Swedish pension fund AP7 and occupational pension company AMF have formed a joint venture company and acquired the Urban Escape neighbourhood in central Stockholm.

AP7 has a 33 per cent stake in the company, which corresponds to around SEK 7.4bn in property value, while AMF is the majority owner.

The joint real estate company, called Urban Escape KB, will become the owner of the Urban Escape city quarter, which includes the shopping centre Gallerian.

The joint owners stated that the deal was strategically important as it creates scope for further acquisitions and urban development projects.

AMF Fastigheter will continue to develop and manage the city block.

For AP7, the formation of the company and the co-ownership of Urban Escape is the fund’s first direct real estate investment.

At the turn of the year, AP7 received expanded investment opportunities for the managed capital of over SEK 900bn.

Its mandate for investments in illiquid assets, including real estate, private equity and infrastructure, was expanded up to 20 per cent.

"It is very gratifying to be able to make our first investment in one of Stockholm's most interesting properties,” said AP7 CEO, Richard Gröttheim.

“With it as a starting point, we will gradually expand our investments for many years to come, both in kronor and to more countries. AMF is an ideal partner on that journey."

AMF acting head of asset management, Per Olofsson, added: "Our long-term perspective as a pension fund means that illiquid investments suit us very well and give us a better spread of risk.

“It requires collaboration partners with the same values and approach to long-termism, which we found through AMF."

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