Danish roundup: Danica Pension, Lægernes, Hoffman, Veidekke, PenSam, Sjælsø
DENMARK – Danish pension funds Danica Pension and Lægernes Pensionskasse are investing DKK450m (€60.3m) in the extension and re-development of a shopping centre in Copenhagen.
The funds signed a contract with Hoffmann – the Danish subsidiary of Scandinavian contractor and property developer Veidekke – to remodel and enlarge the Frederiksberg Centret.
A new storey will be added to the retail centre, and the number of parking spaces will be increased by 50% by means of a rooftop car park, Veidekke said.
The total retail area will expand by around 10,000 square meters, providing space for 25 new shops.
The facades and interior of the centre will also be upgraded.
Torben Bjørk Nielsen, chief executive at Hoffmann, said: "It has been a long and challenging process, which has succeeded thanks mainly to the good collaboration between the client, the local authorities, the contractor, the various advisers and the tenants in the centre."
All parties had done their utmost to complement each other, he said, and because of this construction could now get underway.
In other news, PenSam said it was investing DKK500 (€67m) in a residential development on Copenhagen's harbour front.
The labour market pension fund signed an investment and financing agreement with property developer Sjælsø for the Bolværket residential project in Teglholmen.
It said its agreement with Sjælsø was innovative in construction project financing terms, and would contribute to a continued high return for the fund.
When the construction was complete, PenSam would own half of the homes and use them as rentals, the pension fund said.
The 21,000 square meter project – designed by Danish architects Arkitema – will include 206 apartments and six smaller commercial leases.
Under the terms of the agreement, PenSam will acquire 50% of the project on forward-funding terms and will also provide Sjælsø with construction financing for the remaining part of the project, as well as for the planned 250-space multi-storey car park.
Sjælsø said its bank would contribute financing.
The portion of the build not sold to PenSam is expected to be resold as owner-occupied apartments at a later stage of the project.
Benny Buchardt Andersen, CIO at PenSam, said: "These years, PenSam is increasing its investments in property as part of the implementation of a more active investment strategy aimed at generating consistently high returns for our customers."
The fund said Bolværket had significant potential.
Sjælsø's chief executive Flemming Joseph Jensen said the company expected to continue selling residential projects in the Greater Copenhagen area to both Danish and international investors.
"The continued population inflow to Copenhagen supports the demand for new housing as a long-term investment case for investors," he said.
PenSam also reported investment results for PenSam Liv – its main pensions business – posting a 10.3% return for the nine months to September.
This compares with the 6.8% return reported for the first half 2012.
PenSam said corporate bonds, equities and emerging markets bonds had all been particular contributors to the result.
These asset classes produced returns of 18.1%, 13.4% and 12.5%, respectively, in the nine-month period.
Buchardt Andersen said: "We are very pleased with the high return, which is a result of a more active and aggressive investment strategy.
"The global economy has remained fragile, and, with the recurrent political crises, we are very focused on spreading risk across many asset classes in order not to invest too one-sidedly."