Norges Bank Open to More Japanese Real Estate Deals

Largest SWF ready for multiple 100 billion-yen agreements each year.

After dipping its toe in Japan’s real estate pool last year, the world’s largest sovereign wealth fund’s property investment arm is considering wading deeper into the waters.

According to Bloomberg Markets, the $1 trillion Norges Bank ‘s Real Estate Management is eager to produce several 100 billion yen ($912 million) deals in Japan each year, should the right offers present themselves.

The fund began investing in real estate in 2010, beginning in Europe before navigating into the US and Japan. Bloomberg reports that Deutsche Asset Management has said that Japanese real estate “currently offers higher yield spreads over domestic government bonds than other global cities, such as London and New York.”

In a 92.8 billion yen ($852 million) deal in December as part of a joint venture with Tokyu Land Corp., Norges Bank had acquired a 70% share of a retail and office portfolio. The other 30% went to Tokyu, with which Norges Bank Real Estate Management CEO Karsten Kallevig would consider making more deals, as well as other partners.

“We’d love to do more with Tokyu Land, but we would also be very happy to do more with others,” Kallevig told Bloomberg. “It’s hard to find one partner who has the same, let’s call it ambition, as we have.”

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