Norway to invest £500bn in UK commercial market

Photo: Yuemobar

The Norwegian sovereign has pledged its multibillion pound pension fund into a joint venture with AXA Real Estate, with the JV looking to capitalise on a booming commercial property market, reports Bridging and Commercia l.

AXA Real Estate, an arm of French insurance giant AXA, will manage the portfolio on behalf of the NBIM fund, targeting European commercial real senior loans of up to £500 million.

Commonly known as the oil fund, it is expected that AXA Real Estate and NBIM will write loans on a 50:50 basis secured by commercial property predominantly in the UK, however also France and Germany.

Speaking on the news, Isabelle Scemama, global head of real assets finance at AXA Real Estate, said: “This partnership consolidates our competitive advantage in that it increases the size of individual real estate loans we can underwrite to €600 million. We are now looking forward to co-investing alongside them as we seek further opportunities to invest in the European CRE debt markets.”

For some time now AXA Real Estate has begun to lend to the more riskier end of the market, unsurprising when one considers the volatility of prime real estate across major cities in Europe.

NBIM has also been looking to expand its real estate footprint for a long time, given its considerable and seamlessly never-ending source of pension fund capital.

NBIM, or Norges Bank Investment Management, manages Norway’s 4.14 trillion kroner pension facility, otherwise identified as the Norwegian oil fund.

Sub distribution networks are currently not thought to be an option, though this could change depending upon regional representation.