Denmark’s PFA has announced three new real estate investments totalling DKK3.4bn (€455m) in French assets, marking its first foray into directly-held assets in the large European economy.
The DKK576bn pension provider is buying an office and residential property in Paris - for DKK1.9bn including a budget for capital expenditure - and is investing DKK750m each in two discretionary mandates - one for serviced senior housing and the other for logistics properties.
Michael Bruhn, PFA’s director of real estate, said: “Part of our investment strategy is to increase our real estate investment outside Denmark. And as part of that strategy, it has been natural to look for investment in France, which is among Europe’s largest and leading economies.”
The “historic” Paris property is located in the classically-built Square d’Orleans and has a total of around 13,700sqm of space, including some 5,500sqm of residential space and about 8,200sqm of office accommodation.
The asset is being renovated and remodelled over a long period, to be transformed into a “modern and inspiring co-working and co-living property”, PFA said.
Bruhn told IPE the pension fund had agreed not to disclose the name of the vendor.
All three investments fit PFA’s property portfolio perfectly, he said, which had now grown to about DKK35bn.
The serviced senior housing mandate has been awarded to La Française, and comprises a portfolio of around 1,300 homes.
All properties - which target the “independent seniors” group - are rented out to a professional operator who provides a range of services, PFA said.
The logistics mandate, meanwhile, is being managed by BMO and involves ongoing investments in logistics properties which are either already built and to be developed or are delivered in a completed state.
Geographically, the focus for the logistics properties is near city centres, ports and airports in well-established French logistics districts, and in cities such as Bordeaux, Lyon, Lille and Paris.
“The investments in France are all focused on megatrends,” Bruhn said.
The background to the senior housing mandate is that the number of older people over 75 was increasing sharply in France, PFA said, adding that the number of independent seniors, in particular, was growing significantly.
On the rationale for investing in logistics in the country, PFA said this sector was expected to experience continued growth locally with increased demand supported by increasing e-commerce.
“In addition, the French logistics market is characterised by a limited supply of modern and efficient logistics properties in particular,” it said.
In October, PFA’s chief executive Allan Polack said the pension fund was looking more towards foreign countries in the next few years for new real estate investments, including both Europe, Asia and the USA.