Norway's oil fund to invest in real estate in Japan
2015.10.10 NewsNorway's sovereign wealth fund will start investing in Japanese real estate, aiming to secure stable returns over the long term, a move that could bring hundreds of billions of yen to the market.
The Government Pension Fund Global, the world's largest sovereign wealth fund, will soon set up an office in Tokyo. It will search for promising commercial properties, mainly office buildings, and make purchases within a year or two.
The fund began investing in real estate in Europe in 2011. Since then, it has added U.S. office buildings and logistics facilities to its portfolio. It intends to increase the weighting of real estate from 2.7% to 5% by also acquiring properties in Tokyo and Singapore.
Rents in Tokyo have been slowly rising thanks to strong demand for offices. In addition, redevelopment of commercial facilities is expected to pick up ahead of the 2020 Tokyo Olympics. Given those factors, the fund sees real estate in the Japanese capital as an attractive investment target.
The fund manages surplus wealth produced by oil fields in the North Sea. It had roughly 6.9 trillion kroner ($839 billion) in assets under management as of June 30, with equities making up slightly more than 60% and bonds accounting for 35%. The fund is one of the biggest foreign players in the Japanese stock market, holding some 4.8 trillion yen ($39 billion) worth of shares in such local corporations as Toyota Motor and Sony.
