Norway is to increase its investment in real estate in the United States to as much as $11 billion. The nation's sovereign wealthy fund has made the announcement that it intends to invest up to $11 billion in real estate in the United States as the recovery of the country's real estate market continues to gather increasing momentum.
As of three months ago, back in September, the fund was holding 0.3% of its assets in terms of real estate, with 39.4% in bonds and 60.3% in stocks. Now, however, the Ministry of Finance in Norway has given the mandate for the fund to put as much as 5% of its assets in property, with 1.7% of this amount set to go to the United States. The chief executive officer of Norges Bank Investment Management, Yngve Slyngstad, said in an interview that the United States is the next big real estate market to invest in.
Norway is following in the footsteps of a whole string of state owned funds that are attempting to do their best to diversify their portfolios in a bid to minimize their level of financial risk. China Investment Corp invested heavily in Manhattan back in 2010, and now the Scandinavian nation also wants in; it is on the lookout for bigger returns after having suffered record losses four years ago back in 2008.
"The fund is focusing on conservative property investments such as large office complexes in major cities and developed malls," Slyngstad added.
To date, the trust has succeeded in investing in commercial property situated everywhere from London to Paris, Berlin, Frankfurt, Sheffield and Zurich, and with demand and prices up across the Atlantic it is therefore no surprise to discover that the US is next on the list.
