Industriens enters joint Danish pension fund bid to build army barracks

A joint bid by Danish pension funds for a government contract to deliver new army accommodation has attracted a fourth pension fund.

Industriens Pension announced yesterday it was now joining the consortium, which it said was ready to realise a nationwide project to expand the Danish armed forces’ barracks via a public-private partnership (PPP).

Søren Tang Kristensen, head of real estate at the DKK255bn (€34bn) labour-market pension fund, said: “As a pension company, we have good experience with the PPP model, and we see it as a clear strength that we can combine private capital with societal needs.”

“It’s also an advantage that the consortium represents many Danish employees, and we hope that a long-term commitment can be established that supports the work of the armed forces for many years to come,” he said.

The consortium was initiated earlier this year by AP Pension, to form a new PPP to bid for the project, against the background of Denmark’s efforts to ramp up its defence capabilities to counter heightened geopolitical threats.

At the end of April, AkademikerPension said it would add its name to the bid, with pension fund P+ then joining in early May.

Peter Olsson, chief executive officer of AP Pension’s real estate unit, AP Ejendomme, said yesterday it made perfect sense for the pension funds, as investors, to contribute to solving a “highly topical and urgent societal task” with new barracks.

“At the same time, we see a sensible investment basis, and it’s very positive that Industriens Pension is joining the circle of investors who share these views,” he said.

Industriens Pension said the amount of capital it and the other parties would provide would only be finally decided later, but that the consortium’s total investment framework was expected to end up amounting to billions of kroner.

The other three pension funds have previously said they would each be investing a nine-digit sum in Danish kroner.

A spokesman for AkademikerPension told IPE it could not give a more precise figure yet, since it was still uncertain whether the project would actually happen, depending as it did on the Danish politicians to give it the green light.

In practical terms, the pension fund consortium is proposing a modularised construction process for the new army barracks, whereby the buildings would be produced in a factory before being transported to the construction site to be stacked and assembled, Industriens Pension said.

This method made it possible to build the new barracks quickly and efficiently with a lower CO2 footprint than with traditional concrete construction, it said.

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