The world’s biggest sovereign wealth fund partnered with the Queen to buy nearly £200 million of London property last year

Piccadilly Circus in London. It is not owned by Norway's Global Government Pension Fund.

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Piccadilly Circus in London. It is not owned by Norway’s Global Government Pension Fund.
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REUTERS/Luke MacGregor

  • Norway’s sovereign wealth fund increased its London property portfolio by £200 million last year.
  • The fund partnered with the Crown Estate – which manages the Queen’s property empire – on the investments.
  • London now accounts for the largest single portion of the fund’s property holdings, with 22.8% of all its holdings in the capital, compared to 21.5% in New York, and 19.1% in Paris.

LONDON – The biggest sovereign wealth fund in the world partnered last year with the Crown Estate – which manages the Queen’s property empire – to buy nearly £200 million in London real estate.

Norges Bank Investment Management released its annual report on its property holdings on Tuesday. It showed Norway’s Global Government Pension Fund – the biggest sovereign wealth fund by assets under management – made three substantial new investments in London real estate in 2017, all of which were in conjunction with the Crown Estate.

The fund first invested £32.3 million in 10 Piccadilly in conjunction with the Regent Street partnership, a pre-existing collaboration with the fund and the Crown. It then spent £30 million on 25% of 263-269 Oxford Street and 1-4 Princes Street, before finally buying 25% of 20 Air Street – off Regent Street – for £112 million.

The fund – which by recent estimates is worth £760 billion – is a major investor in UK real estate, and particularly in the West End of London. In 2016, it spent £400 million buying two major retail spaces on London’s Oxford Street.

It bought 73-89 Oxford Street – a development under construction at the time – for £276.5 million, and spent a further £124 million buying 355-361 Oxford Street.

The fund also owns parts of New Bond Street, and properties on Savile Row, the street famous across the world for its tailors.

Tuesday’s data showed that London now accounts for the largest single portion of the fund’s property holdings, with 22.8% of all its holdings in the capital, compared to 21.5% in New York, and 19.1% in Paris.

“Central London office investment transactions rose 30 percent in 2017 despite economic uncertainty,” the fund’s report said.

“Transaction volumes ended at around 15 billion pounds, which was a return to the average level seen in the five years prior to the Brexit vote.”

Other new investments in Europe made by the fund in 2017 included the €425 million purchase of 261 Schützenstrasse in Berlin, and buying 6-8 boulevard Haussmann in Paris for €462 million.