Norway agreed to pay about 448 million pounds ($722 million) for 25 percent of London’s Regent Street, the first real-estate investment by the oil-rich country’s sovereign wealth fund.
/ Source: Bloomberg
The Norwegian Government Pension Fund Global will buy a share of 113 buildings on the West End street from the Crown Estate, the British monarchy’s property manager, according to a statement today. In March, the $520 billion fund was given government approval to invest as much as 5 percent of its assets in real estate.
Sovereign wealth funds from countries including Qatar and China have invested in London real estate to take advantage of the market’s resilience and the pound’s weakness. Barwa Real Estate Co., controlled by Qatar’s wealth fund, agreed to buy Park House for 250 million pounds in June. The office and retail project is the biggest development in about 40 years on London’s Oxford Street.
he transaction will probably be completed by the end of March, NBIM said today. The wealth fund will then receive a quarter of all income generated by the properties, mostly in the form of rent.
The Regent Street real estate is the Crown Estate’s biggest asset, with a value of 1.6 billion pounds on March 31. The deal values the buildings, spread over 39 blocks, at 12 percent more than that. Norway will acquire a 150-year lease and the buildings will still be managed by the estate.
The Crown Estate has been seeking a partner to help finance a 750 million-pound investment plan on Regent Street. Located between Piccadilly Circus and Oxford Street, Regent Street is in London’s busiest shopping district and has retailers including Apple Inc. and Burberry Group Plc. The Apple store is the U.S. company’s most profitable in the world.