DENMARK - DIP, the DKK24bn (€3.22bn) pension fund for Danish engineers, has sold a €65m commercial property portfolio to Aberdeen Property Investors and taken a stake in its Danish fund as part of a shift in its investment strategy.
Søren Kolbye Sørensen, chief executive of the DIP fund, said the move to sell some of its direct holdings earlier this year on 1 January is in part to diversify its current 9% allocation to real estate asset holdings as well as tap Aberdeen's active management skills.
More specifically, the fund will receive 60% of the fund's value as cash while the remaining 40% will be held as shares in the Aberdeen Property Fund Denmark P/S, giving DIP a major shareholding in the fund.
"Looking forward, DIP's investment strategy will involve allocating 6-10% of total assets under management to property," said Kolbye Sørensen.
"We believe that property as an asset class in the future will ensure our members good pensions, also in the event of increasing inflation," he added.
In total seven offices properties with floor space of 40,000 sq. m have been sold to Aberdeen, to give an initial net yield of 6%.
The deal is seen as having a low tenant risk as the majority of income comes from public tenants.
While the deal reveals some of the pension fund's strategy on real estate investment, the DIP fund appears to have lost approximately €480m in value since 2007, when the fund was worth €3.7bn, and a return on assets statement dated 10 December 2008 suggested the fund had lost over 11% since the beginning of the year, before tax.
At that time, the fund's allocation to "real estate etc" was 11%, and the asset category had returned 0.5%.
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