Norway's SWF makes first real estate investment in Asia with JPY93bn deal

Norway’s sovereign wealth fund has made its first real estate investment in Asia by acquiring a majority stake in five properties for JPY92.75bn (€699m).

Norges Bank Investment Management (NBIM), which manages investments for the NOK8.41trn (€862bn) sovereign fund, will buy a 70% interest in five properties in Tokyo, Japan, in a joint venture with a new partner, Tokyu Land Corporation.

The total portfolio, which comprises 12,300sqm of retail and office space, is valued at JPY132.5bn. The seller of the properties is Veloqx Group.

Tokyu Land Corporation will acquire the remaining stake and manage the properties on behalf of the joint venture.

The venture plans to finance 49% of the acquisition with a bank loan.

Karsten Kallevig, chief executive officer of Norges Bank Real Estate Management, said: “This is the fund’s first real estate investment in Asia and is in line with our strategy to build a high-quality, global portfolio.”

“We are pleased to team up with a solid and knowledgeable partner such as Tokyu Land Corporation, whose focus on the greater Shibuya area puts them in a good position to manage the portfolio.

“As one of the world’s largest real estate markets, Tokyo will be an important part of the fund’s long-term real estate portfolio.”

The sovereign wealth fund, Government Pension Fund Global, began investing in real estate in 2010, starting in Europe before expanding into the US.

Last year, Kallevig told IPE Real Assets that the fund was ready to enter Asian markets, having opened offices in Tokyo and Singapore.

The real estate strategy in Asia will be the same as elsewhere, Kallevig said. “We’ve picked two cities – Singapore and Tokyo – because we think those are two good places to start, and I think the strategy is very similar to what we have done elsewhere.”

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