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NBIM in £343m London portfolio investment

The manager of Norway’s $873bn sovereign wealth fund has acquired for it a majority stake in a 43-strong property portfolio centred on the city’s popular Regent and Bond Streets.

Norges Bank Investment Management (NBIM), the manager of Norway’s colossal sovereign wealth fund, has acquired a majority stake in a large, mixed portfolio of properties in central London, for £343 million (€430 million; $576 million), it announced today.

NBIM, which manages the $873 billion Government Pension Fund Global, said it had acquired a 57.8 percent stake in the Pollen Estate, a portfolio if 43 buildings located principally between London’s popular Regent Street and Bond Street.

Approximately half the portfolio consists of offices, NBIM said, with the remainder comprising “merchandising” properties.

The seller of the stake was the Church Commissioners for England, an institution that invests on behalf of the Church of England. In a related transaction, the Crown Estate, the property company of the British royal family, has purchased a 6.4 percent stake for £38 million.

The Pollen Estate will retain its ownership of the remaining stake, and, as is customary for NBIM when it makes private real estate transactions, the London property company will retain management responsibilities for the assets.

NBIM revealed in its most recent report, published in June, how it plans to invest 1 percent of its portfolio into property annually for the next three years. On the fund’s current valuation, that would mean approximately $26 billion deployed into the asset class in that time frame.

The fund, which was only granted permission by the Norwegian government to be invested in real estate in 2010, first invested heavily in mature markets in Europe, London and Paris in particular. But while it has since spread its horizons to include US outlays and earlier this year said it would make its first outlays in Asia, it has not let up in making European outlays.

Indeed, in the last 12 months alone, NBIM has made significant investments in office, retail and industrial deals in the region.