AP Pension makes equity, debt investment in Copenhagen island homes

AP Pension, the DKK104bn (€14bn) Danish commercial mutual pensions firm, is investing DKK1.4bn in equity and debt in part of a Copenhagen residential development.

The scheme will be built on a series of artificial islands to the south west of the Danish capital.

Under the terms of a deal agreed with developer NPV, AP Pension will provide a combination of equity and loan financing for three of the total 11 artificial islands that make up the whole Enghave Brygge waterfront development.

Peter Olsson, director of AP Pension’s property arm, AP Ejendomme, said: “At AP Pension, we have an ambition to take part in property-development projects right from the start.

“We are slightly different from our competitors in this respect because we believe it pays to be involved from a very early stage and not simply to take over a finished project.”

Both AP Pension and NPV said the cooperation over the financing deal was a first step that could be extended in the future to encompass other projects.

The islands involved in the deal between AP Pension and NPV are the three that lie closest to the city centre.

The agreement involves AP Pension investing equity capital in the first island and its development into 21,679sqm of space equating to 250 rental apartments, and becoming the owner of the island and property on it once the work is finished.

AP Pension will provide loan capital to NPV to finance the development of two further neighbouring islands, on which 47,000sqm of apartments for sale are being built, with NPV providing a significant share of the total investment needed, in the form of equity capital.

The first two of these three islands to be completed are expected to be ready in 2019-20.

Jens Schaumann, director of NPV, said his company had now secured full financing for all six of the firm’s residential property islands in Enghave Brygge.

In December, Danish labour-market pensions provider PKA announced a DKK1.2bn debt financing deal with NPV for the developer’s other three islands in Enghave Brygge.

NPV said the financing agreement with AP Pension had allowed it to buy out its former partner in the Enghave Brygge project, Dubai-based entrepreneur Khaldoun Tabari, at the end of 2016.