Norwegian pension giant buys stake in Regent St

Norway's giant government pension fund has made its first foray into the real estate sector by acquiring a chunk of Regent Street in London for £448 mln (EUR 511 mln).

The Crown Estate - which manages all the properties owned by the British sovereign - announced on Thursday that it is establishing a Regent Street property partnership deal incorporating all of The Crown Estate's Regent Street properties with Norges Bank Investment Management (NBIM).

NBIM, which manages the EUR 340 bn Norwegian Government Pension Fund Global, has agreed to buy a 150-year lease on a 25% stake in the street for £448 mln. NBIM was selected from a shortlist of four bidders.

Roger Bright, CEO of The Crown Estate said: 'We are delighted that one of the world’s largest sovereign wealth funds, has chosen The Crown Estate and Regent Street for its first-ever property investment. NBIM's long-term approach is aligned ideally with The Crown Estate’s own core values, commercialism, integrity and stewardship.'

'We are very pleased to become a partner in Regent Street with The Crown Estate,' said NBIM CEO Yngve Slyngstad. 'This will be the fund's first real estate investment and we look forward to a long and beneficial partnership.'

The deal sees The Crown Estate for the first time directly manage assets on behalf of a third party investor and funds raised from the sale will be used for investment across The Crown Estate's diverse assets including Regent Street.

This is in line with The Crown Estate’s investment strategy that focuses on rebalancing its urban portfolio by investing in commercial assets outside of London, in the marine estate and importantly in core central London holdings.

Since 2002 The Crown Estate has been implementing a comprehensive £1 bn regeneration programme in Regent Street to transform the street into an international destination for business and retail. Current retailers include Apple, Banana Republic and Jaeger. Regent Street offices are home to leading businesses such as Lloyds TSB and Matrix Group.