(Norway oil fund correct property price to $600 mln from $1.2
* Buys 49.9 pct stakes in 5 properties for $600 mln
* TIAA-CREF will hold onto 50.1 pct and manage properties
* Two firms seek further investment opportunities
OSLO, Feb 11 Norway's $700 billion oil fund made
its first property purchase in the United States on Monday,
buying minority stakes in five assets for around $600 million
from financial services firm TIAA-CREF, it said in a statement.
The move is part of an evolution of the fund's investment
strategy as it gradually moves its focus away from Europe and
diversifies the type of assets it holds.
It received a mandate from the Norwegian government to
expand into U.S. property only in December.
The fund purchased 49.9 percent stakes in assets in New
York, Washington and Boston with TIAA-CREF holding on to 50.1
percent and managing the properties in partnership with the
"The joint venture will seek to acquire additional office
properties, primarily in these three cities," the oil fund said.
"As the world's largest real estate market, the U.S. will be
an important part of the fund's long-term property portfolio,"
said Karsten Kallevig, the head of the fund's real estate
business. "We will initially seek to invest in key east-coast
The oil fund, which invests Norway's surplus oil revenue, is
allowed to hold up to 5 percent of its assets in real estate, or
roughly $35 billion, and considers its natural to invest a third
of this figure in the United States.
The fund, managed by Norway's central bank, made its first
property purchase in 2011 and stepped up property buys in the
second half of 2012 after adding the staff and knowledge to make
Initially it purchased high end property in Paris and London
but made a $1.6 billion investment into commercial property in
It generally buys property in partnership with a more
experienced property investor or alone if the property has a
long-term secured tenant.
The fund holds up to 60 percent of its assets in stocks,
35-40 percent in bonds and the rest in property with the
portfolio shifting away from Europe in recent quarters.
(Reporting by Balazs Koranyi; Editing by Toby Chopra)