Categorized | International

Norway’s Oil Fund Joins Forces with Axa to Buy Paris Properties

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In an effort to boost returns, Norway’s massive oil fund has opted to diversify its portfolio by purchasing international real estate. The government fund worked together with Axa, a real estate asset management company in order to make the purchase. Norway’s oil fund purchased three rental properties in Paris for roughly four hundred million dollars.

The purchase marks yet another real estate investment by the oil fund. Norway’s government fund has allocated twenty-five billion dollars to spend on international real estate investments. They are looking to take advantage of depressed market prices on units that will produce steady yearly income. In the case of the properties purchased in Paris, each of the three rental properties are fully occupied, thus generating guaranteed income year-over-year.

The fund has now made two purchases in the French capital, as well as one in London. The previous purchase in Paris involved a fifty percent stake in seven properties. That purchase cost the fund more than eight hundred million dollars. The oil fund also purchased a twenty-five percent stake in London’s Regent Street, which cost more than seven hundred million dollars.

Norway’s Oil Fund is not the only investment fund looking to international real estate to bolster its portfolio. A major of investors in prime European and American markets have been from international waters. As lenders continue to restrict lending to potential domestic property buyers, international buyers are taking advantage of low prices by paying with cash. That trend will likely continue into 2012, as prices continue to remain attractive in prime areas.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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