REAL ESTATE - Danica Pension, Denmark鈥檚 largest life insurer, is to freeze its real estate holdings after announcing plans to increase its equity holdings from 16% to 20%-25%.
The A+ rated insurer, which invests primarily in the Danish market, is currently 8% invested in real estate and 鈥渨ould remain at that level鈥�, according to Danica Pension chief consultant Jens Dahlgard.
Danica reported a return on its real estate holdings for 2005 of 11.6%, up from 8.9% the previous year.
Despite house-price increases in 2005, Dahlgard said the fund had no immediate plans to increase its allocation to residential property. Housing currently makes up 10% of the real estate portfolio, compared with 40% office property and 50% retail. Danica is Denmark鈥檚 largest owner of supermarkets.
鈥淲e鈥檙e looking at the market to see whether housing is attractive to invest more in or not,鈥� said Dahlgard. The current return on residential property is significantly lower than that on commercial property.
He added that Danica was 鈥渟till optimistic鈥� about real estate, adding that any changes in allocation 鈥渨ould have to be within the framework of keeping a fair share in real estate鈥�.
