DENMARK - ATP Real Estate, the property arm of Denmark's DKK350bn (€46.9bn) labour market supplementary fund, is investing DKK700m in a "ground-breaking" office block development in Copenhagen's harbour area.
"We are building a striking and fascinating building, which may also be ground-breaking in Denmark because it is a tower block up to 140 metres high," said Christian Hartmann, head of ATP Real Estate's project department.
Michael Nielsen, chief executive of ATP Real Estate, told IPE the organisation had just agreed to terms on the project, which will involve investment of DKK700m.
Including the land already owned by ATP Real Estate, the development will be built on to give a project valued at between DKK800m and DKK900m, he said.
The development, which will provide 40,000m2 of office space, will involve a warehouse-style office building and twin tower blocks on both sides of a stretch of water in a key area in the Copenhagen harbour, with the towers being joined by a 65-meter-high bridge.
Images produced so far on the development of Langelinie and Marmormolen are only a master plan, Nielsen explains, and the project's final architects have yet to be appointed. (Click images shown right, and below for enhanced view)
"We decided we would run an architects' competition to identify the best project for that site," he said. That competition will take place this summer.
ATP Real Estate owns the land on one side of the water, and the harbour authorities own the site on the other side.
"We have to do it in cooperation with the harbour authorities," said Nielsen. "We have reached this preliminary agreement to develop our side with 40,000m2, and to link it to the other side."
At least 30,000m2 of the office space has already been earmarked by future tenants as Nielsen said: "We have had letters of intent from two larger tenants".
One of these is the Danish law firm Bech-Bruun, he said, though he declined to identify the other.
Offices will not be ready for use for two to three years. But Nielsen is confident about finding tenants for the remaining quarter of the space.
"We don't see it as a problem; starting with such a great location and with the first tenants in place it would be rather easy to find other tenants," he said. "We are willing to take that risk."
Though there is no projected yield at the moment, Nielsen estimates the initial return could be 6%, but cautioned there were many factors still undecided.
"As a pension fund, we are absolutely focussed on what type of return we get. It has to be a good balance with our investment," he said.