Danish pension scheme PKA to boost global property investment

GLOBAL - Denmark's PKA is channelling DKK375m (€50m) into a global property fund as part of its strategy of boosting real estate holdings outside its home territory.

The DKK150bn pensions administrator is investing the money in the SPF II fund run by Danish investment manager Sparinvest.

PKA's head of real estate Nikolaj Stampe said involvement in the new SPF II property fund would bring PKA closer to its goal of owning more investments abroad, including within emerging markets.

Stampe said: "PKA has invested massively in Danish property in the last few years, but, alongside this, we want to increase our exposure to property abroad, so making use of Sparinvest's expertise is an obvious choice for us."

The property fund has now attracted DKK1.5bn of investment, with this capital coming from PKA, Danish pension funds Lærernes Pension and PenSam, and other investors.

Sparinvest expects to generate a net annual return for investors of around 13% from ongoing rental income and growth in values, PKA said.

SPF II targets small and medium-sized funds that invest money in property that is typically too small for major investors, but that has development potential, PKA said.

Fund selection and day-to-day management is done by Sparinvest subsidiary Sparinvest Property Investors.

Bo Jensen, managing director of the subsidiary, said: "We are big believers in specialised managers. We have now invested in five specialist funds and through these gained provisional exposure to 20 properties, including rental homes in California, office property in New York, hotels in Germany and a shopping centre in China."

When all investment is completed, the portfolio will consist of 150-200 properties divided among around 12 funds, PKA said.

PKA manages eight labour-market pension funds with combined assets of DKK150bn. Its real estate investments in Denmark currently total DKK11.5bn, with foreign property investments standing at DKK1.4bn.

It said its property investments have yielded returns of more than 10% a year on average over the last 10 years.