Finnish pensions insurance company Varma is investing in the construction of a headquarters for the K-Group, the group name for the listed retailer Kesko, in Helsinki.

The development will be built as an office campus on a plot of land already owned by Varma in Helsinki’s fishing port district.

The property, for about 1,700 staff, will have floor space of around 27,000sqm and a carpark with about 200 spaces.

Building work is scheduled to start in January 2017 and be completed in 2019.

It said it would build an additional 7,000sqm of flexible office space for other users next to the Kesko campus.

Varma’s investment director Ilkka Tomperi, in charge of real estate at the €41.1bn pensions insurance company, said: “We are pleased we can continue our long-standing relationship with Kesko with the new headquarters.”

The fishing harbour area will be developed into a strong area for business, trade and housing right next to the city centre, he said.

Tomperi declined to say how much the investment would cost but told IPE the office development was one of the largest in the country.

At 34,000sqm, the total office space involved will be more than one-third of the 90,000sqm of new office space already under development in the Helsinki region this spring, according to figures from property data provider KTI, Tomperi said.

“We have signed a long-term lease contract with Kesko, and this is a solid core investment for us, with a stable and secure return,” he told IPE.

He said the project was part of Varma’s direct domestic investments, focusing on the Helsinki region in large institutional assets providing stable long-term cash flows that are located in attractive areas with excellent public communications.

Varma invests in direct and indirect real estate, domestically and internationally.

“Indirectly, we also invest in more value-add and opportunistic properties with strong partners mostly outside Finland,” Tomperi said.

In recent years, Varma has been actively refining its direct property portfolio by disposing its industrial and logistics assets to Certeum – now Logicor – and forming retail joint-venture Serena Properties with Swedish Ratos built around a portfolio of Varma’s out-of-town retail assets.

The new Kesko office building, when finished, will apply for “very good” BREEAM environmental certification.

As part of the deal, Varma said it has bought Kesko’s former office building in the Katajanokka district of the capital, which will be rebuilt to provide housing and other facilities.