Norwegian oil fund buys $5.9bn US industrial portfolio
Norway’s sovereign wealth fund has grown its industrial real estate portfolio, acquiring KTR Capital Partners for $5.9bn (€5.49bn).
The deal is the latest move by Norges Bank Investment Management (NBIM) to expand its property holdings as it aims to invest 1% of the Government Pension Fund Global’s NOK6.94trn (€824bn) in assets into real estate each year and comes as part of an existing joint venture between Prologis and NBIM.
Prologis US Logistics Venture, 45% owned by the sovereign wealth fund, is taking over 332 properties held in three KTR co-investment funds, Prologis said.
The portfolio spans 60m sq ft of existing industrial space, 3.6m sq ft of space occupied by development projects and 6.8m sq ft of land.
The $5.9bn transaction includes the assumption of approximately $700m of secured mortgage debt, according to Prologis, and the issuance of up to $230m of common limited partnership units in Prologis LP to KTR.
Prologis and Norges Bank operate joint ventures in the US and Europe.
Hamid Moghadam, chairman and chief executive Prologis, said the deal would take assets to more than “$11bn on two continents”.
Norges Bank has a real estate allocation target of 5%.
At the end of last year, its actual property exposure stood at 2.2%.
For Prologis, a listed developer and manager, the KTR acquisition increases its presence in Southern California, New Jersey, Chicago, South Florida, Seattle and Dallas.
Prologis said the investment “aligns with Prologis’ investment strategy, with approximately 95% overlap with its existing US portfolio”.
The Norwegian government recently launched a consultation on whether the sovereign fund’s 5% real estate cap should be lifted.