Selected Alternative Fund's successful acquisition of Theklavej
Selected Alternatives fund creates value in a challenging market
In March 2024, Selected Alternatives fund took over the property on Theklavej in Copenhagen's Northwest neighborhood. The project started back in March 2022, when we agreed to buy the finished project, a so-called forward funding agreement. The acquisition of the property marks the end of a project where we have managed to navigate a complex real estate market that has experienced declines of up to 20% on comparable properties and still created value for our investors.
The Theklavej project started as an empty lot but is now a fully built property with 31 shareable apartments and great communal facilities for the property's residents, including a beautiful roof terrace. The Theklavej project is the result of a good and efficient collaboration with the developer of the project, Crescendo. A project of this scale is rarely without its challenges, and this was also the case for Theklavej. For example, the appointed contractor went bankrupt, but thanks to quick and good handling and Crescendo's large network, we quickly found a new contractor who was able to step in and take over the construction for the project to be completed on schedule.
Affordable apartments for students in Copenhagen
Copenhagen is experiencing an increasing demand for housing, especially from students and young people, with thousands of students flocking to the city every year. But the Copenhagen housing market is tight and prices are high, which can make it difficult to find a place to live. The high demand and high prices mean that it's necessary to look further beyond the city centre and look at the outskirts of inner Copenhagen. Barely 5 kilometers from City Hall Square is Copenhagen's Northwest neighborhood. It's an area that has experienced a major boom in recent years, including a large influx of local businesses, but where the large price increases in real estate have not yet followed. With shops, shared offices, and cafés often come housing, and this is also seen in the Northwest. Here, the construction of Theklavej is a good example of how it is possible to create attractive and affordable apartments for the younger segment.
2% return despite real estate market headwinds
Despite real estate market headwinds, the Theklavej project has managed to deliver an impressive 2% return over the entire period. This is due to several factors, including the fact that the project was purchased as a development project, which made it possible to negotiate an attractive price below the market standard at the time of purchase.
Selected Alternatives is proud to have led a project that can help solve the housing challenges for young people and students in Copenhagen. All apartments have been rented out, which is not only good news for the residents of the property who now have a great home. It is also good news for our investors in the Selected Alternatives fund, as the project has already generated returns in a challenging market and has the potential to deliver solid returns going forward by making a difference in an otherwise tight housing market.
Shareability and new neighborhoods: Theklavej follows the trend
It's not just in Copenhagen that students and young people are struggling to find a place to live. In several of the world's largest cities, it is difficult to find affordable housing for students. There is therefore a strong focus on how to find innovative solutions to the housing problem. In New York and London, for example, we are seeing more and more housing being built where the common areas take up more space in the properties. In Copenhagen, too, much has happened in the housing market in recent years. New neighborhoods such as Carlsberg Byen and Jernbanebyen have emerged as a result of the huge demand for housing, and the Copenhagen administration wants to build 40,000 new homes in Copenhagen by 2036.
With the construction of Theklavej, the Selected Alternatives fund is at the forefront of the trends currently seen in housing markets worldwide, where shareability and new neighborhoods are gaining ground. Theklavej meets the growing demand from young people looking for attractive housing in Copenhagen.
Read more about the Selected Alternatives fund
The Theklavej project is just one of the many projects that are part of the Selected Alternatives fund. The fund has a broad portfolio of alternative investments including real estate, solar energy, wind energy, and green infrastructure.
Investors in the Selected Alternatives fund receive a stable expected return with a low correlation to the stock market. Although the fund itself is not green, the investments often have a green profile that contributes to the green transition.
You can read more about your alternative investment options through the Selected Alternatives fund here.
