Danish pension fund PKA invests €32m in Copenhagen residential property
DENMARK - PKA is investing DKK240m (€32.2m) in a residential property development in Copenhagen and says it anticipates strong rental demand when building work is finished.
The DKK140bn pension fund administrator has agreed to buy a development of 107 flats in Islands Brygge - a harbour-front area in central Copenhagen, which has seen substantial redevelopment since 2000.
PKA's head of real estate Nikolaj Stampe said: "All forecasts predict there will be big demand for residential property, particularly in Copenhagen in the future, and therefore the residential property market around Greater Copenhagen is attractive to invest in."
Islands Brygge had developed very positively in the last few years, he said, and was only a short distance from the beach, countryside and City Hall.
This means there is strong demand for homes in the area, Stampe added.
PKA is buying the construction project from FB Gruppen A/S, with the sale brokered by DN Erhverv A/S.
The building plot is the last in the quarter to have a view over Amager Fælled (Amager Common) and the Øresund Bridge, and the flats are expected to be ready for occupation in the spring of 2013, PKA said.
Acknowledging non-profit property organisations have recently had major problems renting out homes, Stampe said this problem had been concentrated particularly in sparsely populated areas.
"PKA does not have such problems - we are focused on the big Danish cities where demand for quality rental homes is still high," he said.
"At the moment, only 0.9% of our residential property is vacant, and that is very low."
Over the last 10 years, PKA has made an average annual profit on property of 11.3%, the organisation said.
In all, it said it has invested DKK12bn in Danish commercial and residential property manages more than 6,000 flats across the country.