Norway — which owns the world’s biggest state wealth fund — has bought a 45 per cent stake in the industrial and logistics company Prologis.
The sovereign-wealth fund has paid $450m for a 45 per cent stake in the US-based company, leaving Prologis with the remaining share and full management control over its assets. Prologis is Britain’s biggest owner-operator of distribution properties with more than 20m sq ft of warehouse space nationwide.
The partnership is the second joint venture between the fund and the company. Last year the fund agreed to pay €1.2bn for a 50 per cent stake in a Prologis portfolio of 195 European warehouses in Spain, Italy, Poland, France and the UK. In total, the buy-in gave the fund a stake in 4.5m sq metres — around 48m sq ft — of rentable space, the majority used as distribution facilities by 300 tenants.
In a statement at the time, Karsten Kallevig, chief investment officer at Norges Bank Investment Management which oversees the fund, said: “The agreement marks the fund’s first investment in industrial real estate and is in line with our strategy to build a high-quality portfolio that’s spread over different countries and sectors.”
Included in the latest deal are 66 properties across eight US states, in locations such as Nevada, Chicago and Atlanta. There is no debt linked to the joint venture and no financing will be involved, Kallevig said.
“We are continuing to invest in a solid portfolio of logistics assets close to key transportation hubs,” he added. The new partnership plans to expand the initial portfolio with more worldwide investments.
Norway’s fund gets its money from profits and taxes levied on the oil and gas industry and which adds a staggering $1bn a week to its coffers. On a day-to-day basis it holds one per cent of the world’s shares and in Europe controls more than two per cent of all listed companies.
It also wants to establish itself as a major real estate player, increasing its property investments to five per cent of its total assets within years. Its recent acquisitions include properties in major cities like New York, Paris and London.
In June last year the fund paid £350m for a portfolio of Home Counties warehouses. Within weeks it had parted with another $238m for a 47.5 per cent stake in Boston’s 46-storey office tower One Financial Centre.
The fund, which is used to pay the Scandinavian country’s state pension bill, still has a relatively small investment in property, representing 0.9 per cent of the entire value of its portfolio at the end of the third 2013 quarter. In the same quarter around some 63.6 per cent of its investments were in equities, with 35.5 per cent in bonds.
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