Danish pension funds ATP and PensionDanmark have joined forces to buy the historic building in central Copenhagen that houses the Magasin department store.

In the deal, PensionDanmark and ATP’s property arm ATP Real Estate bought the property on Kongens Nytorv in the Danish capital from Solstra Investments, with each pension fund taking a 50% stake.

The two investors already own the three Magasin properties in Lyngby, Odense and Aarhus, and described the Copenhagen deal as a natural continuation of their current activities.

Michael Nielsen, chief executive of ATP Real Estate, said: “We are very content with this investment, which is perfectly in line with our focus on large investments, long leases and secure returns.”

ATP Real Estate was familiar with the tenant from its previous investments and looking forward to continuing that co-operation, he said.

Magasin is part of the UK-listed Debenhams retail group.

Torben Möger Pedersen, chief executive of labour-market fund PensionDanmark, said the investment was part of a strategy to invest in commercial properties on prime locations with solid tenants and long leases.

“The members can look forward to good returns on the investment, which is in accordance with our plan to have approximately 10% of PensionDanmark’s assets allocated to real estate,” he said.

The property itself dates back to 1677, but has since been developed and renovated.

The Magasin department store has been operating in the property since 1870.

ATP Real Estate will administer the property, as it does for the other three Magasin properties owned by the investors.

The parties did not disclose the price of the deal.

In other news, pensions company Unipension said its new property strategy to shift bricks-and-mortar assets into global funds was on track, with 14 properties having been provisionally sold for a total of DKK1.28bn (€171m)

Unipension, which runs three professional pension funds in Denmark, announced a change of strategy in March 2013 for real estate.

It planned to sell its direct property holdings — mostly Danish residential and commercial buildings – and invest instead in global equities funds, starting with Europe and the US.

The new strategy is aimed at achieving a higher long-term return and better spread of risk.

Real estate allocations in all three pension funds will be brought to a level of 5%.

Before the switch, the Architects’ pension fund had 11% of assets in property, MP Pension had 6% and the Pension Fund for Agricultural Academics and Veterinary Surgeons (PJD) had 1%.

Unipension said it had set up a common fund for the three pension funds to hold the Danish properties, called Unipension Ejendomme, which was being managed by property company DEAS.

The fund had taken over seven well-located core properties in and around Copenhagen that had previously been owned by MP Pension.

“The work to implement the real estate strategy is going according to plan, and there is generally a good level of interest from potential buyers, and we have obtained sales prices above valuations,” Unipension said.

Interest has been particularly strong for residential properties and centrally located commercial buildings, it said.