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Real estate roundup: ATP, PensionDanmark

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  • Real estate roundup: ATP, PensionDanmark

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DENMARK - Denmark's largest pension fund ATP has made its first direct real estate acquisition in two years, acquiring a high-profile office block in central Copenhagen.

It is the first time the building, which is located on HC Andersen's Boulevard 2 and is let to the Danish government, has changed hands since 1920.

Michael Nielsen, managing director at ATP Ejendomme, said: "With this acquisition, we have secured a prominent as well as an eye-catching and flexible property that fits very well into our existing portfolio of high-profile properties in Copenhagen."

The deal is significant given that ATP has not made any new investments in its domestic market for more than 24 months due to the lack of opportunities to buy high-quality, core assets at sufficiently low prices.

"We have been rather passive on the investment side here in Denmark mainly due to the fact there have been only a very few interesting transactions in the market with the risk profile we normally prefer," Nielsen said.

He added that it was difficult to justify investing when initial yields in Copenhagen were around 5-5.5%, which looked expensive when compared with those of the larger markets of London and Paris.

"We see an increasing number of transactions coming to the market, but for us it is still a question of pricing and quality," he said.

ATP is also close to signing off on commitments to three core US real estate funds, following a 12-month due diligence process.

The pension fund, which is invested in 30 non-listed real estate funds across Europe and the US through its indirect property arm ATP Real Estate, is keen to increase its exposure to the latter.

"Our focus has been to line up money to invest in the bottom of the price cycle for core assets in the US, so we have identified three hopefully first-class managers to deal with this for us over there," Nielsen added.

ATP is advised by The Townsend Group for its indirect investments in the US and already has commitments to four funds, including two vehicles managed by LaSalle Investment Management: €52m to the LaSalle Income & Growth Fund V and €70m to the LaSalle Property Fund.

The pension fund has also committed €54m to CB Richard Ellis Investors' Strategic Partners US Value Added Fund 5, and €54m to Goldman Sachs' Real Estate Mezzanine Partners.

ATP could not disclose the identity of the three new funds.

In other news, labour market fund PensionDanmark is expanding its portfolio of domestic real estate with a new DKK500mn (€67m) investment in Århus.

The latest addition brings the DKK88.3bn provider's allocation to domestic property to 6% of total assets.

Torben Möger Pedersen, managing director of PensionDanmark, said: "It is a significant expansion of our investments in property, which will secure a good, safe return for members."

The development, called Isbjerget, is to be located in the harbour of Århus, Denmark's second largest city, and will consist of 210 residential units.

With this new investment, PensionDanmark will have invested a total of DKK6bn in Danish property - corresponding to a roughly 6% of members' savings, fund officials said.

The agreement between Århus Council, which is selling the land, and PensionDanmark, as the purchaser and property owner, will give the city's residents "world-class architecture, with homes right on the waterfront", they added.

Construction is expected to be completed in March 2013.

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  • QN-2546

    Asset class: Real Estate Equity Fund (non listed).
    Asset region: Europe.
    Size: Total CHF 600m, approx. CHF 100-300m per fund investment.
    Closing date: 2019-06-28.

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