Danish pension funds Lægernes Pension, DIP, JØP and Nordea Liv & Pension have committed DKK1bn (€134m) to invest in residential and commercial property in Denmark’s second largest city Aarhus via a new fund.

The pension funds have pledged the investment capital to a newly established real estate fund set up by Nordea Ejendomme (Nordea Real Estate).

Henrik Steenstrup, deputy managing director at Nordea Ejendomme, said: “We are glad and proud to have the backing of highly qualified investors and are looking forward to working with them.”

Nordea Ejendomme said the DKK1bn was a preliminary amount and that it could be increased over time if the opportunities that were expected materialised.

Steenstrup said that, with its seven staff members in Aarhus, the firm had a solid footing there, which gave it a good start in exploiting potential investments in the city.

“Our approach is based on active management with the aim of long-term value growth,” he said.

“The capital and the mandate is there, so we now have all sails set to find the right investment properties, and we already have a couple of interesting prospects in the pipeline.”

Lægernes Pension and Nordea Liv & Pension have previously undertaken joint property investments together, and the establishment of the new fund represents a broadening of that cooperation to include DIP and JØP, Nordea Ejendomme said.

Lægernes Pension is the pension fund for Danish doctors, DIP is a pension fund for engineers, and JØP runs pensions for lawyers and economists.

Nordea Liv & Pension is the Danish life and pensions arm of Nordic banking group Nordea.

Back in April, Danish labour-market pension fund PensionDanmark announced it was making its first direct investment in Aarhus, buying two office properties for DKK555m as part of its efforts to diversify its commercial property portfolio.

Even though Aarhus is the second-biggest city in Denmark, its urban population is less than one-quarter the size of the capital city, with 265,000 inhabitants compared with Copenhagen’s 1.2m.