REAL ESTATE - Danica Pension, Denmark’s largest life insurer, is to freeze its real estate holdings after announcing plans to increase its equity holdings from 16% to 20%-25%.

The A+ rated insurer, which invests primarily in the Danish market, is currently 8% invested in real estate and “would remain at that level”, according to Danica Pension chief consultant Jens Dahlgard.

Danica reported a return on its real estate holdings for 2005 of 11.6%, up from 8.9% the previous year.

Despite house-price increases in 2005, Dahlgard said the fund had no immediate plans to increase its allocation to residential property. Housing currently makes up 10% of the real estate portfolio, compared with 40% office property and 50% retail. Danica is Denmark’s largest owner of supermarkets.

“We’re looking at the market to see whether housing is attractive to invest more in or not,” said Dahlgard. The current return on residential property is significantly lower than that on commercial property.

He added that Danica was “still optimistic” about real estate, adding that any changes in allocation “would have to be within the framework of keeping a fair share in real estate”.