Two of Denmark’s largest pension funds have traded a half-stake in a DKK13.8bn (€1.85bn) portfolio of domestic shopping centres.
ATP has paid Danica just under DKK7bn for the interest in the 16 shopping centres.
The two pension funds are establishing a joint venture to co-own the properties.
Michael Nielsen, chief executive of ATP Real Estate, said: “We are very pleased to be able to add this significant investment to our property portfolio.”
He said the investment supported the statutory pension fund’s aim of creating a long-term, stable return and solid diversification of risk.
“Together with Danica, we will improve the shopping centres’ position in the Danish market and maintain their attractiveness for both customers and tenants, while following the new trends in retail, where internet trade plays an increasing role,” Nielsen said. Shopping centres are would increasingly become “experience centres”, he said.
André Scharf, chief executive of Danica Ejendomme, told IPE Real Assets that Danica sought the cooperation with ATP to solve the problem of carrying too much exposure to shopping centres on its balance sheet.
“Shopping centres are properties that require constant investment, and there is a limit as to how much of this type of investment we can accumulate on our balance sheet,” he said.
The deal has halved the amount the pension provider holds in the shopping centre sector.
“We are rebalancing our exposure to shopping centres within Danica’a portfolio, and bringing it down to 33% from 60%,” he said.
The alternative to forming a partnership with another investor would have been to sell individual shopping centres, he said. “But we are doing this in such a way that the shopping centre platform stays intact, which means we retain the ability to grow and expand it, so I think it is a win-win situation.”
Schart said the cooperation had the twin benefits of providing more capital to invest and the property management expertise of ATP.
The shopping centres in the portfolio, which Danica has held for many years, are located around Denmark, although the bulk of them are in the Greater Copenhagen area.
They have combined space of around 400,000sqm and 1,100 rental units.
Development work is currently going on in many of the centres with a total value of almost DKK1bn, ATP said.
The transaction is subject to approval by competition authorities.