Major institutional players with deep pockets helped push Q3 volumes higher as prime real estate maintained its image as a stable asset class but the emphasise remained on the most secure assets.
Major institutional players with deep pockets helped push Q3 volumes higher as prime real estate maintained its image as a stable asset class but the emphasise remained on the most secure assets.
Norway's massive oil-fuelled pension fund has been seen as a potential 'white knight' for real estate since early 2010 when the fund confirmed plans to invest some EUR 16 bn in property across the globe. In the intervening period the EUR 378 bn Government Pension Fund Global has twice deployed its massive equity firepower in European real estate: in July this year it paid some EUR 700 mln to take a 50% stake in AXA REIM's office portfolio in Paris after acquiring a 25% stake in London's Regent Street from the Crown Estate in November 2010 for more that EUR 500 mln. Last week, it emerged that the Norwegian pension fund and AXA REIM are jointly acquiring a portfolio of Paris offices for EUR 290 mln.
With these deals the Norwegian sovereign wealth fund has certainly made its presence felt in the real estate world but its actions are hardly those of a heroic knight. Rather than seeking adventure and taking risks, the Norwegians are doing what institutional investors invariably do in times of financial uncertainty - going for core assets in partnership with other large seasoned investors. The joint venture with AXA was the largest real estate transaction recorded by PropertyEU Research during the third quarter of 2011and typifies the flight-to-safety strategy that dominated the review period.
The full article appears in the November edition of PropertyEU Magazine. Click on the link below to subscribe
