic register that includes
a section for each individual property.2 The land registry is administered by the Danish courts.
All substantial rights in Danish real estate should be registered in the land registry, as such a
registration made in good faith extinguishes existing, non-registered opposing rights, and protects
the registered rights against future opposing rights. Among the rights that should be registered are
title (ownership rights), mortgages and rights of use extending the rights according to the
legislation on tenancies.
Moreover, public registers regarding buildings, ascertained pollution and pollution risk, tax
valuations and area plans are maintained and are sources of information about Danish real estate.
Private registers of real estate for sale and hire and of real estate sold are also available.
(ii) Investment vehicles and choice of law
Investment in Danish real property is generally made through one or more Danish companies,
normally a Danish holding company with subsidiaries each owning a single property or a group of
properties. The structure creates a profit centre for each property or groups of properties and is
tax efficient both when operating the property or properties and in the event of sale.
Under Danish law, the parties are free to agree on any term and condition for the purchase and
sale of Danish real estate, including that the transaction be governed by the laws of a country other
than Denmark, or that legal proceedings be instituted before the courts in a country other than
Denmark or be resolved by arbitration. However, the parties should take into consideration that a
number of legal issues regarding the real property, including registration and protection of rights,
tenancies and public regulation, will be subject to Danish law and venue in any case.
(iii) Real Estate Ownership
 Planning
Planning in Denmark is governed by the Danish Planning Act. The planning authorities in Denmark
are the Danish Ministry of Industry, Business and Financial Affairs and below that the Danish
municipalities, of which there are 98.
According to the Planning Act, each area of Denmark is labeled either as rural, urban or as a
holiday-house area, and the possible land use depends primarily on this label. The options for
building in rural areas are largely restricted to buildings and other facilities necessary for the farm
units in the area. Similarly, the options for building in holiday-house areas are restricted to
primarily holiday houses.
 Environment
Under the Act on Contaminated Soil, the Danish regional administrations map contamination and
possible contamination of land on the basis of available information on the use of the land – both
in the past and in the present – and on the basis of field studies. Field studies are, however, only
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6. carried out on land likely to be so heavily contaminated or so located that public health, including
drinking water, or the environment is endangered. The registrations made are publicly available.
The Environmental Protection Act lays down the 'polluter pays' principle, which is detailed and
expanded in the Act on Contaminated Soil. The principle implies that the polluter is liable to carry
out, and pay the costs of, all measures necessary to prevent, limit, analyse and clean up the
pollution.
 Tax
No transfer tax or stamp duty applies to the purchase of real estate or real estate financing.
However, all substantial rights in Danish real estate should be registered in the land registry, as
such a registration made in good faith extinguishes existing, non-registered opposing rights, and
protects the registered rights against future opposing rights.
To register rights in the land registry, the following registration duties must be paid:
a. Registration of title to the property: 1,660 Danish kroner plus 0.6 per cent of the highest of
the purchase sum for the property and the public valuation of the property.
b. Registration of mortgages on the property: 1,660 Danish kroner plus 1.5 per cent of the
principal of the mortgage deed. However, if mortgage deeds previously registered on the
property are cancelled simultaneously, the registration duties paid on such mortgage deeds
can be deducted. The same goes for registration duties represented by 'duty' mortgage
deeds.
c. Other rights, including rights of use: 1,660 Danish kroner.
When purchasing building land or new buildings, VAT, at 25 per cent, on the purchase sum must
normally be paid.
(iv) Developments In Practice
By an amendment to the Planning Act, dated 3 March 2015, the former Danish government, led by
the Social Democrats, authorized the municipalities to include in local development plans the
provision that up to 25 per cent of housing stock in an area should be social housing stock. In
general, such provision will impose a loss on landowners, as building rights to social housing do not
hold the same value as building rights to commercial buildings or residential buildings not meant
for social housing. Furthermore, decisions according to the Planning Act are regarded as regulation
without compensation under Danish Law, meaning that no compensation is achievable from the
Danish state or municipality for the landowners.
IV. SUPPLY AND DEMAND IN DENMARK MARKET
Demand from midsized companies is driving flexible space take-up
Historically high demand, low vacancy rates and innovative solutions defined the Copenhagen office
market in 2018. The decline in unemployment in the strong Danish economy has driven vacancy
rates down, which currently stands at 5.9% for Copenhagen’s office market. Development continues
to go forward in renovated offices and new buildings but in Denmark, the trend for co working
space started to accelerate over 2018. It is in that segment that Copenhagen is seeing new
developments going forward as international investors and developers started building co working
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7. spaces and office hotels. Concept developers look primarily at the best locations in Copenhagen,
which is crucial for co working spaces. It is essential that the property is located close to great
infrastructure, public transport, as well as near other high growth companies. Demand continues to
be generated by small and medium sized businesses that are increasingly choosing flexible office
facilities where they can expand quickly. Large corporations are either actively building their own
headquarters to accommodate staff or pre-letting space. Diminished supply plus ongoing space
requirements resulted in pressure being maintained on rents that stood at DKK 2,200/sq m/year
(€295/sq m/year) in the most central districts of Copenhagen.
Investment in logistics property almost doubled in 2018
Office investment volume was approximately €2bn for Denmark and what was particularly striking
about 2018 is that investment in industrial and logistics properties almost doubled from 4.5% to 8%.
There are positive prospects for the investment market in 2019, as buyers still wish to acquire core
prime properties even with a shortage of product.
Given the relatively strict geographic and regulatory supply restrictions in Copenhagen, housing
supply has not responded adequately. This has fueled a gap between supply and demand resulting
in a rapid and quite unstable housing price development. This implies at least two socio-economic
challenges.
V. COMPETITORS IN REAL ESTATE INDUSTRY
Jeudan
Jeudan is the largest listed real estate company in Denmark. It is the largest private real estate
investment company in the country and its activities also comprise property and facility
management. The company is headquartered in Prince William Mansion in Copenhagen.
DADES
DADES (Det Almindelige Danske Ejendomsselskab) is one of the largest private property investment
companies in Denmark. Shopping centres account for just over half of its portfolio, making it the
second largest owner of shopping centres in the country. The company is headquartered
in Kongens Lyngby in the northern suburbs of Copenhagen.
Karberghus
Karberghus is a Danish real estate company based in Copenhagen, Denmark. It specializes in the
acquisition; restoration and renting out of historic properties in the Copenhagen area and is a
member of BYFO, Historiske Huse and Europa Nostra. Karberghus is the owner of the
company Office Club offering co working in historic buildings in Copenhagen.
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8. VI. Business Proposal
Objectives
The three year goals for Garg Real Estate (GRE) are the following:
 Achieve break-even by year two.
 Establish minimum 95% customer satisfaction rate to establish long-term relationships with
our clients and create word-of-mouth marketing.
Mission
It is the mission of GRE to provide real estate services in the newly established community, located
in Copenhagen, Denmark. GRE is a full service real estate, mortgage, and title company.
Keys to Success
GRE's keys to long-term survivability and profitability are as follows:

 Establish and maintain close contacts with residential real estate listing services, and all
other service organizations that GRE use.
Keeping close contact with clients and establishing a well functioning long-term relationship
with them to generate repeat business and obtain a top notch reputation.
 Establish a comprehensive service experience for our clients that includes consultation,
appraisal, sale preparation, community information, moving consultation, etc.
Company Ownership
The company will be owned by Ms. Radhika Garg, who will be putting up equal amounts of equity.
All other financing will come from loans.
Services
GRE offers comprehensive real estate, mortgage, and title services to our diverse clients. We will
have a premier position as the dominant seller of these new homes, condos, and retirement
apartments. In addition we will offer a full range of services to facilitate the purchasing and selling
of real estate including the following:
 Home search database.
 Moving consulting, quotes, planning, etc.
 Mortgage consulting and loan preapproval.


 Communityinformation.
Title transfer.
Obtaining a comparative market analysis for potential sellers.
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9.  Appraising.
 Property preparation.
Much of the company's services will be outsourced. This includes title transfer, loan approval,
appraising and market analysis services.

 Our first priority is to help the seller set a realistic price on their property. But like most of
us who have invested untold hours of time and energy into our property it may be difficult to
remain objective when it's time to price it and put it up for resale. There's a good reason for
this. Usually property owners have much more than dollars and cents tied up in a home - an
individual commitment that makes it a highly valued personal statement. But value becomes a
reflection of the buyer's perspective as well when that property is put up for sale...and pride of
ownership may not translate to market value.
When house hunting, the buyer will shop the market, compare available homes, and try to
find the very best value. Consequently, when the seller is ready to list their home, they need to
step back and sharpen their focus. Look at the home objectively and price it competitively.
 Listing property at 5% above current market value gives it a sales advantage that is ten
times greater than if priced at 15-20% above. That's a statistic that can't be overlooked. An
overpriced home will suffer from lack of exposure, and the longer it remains on the market the
more difficult it will be to sell. And it will remain so, even after price reductions are taken to
attract buyers.
 That is why it is very important to determine an accurate and objective market value for
your property. We'll work with the buyers and sellers closely to achieve that, and to maximize
their opportunities to sell their home at the best possible price within acceptable time frames.
Market Segmentation
GRE will be concentrating exclusively on the retirement market segment. This means the company
will be focused on buying and selling real estate to those seeking to retire in the Tucson area. This
market segment has special needs and is almost always looking to find homes in specially
constructed communities that serve those special needs such as medical, dining, entertainment,
shopping, and other such facilities.
VII. SWOT Analysis
The industry is exposed to the following threats and opportunities:
The value of residential construction is an indicator of the level of investment in, and values of,
new and existing residential structures. Higher investment in residential construction boosts
housing prices and indicates greater sales activity. This increases commissions for brokers and
agents, benefiting industry revenue. However, the value of residential construction is expected to
decline in 2019, posing a potential threat to the industry.
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10. Population growth bolsters demand for housing, which pushes up housing prices and associated
industry commissions and brokerage fees. Consequently, population growth generally leads to
higher industry revenue and profit. The population of Canada is expected to grow in 2019,
representing a potential opportunity for the industry.
VIII. References
https://www.globalpropertyguide.com/Europe/Denmark/Price-History
https://www.cbre.dk/en/research-and-reports/Denmark-Real-Estate-Market-Outlook-2019
https://www.dst.dk/en/Statistik/emner/arbejde-indkomst-og-formue/formue-og-gaeld/fast-
ejendom
http://unassumingeconomist.com/2018/06/housing-market-in-denmark/
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