Danica Pension is investing DKK5bn (€670m) in a new development in central Copenhagen, buying up postal buildings from logistics firm PostNord to build a district that will include offices, hotels and homes.
Peter Mering, investment director at Danica Pension, said: “We are facing an exciting task in being able to develop Copenhagen’s most attractive location.”
The property in the deal is in central Copenhagen next to the main train station, and currently houses the Danish headquarters of PostNord along with its mail terminal.
Danica Pension said it expected to develop the project in conjunction with BlackRock, which was one of the financial partners it worked with.
BlackRock will contribute with its international investor base, as well as its international perspective on development tasks, the company said.
Mering said the location of the project and its size meant the pension fund was very ambitious in the vision it had for the new city district.
Danica said the plan was to create a new part of the city where both Danish and international businesses could work in a lively, open and attractive environment.
It said the project would include a recreational green park similar to High Line Park in Manhattan – a linear park built on an elevated section of a disused New York train line.
There will be space for businesses as well as services and residential properties to support the commercial activities, including serviced flats for visiting business people.
According to seller PostNord, the real estate property itself is being sold to Danica Pension for DKK925m.
The deal is to take effect on 30 June this year, with PostNord sub-leasing the office and logistics space it needs after that date from Danica Pension until 2018.
During this period, PostNord plans to move to premises that are better for future operations, the company said.
PortNord is being advised on the deal by Catella corporate finance.
The deal includes 39,294 sqm of land, on which Danica Pension said it planned new building including 125,000 sqm of space.
Construction will take place between 2016 and 2020, according to the plan.
Danica Pension said it aimed to invest more in significant development projects within Denmark over the coming years, with real estate investments focusing on attractive locations in the country’s biggest cities.