EUROPE - Saxo Properties - the property investment arm of Denmark's Saxo Bank - has agreed to a €250m joint venture with UK real estate investor Resolution Real Estate Advisers (Resolution Property) to invest in residential properties in Denmark.
The joint venture, which will focus on residential and commercial buildings in the centre of Copenhagen, will last 3-5 years and target value-add investments.
The companies said it had the potential to offer both private equity and pension fund investors a "large pipeline of opportunities".
Saxo Properties and Resolution Property will invest mainly in assets in need of intensive management to generate above-average returns from re-sales, with 70% being dedicated to residential properties. They are now targeting first purchases.
Jesper Damborg, chief executive of Saxo Properties, told IP Real Estate: "After the financial crisis in 2008, we have seen prices going down between 32% to 50% in Copenhagen.
"This has created a large pipeline of opportunities for both local and foreign investors, who then had the possibility to acquire properties at a very low price or to refurnish their existing assets by providing extra equity investments with the view to increase their rent."
Private equity funds and pension funds are therefore looking to benefit from the current real estate market situation in Denmark, he said.
Robert Laurence, chief executive of Resolution Property, said: "The stability of the underlying economy in Copenhagen, coupled with the opportunity to acquire good-quality assets at levels representing a significant discount to their peak values is of great appeal to us."
Damborg added: "Denmark currently offers a very strong economic outlook and a stable debt situation. While most of residential properties are owned by local investors, we expect investments from foreign private equity funds and pension funds to grow in the future as investments in real estate in Copenhagen are expected to provide a very secure and stable cash flow."
Saxo Properties is now looking at other investment opportunities in Nordic countries such as Sweden, where the company sees promise in the retail sector.
"Sweden appears as an attractive market to us, but also remains a difficult market, as prices have gone up very quickly over the last two years," Damborg said.
Last month, James O'Neil, head of marketing and client relations at Grosvenor Fund Management (GFM), told IP Real Estate that GFM was also targeting Sweden with the launch of a future fund dedicated to European retail properties, as well as through the opening of a new office in Stockholm before the end of 2011.