Danish pensions heavyweights ATP and Danica Pension are joining forces to co-own a 66,000sqm office building in central Copenhagen, as Danica agrees to sell half of the property – once it has been developed – to ATP.
The finished building will be worth DKK3bn (€403m) and form around 50% of the eventual real estate asset Danica Pension develops on the plot where the city’s main postal services buildings now stands.
Michael Nielsen, chief executive at ATP Real Estate, said: “We are very pleased to become a part of an exciting project. This is an investment that fits in well with our strategy aimed at having long-term, stable cash flows.”
Danica Pension – a subsidiary of Danske Bank and Denmark’s second-largest commercial pensions provider – bought the entire asset from logistics firm PostNord in March 2015 for DKK925m and said it would invest around DKK5bn in the planned development overall.
It plans to develop the land into a new quarter of the city over the next few years, with space for homes, offices, cafes and shops.
At the time of the purchase last year, Danica Pension said it expected to develop the project in conjunction with BlackRock, one of the financial partners it has worked with.
However, Peter Mering, director of Danica Ejendomme (real estate), told IPE this cooperation was no longer on the cards.
Asked why Danica Pension chose ATP as its partner in the investment, Mering said the DKK800bn statutory pension fund was a very large and knowledgeable real estate investor.
While the two pension funds can be rivals in the search for investment deals, he said: “We are friendly competitors, and sometimes we cooperate.”
Anders Svennesen, CIO of Danica Pension, said: “We will now work together further on the plans for the building, so we can make sure it becomes an attractive commercial rental asset, and that, at the same time, we achieve the best interplay between this building and the rest of the postal services plot.”
The office building is expected to be ready for occupation at the beginning of 2022, the investors said.
PostNord is still sub-leasing the office and logistics space it needs from Danica Pension under an agreement that runs until 2018, using the time to move to more suitable premises.
