Norway's $1trn sovereign fund enters Asian market with $280mn investment in Tokyo

Norway’s $1trn sovereign wealth fund, the largest fund in the world which is managed by Norges Bank Retail Estate Management, has entered the Asian property playing field.

The management firm signed an agreement to buy a 70% stake in five properties in Tokyo, in a joint venture with Tokyu Land Corporation.

Norges will pay out a total of $820mn for the property stake. Almost 50% of the deal will be financed by a bank loan.

The remainder will be acquired by Tokyu, which will also manage the properties.

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According to Karsten Kallevig, CEO of Norges: “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.”

He also told Reuters: “We have looked at Asia, and Tokyo in particular, for a couple of years… we looked at transactions and either the asset, the partner, or the price… those boxes have not been ticked. With this one, it is pretty interesting. It is a fair price.”

He stated of Tokyu: “I hope we can do more together… now we still need to find opportunities that fit their strategy and our strategy.”

Norges, according to its website, splits its funds thus: 65.9% on equities, 31.6% on fixed income and 2.5% on unlisted real estate.

The fund is known for buying office and retail space in big cities and has also invested in logistics centres, which is has not ruled out in Asia. 

It has also expressed interest in Singapore but has yet to find the perfect deal.


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