Denmark’s Sampension is facing a lawsuit of more than DKK 10m over alleged defects in a Frederiksberg housing development, marking the latest chapter in a dispute with residents that has lasted more than seven years, Danish news site EjendomsWatch has reported.

The conflict dates back to Sampension’s 2016 conversion of a former domincile property ‘Hassinghus’, at Vodroffsvej 26, into 48 luxury condominiums.

The apartments, boasting views over Copenhagen’s Lakes, were sold individually in 2018 - but residents said they soon encountered a series of problems, ranging from crooked floors and cracked walls to inadequate ventilation.

Owners’ association board member, Jesper Lund Larsen, told EjendomsWatch that several independent expert assessments documented extensive deficiencies, including an undersized fire sprinkler system, which, in the event of a blaze, could have left the top floors at risk of destruction.

Negotiations between the association and Sampension have continued for years without resolution, leading the owners to summon the pension fund to court.

The association claims the defects breach contractual obligations and building standards, and that the cost of repairs justifies the multimillion-kroner claim.

In a response provided to European Pensions, Sampension senior portfolio manager, Martin Rauhe Pedersen, described the situation as “unsatisfactory for all parties”.

“We do not wish to conduct case proceedings through the media,” he said, but added that the firm could “factually state” it has addressed several issues with the property and made multiple attempts - through the owners’ association and its successive lawyers - to settle the remaining claims.

These attempts, Pedersen noted, have been unsuccessful.

The ongoing dispute has also undermined the potential profitability of the property investment.

However, accounts show that Ejendomsselskabet Vodroffsvej 26 - empty since the flats were sold - has incurred more than DKK 6m in external costs since 2015.

Consequently, in 2024, the property company reported no income and a loss of DKK 1.2m.

For the current year, losses are expected to be in the range of DKK 500,000 to DKK 2m, with a ruling on the case not expected until 2026.

Meanwhile, Sampension reported that returns on its investments fell from DKK 21.4bn in 2023 to DKK 17.2bn in 2024.

The pension provider also recently invested more than DKK 500m in a residential property in Copenhagen’s Ørestad, its largest property investment so far this year.

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