PensionDanmark is investing DKK2bn (€268m) in a large development project in Denmark’s second largest city, Aarhus, building residential and commercial properties.

The DKK233bn labour-market pension fund said it has bought a 36,000sqm plot from Ferguson Nordic Holdings Aps, where it aims to create “a new sustainable and attractive city quarter” around Daugbjergvej.

PensionDanmark has formed a partnership with developer CASA to carry out the work, which will be done in close cooperation with the municipality of Aarhus, it said.

The land, which currently houses the administrative offices of the seller, as well as two building supplies outlets, is to be used to construct 70,000sqm of new homes and commercial buildings as part of the new local plan.

Torben Möger Pedersen, chief executive of PensionDanmark, said: “The solid population growth in Aarhus is leading to demand for attractive city space with homes and commercial rental properties that create value, and are well-located.”