EUROPE – Denmark’s AP Pension is selling five properties to adjust its overall real estate allocation in the wake of last year’s merger with FSP Pension, clinching deals giving the company gains of 10% in one year.
The five buildings in Copenhagen and Aalborg have been sold for DKK820m (€110m), the commercial pension provider said.

Steen Jørgensen, director of AP Pension and former head of FSP Pension, said: “The five buildings, which were part of the FSP Pension property portfolio, were booked during the merger with AP Pension in 2012 with a value of around DKK750m.”

AP Pension said property prices had risen as a result of investors seeking alternatives to bonds.

It said more and more investors were now leaving the bond market, and big investors – including pension funds – did not expect 2013 to be a good year for bonds.

People were looking for investments that could produce a stable return, match the return of bonds and that were at the low end of the risk scale, it said.

AP Pension said it was adjusting investment assets to conform to its joint future strategy, following last year’s merger.

The property allocation has been set at 10-15%, which means FSP’s property portfolio has to be brought to the same proportion of total assets as AP Pension, the company said.

The properties sold are Blegdamsgården and Nordlyset in the Østerbro district of Copenhagen, Applebys Plads in Christianshavn in Copenhagen, Hvidts Gaard on the harbour-front in Aalborg and Dronningens Vænge in Kongens Lyngby.

All together, the properties had 33,000 square meters of space.

Meanwhile, Swedish buffer fund AP6 said it sold all shares in auto supplier Gnotec after making an annual return of at least 20% on the investment.

The company has been sold to Austria’s Frauenthal Group for a fixed purchase price of SEK210m (€25m).

The deal includes an option for AP6 to receive an extra SEK60m based on Gnotec’s earnings in 2013 and 2014.

The sale represents an average annual rate of return on the investment of at least 20%, AP6 said.

Mats Lindahl, head of business investment, said: “Gnotec performed very well during our ownership. The company has a strong market position and good profitability.”

Gnotec makes complex sheet metal parts, mainly for the car and lorry industry, and employs about 400 people.

In 2012, the group had SEK664m in sales and operating profit of SEK52m.

AP6 bought Gnotec in December 2007.

The sale is subject to approval by competition authorities, and the deal is expected to be completed in the second quarter.

Financial adviser to AP6 on the deal was KPMG Corporate Finance; Vinge was the legal adviser.

In other Nordic news, Sweden’s SPP is selling municipal pensions unit SPP Liv Pensionstjänst AB to Norway’s KPA Pension, in a move that lightens the seller’s capital requirements.

Under the deal, the administration associated with SPP’s municipal customers will be transferred to KPA Pension, said Norway’s Storebrand, which owns the savings and insurance institution SPP.

The deal also includes the transfer of around NOK1.2bn (€160m) from SPP’s guaranteed portfolios to KPA Pension, Storebrand said.

The agreement would strengthen SPP’s solvency position through reduced capital requirements, it said.

The agreement is subject to regulatory approval.

If granted, Storebrand said it would add around NOK100m to SPP’s profits, with this effect booked in the second quarter of this year.

“The resulting impact is a combination of low booked values of the shares for SPP Liv Pensionstjänst AB and the release of reserves,” it said.

The purchase price has not been disclosed.