PKA, which runs three Danish labour-market pension funds in the social and healthcare sector, is providing DKK1.2bn (€161m) in debt financing for a waterside residential development in Copenhagen.

The DKK250bn pensions institution said the financing deal would allow work on the development in the Enghave Brygge district in Copenhagen’s Sydhavn area — which already had received planning permission — to go ahead.

The construction project includes the creation of around 430 apartments and 40 terraced houses, many of which are already pre-sold.

Nikolaj Stampe, head of real estate at PKA, said the financing agreement ensured an attractive return for the members of its pension schemes, and the fact that some of the homes had already been sold at the project stage provided good assurance for the construction.

PKA said the credit line it was supplying was backed by mortgage security in the residential property as well as security in the company behind the property. 

The project PKA is financing will result in 50,500sqm of space and is located on the island group known as Engholmene, which is part of a wider development on Enghave Brygge.

PKA’s housing project is being developed by NPV, which is part of Gribskov Group, with NREP as capital partner.

It is to be built on three of 11 new landscaped artificial islands of the larger Enghave Brygge development, which is expected to be fully developed in eight to 10 years’ time, at which point it will include around 2,600 homes.

“PKA’s involvement is limited to being a source of financing during the construction, while NPV will undertake the development and sale of homes,” PKA said.

Stampe said that the great migration to Copenhagen made it necessary to develop new parts of the city and create recreation areas.

“With the loan, we are involved in realising a unique residential project in a good location, in redeveloping Sydhavn and building homes for the many newcomers,” he said.

PKA currently has around DKK17.8bn invested in Danish real estate and about DKK2.6bn in property assets abroad.