NBIM buys its first US real estate

Norges Bank Investment Management, the manager responsible for Norway’s sovereign wealth fund, has made its first property acquisitions in the US, reflecting the mandate to invest in more property assets globally.

NBIM has paid $1.2bn, or about NOK6.6bn, for a 49.9% joint venture stake with TIAA-CREF for assets in New York City, Washington DC and Boston.

TIAA-CREF retains a 51.1% stake in the properties, and will be responsible for their management.

The properties total 1.9 million square feet of rentable space. Two of the properties are located in New York, Two in Washington, and one in Boston. The joint venture will also seek to acquire additional office properties in these three US markets.

Karsten Kallevig, chief investment officer for real estate at NBIM, said: “This is the fund’s first real estate investment outside of Europe and is in line with our strategy to build a high-quality, global property portfolio. We are very pleased to team up with a partner that has TIAA-CREF’s knowledge and capabilities, and look forward to jointly developing the venture.”

“As the world’s largest real estate market, the US will be an important part of the fund’s long-term property portfolio. We will initially seek to invest in key East Coast cities.”

Norway’s sovereign wealth fund, or Pension Fund Global, invests the revenues derived to the government from the country’s oil and gas industry, for example, from the sale of exploration and drilling rights on the country’s continental shelf. The fund made its first property investments in 2011 in office and retail properties in London and Paris. It is mandated to hold 60% in equities, 35-40% in fixed income and as much as 5% in property.

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