SWEDEN - AMF, the SEK289bn (€24.7bn) Swedish pension fund, has bought an office building in Stockholm from RREEF, the alternative investment management business of Deutsche Bank's Asset Management.
AMF purchased Europahuset from Grundbesitz Global, the German open-ended real estate fund managed by RREEF, as part of the pension fund's plans to increase its property allocation from 8% to around 10-15%.
"We have not found the right price levels during the last three years and all of a sudden the prices are at a level where we can find our long-term return so we are investing as much as we can during the time being," said Mats Hederos, managing property director at AMF.
"This was the first investment and hopefully we will be able to find more properties this year," he added.
The transaction is due to be completed by 1 April 2009, however, AMF and RREEF have agreed to keep the price of the purchase confidential.
The Europahuset office building has 16,804sqm of usable space and is fully occupied by tenants, including the European Commission.
It is located on Regeringsgatan 65, close to another of AMF's buildings, the Sahlénhuset.
The Grundbesitz Global fund purchased the property in 2003 for SEK800m (€88m) from Drott.
The pension funds' real estate portfolio is currently valued at SEK20bn and AMF will this year focus on investing in large office and city retail properties in central Stockholm.
The property portfolio returned -7% in 2008 as a result of higher yields, however, rents increased 4% by index in the existing stock.