OSLO, Dec 21 (Reuters) - Norway's $685 billion sovereign wealth fund will be allowed to buy real estate outside Europe from next month, giving it a long-sought mandate to buy property in the United States, the country's finance ministry said on Friday.
"The finance ministry wants to expand the fund's land distribution and it's prudent to include new countries," it said in a statement. "On advice from Norges Bank, the ministry has now adjusted its mandate to open up for investments in other parts of the world."
The world's biggest sovereign wealth fund is a relative newcomer to the real estate market and has mostly invested in office and retail space in European capitals.
However, it is speeding up investments as it gains the critical expertise and announced a 1.2 billion-euro ($1.59 billion) deal on Thursday to buy a commercial property portfolio in a joint venture with Prologis.
The fund, which invests Norway's surplus oil and gas revenues, has been advocating a broader real estate mandate and singled out the United States as a target for further investment.
At the end of the third quarter it held less than 1 percent of its assets in real estate, below a 5 percent goal, and predicted it would take years before it would reach the planned level.
The fund is forecast to grow to $1.1 trillion by 2020, indicating it could hold $55 billion in real estate by then.