PKA is investing in a project to redevelop the Copenhagen Wholesale Market into a new city district.

The Danish labour-market pensions administrator said it joined forces with housing developer FB Gruppen to buy the plot in Valby, in the south west of Copenhagen.

The planned project – New Valby – is worth at least DKK5bn (€670m) and will include 2,000 residential units and a park.

Nikolaj Stampe, head of property at PKA, said: “PKA already has a good working relationship with FB Group, and New Valby is an exciting project with great prospects.”

He said PKA, in sealing this agreement, was helping to address the challenges of homelessness in Copenhagen and ensure good, stable returns on its members’ pensions.

PKA runs three pension funds in the health and social care sectors, managing around DKK235bn.

The 160,000sqm Copenhagen Wholesale Market (Grønttorvet) is a major trading point for vegetables, fruit and flowers.

The market itself is moving to the Høje-Taastrup area of the city in April.

The site, which covers an area as big as 22 football pitches, has been sold to PKA and FB Gruppen by the owner of the market, a cooperative of the greengrocers themselves.

No one at PKA was immediately available to give precise financial details of the deal.

It said the development, which would create total building space of 240,000sqm, would take place over the next 4-5 years, and the resulting area would house 4,000 inhabitants, with shops, childcare facilities and a park.

Some of the buildings have been pre-purchased by PKA, and it is also providing financing for other buildings that FB Gruppen is to develop and later re-sell, either as owner-occupied or rental housing. 

The remaining land will be sold to other parties, such as pension funds or developers.

In the development project, PKA said it and FB Gruppen would be carrying out the plans already devised by the Copenhagen Wholesale Market in conjunction with Valby’s local council and the design studio Polyform.

PKA has around DKK16.5bn invested in Danish property and some DKK2.5bn in real estate assets abroad.