Norway’s colossal sovereign wealth fund has continued its rampage in the world of real estate investing by announcing another three transactions, valued at a combined $1 billion.
On Friday, the Government Pension Fund Global, which has $923 billion of assets and is seeking to invest up to 5 percent in property, announced via Norges Bank Investment Management (NBIM) that it had acquired a 100 percent interest in the Bank of America Merrill Lynch Financial Centre in London for £582.5 million ($935 million; €738 million) in cash.
The seller of the 585,000-square-foot property that is fully let to Bank of America was GIC Private Limited, the sovereign wealth fund of Singapore, meaning this was a transaction from one sovereign to another. The contract was signed and completed simultaneously.
On the same day, NBIM also said it had acquired a 50 percent stake in a 452,000-square-foot logistics asset in Born, the Netherlands, for which the seller, Prologis, will continue the asset management. The deal was small by Norway’s standards, however, standing at just €12.4 million.
The day before, Norway said it had bought a 50 percent stake in a Prologis logistics property for £55 million, once again in an all-cash deal. This one measures more than 650,000 square feet and is located in Enfield, north London.
No one can have overlooked the purchasing spree that Norway has embarked upon. Just over the summer alone, NBIM said it had struck up a total of €2.27 billion of deals in Europe and the US.
Its most eye-catching deal arrived in the shape of a 45 percent interest in 601 Lexington Avenue in New York, 100 Federal State in Boston and the Atlantic Wharf Office Building, also in Boston, for $1.5 billion. That investment was announced just a few days after NBIM said that it had made its first real estate investment in San Francisco, acquiring a 49.9 percent interest in The Orrick Building, also known as Foundry Square II, in a joint venture with TIAA-CREF.
Three days prior to that, NBIM said it had acquired a portfolio of eight logistics properties in Madrid and Barcelona via its existing joint venture with Prologis. That deal was signed on August 22, and the fund paid €242 million for its 50 percent stake.
Also in August, NBIM assumed a £343 million (€430 million; $576 million) London portfolio having acquired a 57.8 percent stake in the Pollen Estate, a portfolio of 43 buildings located principally between London’s popular Regent Street and Bond Street, including famous Savile Row. The seller of the stake was the Church Commissioners for England, an institution that invests on behalf of the Church of England.
Meanwhile, Norges is trying to ramp up its real estate team as it struggles to match growth in cash with its desire to have 5 percent of its assets in property. A few weeks ago, NBIM reshuffled its real estate team as part of a wider reorganization aimed at a clearer definition of strategy. It emerged that it planned not to double but quadruple the size of its team from 50 to 200 staff within the next three years. Given its aim to invest 1 percent of the fund each year in real estate, or $8.73 billion per year, that means each person on average will be responsible for $174 million of additional real estate.
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