Norway's wealth fund to buy property stake from Prologis

OSLO Mon Dec 23, 2013 9:53am EST

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OSLO (Reuters) - Norway's $812-billion sovereign wealth fund, the world's largest, has agreed to buy a 45-percent stake in a portfolio of U.S. warehouses valued at $1 billion from U.S.-based Prologis (PLD.N) as the fund builds up its still-small property assets.

The fund will pay $450 million for the stake, leaving Prologis with 55 percent to manage the assets.

The deal involves forming a joint-venture between the two organizations, the second between the two. Last year the fund agreed to buy from Prologis a 50-percent stake in a portfolio of European warehouses for 1.2 billion euros.

More deals of this kind are expected in the future, the fund said.

"Management anticipate adding to the initial portfolio over time with further investments in the United States," the fund said in a statement.

The deal includes 66 properties located across eight U.S. states, in locations such as the San Francisco Bay area, southern California, Pennsylvania, New Jersey, Nevada, Chicago, Seattle, Atlanta, and Miami.

The fund's real estate holdings are still small, representing 0.9 percent of the value of its portfolio at the end of the third quarter. But its aim is to increase this proportion to as much as 5 percent.

In the third quarter the fund had some 63.6 percent of its investments in equities, 35.5 per cent in bonds and the rest in property.

The transaction is expected to close before February 28 next year.

(Reporting by Gwladys Fouche; Editing by Greg Mahlich)

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