Norges Bank Investment Management (NBIM), which manages Norway’s oil-fuelled sovereign wealth fund, has acquired Le Madeleine office and retail property in Paris from US fund manager BlackRock for €425.6 mln.

Norges Bank Investment Management (NBIM), which manages Norway’s oil-fuelled sovereign wealth fund, has acquired Le Madeleine office and retail property in Paris from US fund manager BlackRock for €425.6 mln.

As signalled by PropertyEU in May, Norway's €651 bn Government Pension Fund Global emerged ahead of eight other bidders in the running to acquire Le Madeleine, a 32,000 m2 mixed-use asset in the first arrondissement of the French capital.

The property was acquired by BlackRock Europe Property Fund III from UK REIT Hammerson in 2009 for €210 mln. At the time, the price represented a 24% discount to the last valuation of €275 mln.

Formerly known as Les Trois Quartiers, Le Madeleine has undergone extensive refurbishment to its 1930s facade and retail space in recent years. In the last five years new retail and office leases have been signed with eight tenants including Chanel, Visa and C&A.

Jean-Philippe Olgiati, director of BlackRock Real Estate in France commented: ‘With Le Madeleine we have completed a complex redevelopment project. The acquisition was made when there was little liquidity in the market, but we feel the building is now transformed into both a fantastic place to do business and also an excellent core asset for institutional investors. We are committed to being active in the market and are assessing future opportunities to deploy capital in France and generate returns for our clients.’

BlackRock was advised by King & Spalding, Racine, Etude Brulon, Catella and JLL.

The deal comes shortly after NBIM announced plans to pursue a more aggressive and independent strategy in a bid to expand its global real estate holdings to about €20 bn over the next two years.

The Norwegian SWF expects to invest 1% of its funds over the next three years in private real estate.

Norges has long invested in listed real estate, holding about 1.3% of all listed stocks in the world, including a large number of prominent stock market-listed property companies. In 2010 it began investing directly in European real estate, followed by US property in partnerships with major asset managers such as AXA Real Estate, Generali Real Estate and Prologis.