Norway's KLP seals EUR 170m purchase in Copenhagen

The Danish arm of Norwegian real estate group KLP Eiendom has snapped up the massive TDC office complex at Teglholmsgade in the South Harbour of Copenhagen for DKK 1.26 bn (EUR 170 mln). The deal - the largest property transaction clinched in Denmark so far in 2011 - reflects a net yield of 5.7%.

'We have long been an investor in shopping centres, hotels and office properties in Denmark and we wanted to consolidate our position in the market,' Gunnar Gjørtz, CEO of KLP Eiendom, told PropertyEU in an interview. 'We were looking for opportunities allowing us to implement our investment strategy focused on city centre assets with good quality tenants. The TDC scheme well responded to these requirements,' he added.

KLP Eidendom is active in Norway, Sweden and Denmark. Headquartered in Oslo, the company is the real estate arm of the KLP life insurance and pension fund and currently owns over 1.5 million m² of commercial real estate valued at EUR 3.6 bn. 'We are backed by an equity partner and therefore the purchase was closed 100% in equity,' Gjørtz added.

The vendor is the pension fund of Denmark's provider of communications solutions TDC, which will continue to occupy the entire complex as its headquarters through 2030. The disposal by the institutional investor is in line with it strategy to diversify its property portfolio and re-invest the proceeds in a number of smaller assets.

'The Danish office market has been challenging in the past months and we believe this allows us to acquire prime offices at a reasonable price,' Gjørtz concluded, adding that the TDC scheme offers development potential which will be taken advantage of in the next 10 years.

The TDC scheme offers a total of 81,000 m² and generates an annual rental income of DKK 72 mln. The complex consists of 17 buildings built between 1988 and 2009.