PKA is investing DKK4.2bn (€565m) in Carlsberg City, the huge development of the former brewery site into a residential district of Copenhagen, via a new loan-financing facility.
The credit line will give the company owning the project enough funding to complete the largest stage of the build, it said.
This new financing deal comes on the heels of the DKK250bn pension provider’s previous loan investment in April 2015, when it made DKK2.4bn available to Carlsberg City (Carlsberg Byen) — which is the name of the owning company, as well as the development itself.
Nikolaj Stampe, head of real estate at PKA, which runs three labour-market pension funds, said: “The construction and sale of the first stage is going very well, and we are very confident Carlsberg City will continue this good trend.
“Therefore, we can give a new financing facility for the next construction phase so that this historic area can carry on with its transformation into a dynamic city quarter for the benefit of residents and Copenhagen.”
Stampe stressed that the financing agreement was an attractive way for PKA to spread its investment risk, while at the same time the loan was an investment with a high level of security.
Under the terms of the agreement, Carlsberg Byen can draw on the credit line as needed, with the facility expiring at the end of 2022.
The loan is secured in the same way as the recently announced credit line PKA made available to the developer of the Enghave Brygge residential project, announced last month, a spokesman for PKA said.
The loan is backed by mortgage security in the project, and PKA could take possession of the project if it were to file for bankruptcy.
PKA said the new credit line would secure financing for the building of the next 200,000sqm or more of space on the old brewery site, which has recently been granted planning approval from Copenhagen City Council.
The financing will fund the building of four tower blocks of apartments, offices, restaurants and cafes, as well as facilitate the restoration of historical buildings so they can be used for cultural activities, PKA said.
Jens Nyhus, chief executive of Carlsberg City, said the cooperation with PKA up to now had already been very positive, and that the company was very pleased the pensions provider had chosen to make more financing available.
Carlsberg City is owned by Carlsberg, PFA, Topdanmark and PenSam.