Aberdeen Property Fund Denmark P/S (the Fund) has acquired the commercial property portfolio from The Danish Pension Fund for Engineers (DIP). DIP will receive 40% of the acquisition price in shares in the Fund and will become a new important shareholder amongst the existing institutional and professional investors. The remaining 60% will be cash.
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The acquired portfolio comprises seven office properties and 65 million of assets under management.
Tonny Nielsen, CEO for Aberdeen Property Investors Denmark A/S commented:"This acquisition expands and strengthens the Fund's portfolio and we are also pleased to welcome DIP as a shareholder to the Fund."
The acquired portfolio comprises seven office properties adding approximately 40,000 m² to the existing 440,000 m² as well as DKK 487.5 million (65 million) of assets under management to the Fund. The acquired price reflects a net initial yield at 6.0%.
Tonny Nielsen commented further: "The composition of the portfolio complements the existing investment strategy of the Fund well in terms of size, type and regional focus."
The majority of rental income comes from public tenants and so the Fund carries a low tenant risk. Aberdeen expects to be able to identify value potential over time through active management therefore creating excess returns for all shareholders.
Søren Kolbye Sørensen, CEO of DIP also commented, "Being a shareholder in the property fund instead of direct owner of fewer single properties makes strategic sense to DIP. This is because we get higher potential returns through Aberdeen's active management while also increasing the diversification of our exposure to property."
Today, DIP has 9% of the total assets of DKK 24 billion invested in property. Søren Kolbye Sørensen noted: "Looking forward, DIP's investment strategy will involve allocating 6-10% of total assets under management to property. We believe that property as an asset class in the future will ensure our members good pensions, also in the event of increasing inflation."
In addition to this transaction, Aberdeen Property Investors Denmark took over part of the property management organisation ebh|administration from ebh|bank on 1 January 2009. This added a further DKK 1.5 billion of properties under management bringing total assets under management to DKK 8.7 billion (1.2 billion).
Tonny Nielsen commented: "We are pleased to have been able to raise capital in this market. Active management is what Aberdeen is all about. Regardless of difficult market conditions, our track record shows that the professional investor can create excess returns by divesting properties to the right property managers."
Source: Maitland
