Nordea Life & Pensions and Danish labour-market pensions provider PenSam said they are co-investing DKK2.7bn (€362m) in a 120,000m2 Copenhagen residential project. 

The two pension fund investors said they were jointly financing a project to build a new quarter in the Sydhavn area of the Danish capital.

Nordea Life & Pensions, which bought the land for the project several years ago, has now sold a 25% stake in the Frederiks Brygge project to PenSam.

Anders Schelde, investment director at Nordea Life & Pensions, said: “PenSam is a strong partner, that, apart from capital, will contribute expertise and experience to the the project.

“With this partial sale, Nordea Life & Pensions is getting better long-term diversification of its real estate investments.”

Benny Buchardt Andersen, PenSam’s investment director, said: “We expect the project to give a solid return to our customers because, among other things, together we are handling the whole value chain in the construction.”

The plan is to build 1,350 apartments, typically with three rooms and 85m2 in size.

The entire construction will have 120,000m2 of space, Andersen said.

The first stage of the project was completed last year with 69 homes for young people and a daycare centre.

A further 194 homes and two supermarket buildings are expected to be finished by mid-2016.

The Danish government and the Copenhagen City Council have begun talks on establishing a metro line to Sydhavn, which is expected to be completed by 2023, the investors said.