Danish labour-market pension fund AkademikerPension has announced a new real estate strategy that will see it more than triple property assets in the next three to four years, with its exposure to residential set to surge.

The pension fund, which had group assets of DKK178bn (€23.9bn) at the end of 2021, said that under the new strategy, its property portfolio, which makes up between 4% and 5% of the overall portfolio now, will amount to 7% to 8% of total assets in 2026.

In absolute terms, it said real estate investments would increase from DKK2bn currently to DKK7bn in 2026 

Søren Møller-Larsson, head of real estate at the pension fund, said: “It’s a rather ambitious plan; we have set ourselves a significant growth target, so we’ll have to be a lot more active than we have been in the past.”

AkademikerPension, which lies in the North Copenhagen suburb of Gentofte, said the aim was to have more properties in the portfolio and to spread these investments more widely in terms of sector as well as geography within Denmark.

“And with rental properties, we are guaranteed a stable income over a long period,” the pension fund said.

While AkademikerPension’s real estate assets currently consist mainly of offices in Copenhagen, by 2026 the sector distribution is to be 50% residential, 30% offices and also include a range of construction projects, the fund said.

In its future real estate portfolio, most investments are to be located in Copenhagen and Aarhus, with approximately 25% of investments located in smaller Danish cities, the pension fund said.

“We are a small team, so firstly, we don’t have the resources to look at too many markets,”  Møller-Larsson said, adding: “Secondly, we believe that the two largest cities we have here at home will continue to grow.”

In further details published by the pension fund on its new real estate strategy, AkademikerPension said 75% of the portfolio assets would be located in the capital city, and 25% in the second-largest city of Aarhus, and that there would be more and better CO2 data on the portfolio.

It said it had “great interest” in partnerships with investors, craftsmen and operating partners, as well as a “desire to build an ecosystem of value-driven partners”.

To read the latest edition of the latest IPE Real Assets magazine click here.

Topics