The move will be largely financed from new business wins, but Rasmus Norgaard, the firm’s head of international real estate, told nrpn that it could also source money from some of its domestic property assets.

‘We do not have a strategic plan as to what we want to achieve with our overseas property holdings,” he said. “But we would like to increase our international allocations to roughly one-third of our total exposure and right now we have almost E3bn of real estate assets under management. Much of this increase will come as a result of us pushing any new money we receive into overseas property, but a small part may come from us selling some of our domestic holdings.”

The news comes on the back of a continued push by Nordic asset and pension managers into the international property arena, which has seen the Danish Real Estate Club pledge E350m a year for the next three to five years to overseas indirect property funds (see page 24).

Additionally, Aberdeen Property Investors is to increase the size of its pan-European property fund of funds to E200m after collecting money from Folksam, Nordea Life & Pension, the Finnish State Pension Fund, and another as yet unnamed Finnish investor.

At the same time, Denmark's AP Pension is considering its first move into the international real estate market later this year, following an investment review. It might allocate up to five per cent of its total assets to the sector.

“Since the 2001 shake up on the equity side people have become much more concerned with risk and investors have become much more aware of their single market exposure. This is a driver in the property shift abroad,” said Mr Norgaard.

According to IPD, Danish property pulled in returns of 6.3 per cent in 2004 compared to returns of 10.2 and 11.4 per cent in 2000 and 2001 respectively.

Comparatively, the UK market pulled in returns of 18 per cent in 2004, while the Irish and Spanish markets garnered returns of 11.5 per cent each. The Norwegian real estate market, meanwhile, notched up returns of 10.4 per cent in 2004 – up from seven per cent in 2002 and 7.6 per cent in 2003.

“If there is one asset class in which people should make sure they diversify and move away from single-country risk, then it is property,” said Peter-Hans Budde, director of institutional relations at Kempen Capital Management.

“Until about five years ago there was only one property market in Europe – the direct property market, but that has changed and pension funds all over Europe are taking advantage of that fact,” he added. (See feature on pages 23–26.) CN

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