Labour-market pension fund PenSam is investing in the construction of another 128 rental flats on Marmormolen (Marble Quay) in the Danish capital, adding to the 128 apartments already underway in the project.

PenSam declined to say how much the deal was worth, but a spokesman said the ongoing return on the investment would be more than 10% a year.

Marmormolen is a quay in the Nordhavn (North Harbour) district of Copenhagen, best known as the location of the large FN Byen (UN City) development.

PenSam is the co-owner of the site and the development – called Marmorbyen (Marble City) – along with state authority By & Havn (City & Port).

It said the project was a good investment because of the healthy expected return, the investment diversification it added to the overall portfolio and the fact it reduced interest-rate sensitivity.

“It is an integral part of our overall investment strategy to reduce duration in our investment portfolio,” the pension fund’s spokesman said, adding that PenSam had begun implementing this strategy five years ago.

PenSam will remain as owner of the development after the construction phase, renting out the properties.

The development has been designed by Vilhelm Lauritzen Arkitekter, and NCC Construction Danmark is the developer.

Construction of the new flats is due to start in August 2015 and expected to be completed at the end of 2016.

The first phase of the overall construction of Marmorbyen is scheduled to be ready in the late summer of 2015.

The project will include four commercial rental properties and a hall.

Most of the apartments will have three or four rooms and an average size of 105 sqm.