PensionDanmark’s latest real estate transaction

PensionDanmark has invested in a retail and residential building in Lyngby to the north of the Danish capital Copenhagen.

The DKK222bn (€29.8bn) pension fund did not disclose the price of the deal.

The deal involved the purchase of 4,200 sqm of space from turnkey contractor KPC, along with long-term leases.

Torben Möger Pedersen, chief executive of PensionDanmark, said: “This is a very well-located property with retail areas on the ground floor and a basement car park that PensionDanmark is buying, and there will be homes built on the upper floors.”

He said the property would be rented out on long-term irrevocable leases, so the pension fund could look forward to a “solid and stable return for many years for the benefit of our members”.

KPC has agreed to sell the property on completion of the development, which is expected to happen in 2019.

The property will be leased by retail group Dansk Supermarked Ejendomme with an operator contract with Q-Park for the carpark, while the residential units will be leased to public housing association Lyngby Almene Boligselskab.

Bergen pension fund doubles annual return

Meanwhile, Bergen Kommunale Pensjonskasse (BKP) – the pension fund for the south-west Norwegian municipality – released annual figures showing it doubled its investment return last year to 7.2%, from 3.3% in 2015.

The pension fund said: “For several years, our asset management has delivered a return far above the risk-free return, and this means we are well equipped to cope with volatile markets in the future.”

BKP has a long-term goal of an annual 5.5% return.

The pension fund said its strategy had functioned well under prevailing market conditions and that the long-term target was realistic.

BKP’s equity capital rose by NOK111m (€12.1m) over the course of 2016 to end the year at NOK1.38bn, and total assets stood at NOK15.30bn.

Finnish pension funds add 4.2%

In other news, Finnish pensions alliance TELA said earnings-related pension assets in the country grew by €7.6bn last year.

This marked a rise of 4.2%, to €188.5bn in total at the end of the year. 

Peter Halonen, analyst at TELA, said: “Financial markets recovered surprisingly well, especially after the political surprises and other uncertainty factors experienced during the year.”

In the last quarter of 2016, the best returns were obtained from the equity market, he said.

At the end of the year, €95.2bn of earnings-related pension assets were invested in equities, equating to 50.5% of overall assets – the first time equities had reached more than half of total assets, Halonen said.

Fixed income investments accounted for about €77.8bn or 41.2%, while real estate investments made up around €15.4bn or 8.2%, the data showed. 

“The volume of pension assets indicates that Finland has prepared well for population ageing and rising pension expenditure,” Halonen said.