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NBIM to open Japan office

Norway’s $870 billion sovereign wealth fund is planning to open an office in Japan this year.  

Norges Bank Investment Management (NBIM), the manager of the $870 billion Norwegian Government Pension Fund Global, is in the process of setting up an office in Tokyo, as it prepares to ramp up its real estate investments in the region.

A spokesperson for Norway’s sovereign wealth fund, confirmed to PERE that it is currently hiring people for the Tokyo office, which will be officially set up within this year.

NBIM has been actively looking to expand its real estate portfolio globally and venture into the Asian markets. In its 2014 annual report, NBIM revealed plans of investing approximately $26 billion in real estate assets globally over the next three years, in line with its long-term goal of having 5 percent of its fund in real estate investments.

In Asia, the fund is understood to be targeting Tokyo and Singapore for its first real estate investments in the region, Karsten Kallevig, the chief investment officer of real estate at the Oslo-based fund, said in a recent interview to Bloomberg.

As indicated in the annual report, NBIM would focus on mainstream property types like offices and logistics for investments.

So far, the sovereign wealth fund has been cautious in its investment approach, primarily keeping to mature markets in Europe such as London and Paris. According to the annual report, as much as $8.6 billion is expected to be invested in the US and Asian markets every year for the next three years.

As of beginning of April 2015, the fund had not made any real estate acquisitions in Asia, according to its quarterly investment report. In January, it acquired the Queensberry House in London for £190.6 million (€269.32 million; $293.88 million). This was followed by two property buys in the US: acquisition of a 45 percent stake in 11 Times Square for $401.9 million alongside Prudential Real Estate Investors and the New York-based real estate firm SJP Properties in February, and the $60.8 million acquisition of a 49.9 percent stake in an office property in Washington DC in partnership with TIAA-CREF in March.

As of end-March 2015, real estate investments amounted to 2.3 percent of the fund. It has branch offices in London, New York, Shanghai and Singapore.