PKA is providing long-term financing for real estate developer A Enggaard to build 1,200 apartments in the Danish city of Aarhus.
Denmark’s PKA, which runs three labour-market pension funds, has signed an agreement with the privately-owned firm for equal share in the new partnership.
Initially, the partnership will invest in residential projects in the Aarhus districts of Skejby and Brabrand as well as on the site of the former Ceres Brewery in the city.
A Enggaard is in the process of developing 1,200 apartments on these three sites, PKA said.
Nikolaj Stampe, head of real estate at PKA, said: ”The agreement makes the most of the synergy that exists between A Enggaard’s skills as a recognised project developer and building contractor and PKA’s financial strength.”
PKA saw many advantages in the cooperation, he said.
“We are securing a long-term return for our members’ pensions through high-quality construction that is exciting and functional,” Stampe said.
PKA said it had already worked with A Enggaard on two construction projects in Jutland — City Campus at Aalborg University, and the Sundhedshuset healthcare centre in Vejle — involving investments of DKK450m (€60.3m) and DKK270m, respectively.
PKA did not disclose the value of the financing deal for the 1,200 apartments in Aarhus.
But it said the agreement on long-term strategic cooperation involved A Enggaard committing to develop and manage the projects while the pension funds under PKA would supply construction financing until the properties were ready for use, as well as final financing.
Meanwhile, PensionDanmark is investing DKK190m in constructing a new building for the national police, in a deal it says will provide a stable long-term return.
The labour-market pension fund, which already has more than DKK12bn invested in Danish property, will act as investor and building owner in the project to build a 10,000sqm, three-storey addition to the existing national police building in Glostrup — a Copenhagen suburb.
PensionDanmark already owns the existing 15,000sqm building and has the option of building another 13,000sqm of floor space on the plot, in addition to the planned 10,000sqm building.
The new building will house the police’s national crime technology centre and its national cyber-crime centre, the pension fund said.
Torben Möger Pedersen, PensionDanmark’s chief executive, said: “In the national police, we have a solid tenant, with whom we have had a good working relationship over a number of years.”
He said the pension fund expected the investment to produce a good, stable return over many years.
The building would be ready for occupation in December 2016 and carry a DGNB silver certificate for sustainability.
PensionDanmark has said it plans to invest around DKK2bn a year in Danish real estate.