The Queen’s speech with Norges cures stuttering Regent St

The UK Crown Estate, which as the name suggests manages the assets and estate of the Crown, has entered into the second joint venture with an institutional investor in as many months. Norges Bank, which manages the 2,908 billion kroner ($498 billion) Norwegian Government Pension Fund Global, has purchased a 150-year lease on a 25 per cent stake in the Estate’s Regent Street properties. This follows a deal in December with the Healthcare of Ontario Pension Plan.

It is the first real estate investment for the Norwegian sovereign wealth fund, which received a mandate in March last year to invest as much as 5 per cent of its assets in real estate. This investment cost the fund £452 million ($721 million).

The partnership will give the fund 25 per cent of the properties’ net income, which primarily comes from office and retail space rent. The Crown Estate will retain 75 per cent of the income and will continue to be responsible for the management of the portfolio.

“We’re very happy to have signed an agreement and look forward to a long and beneficial partnership with The Crown Estate,” global head of real estate asset strategies at Norges Bank Investment Management, Karsten Kallevig, said.

David Shaw, head of Regent Street at The Crown Estate said: “We are delighted that one of the world’s largest sovereign wealth funds, has chosen The Crown Estate and Regent Street for its first-ever property investment. NBIM’s long-term approach fits perfectly with our ongoing commitment to regenerating Regent Street to create an international retail and business destination.”

Sponsored Content

In December the $31 billion HOOPP, which has about $5 billion in real eastate, took a 50 per cent stake in the £100 million, St James’s Gateway development, in London W1, together with the adjacent Clydesdale block. Similarly, the Crown Estate will retain the freehold for the blocks and grant the joint venture a new 150-year head lease, and it will also oversee the development and directly asset manage the properties upon completion, which is expected in 2013.

The Crown Estate dates from 1066. After the Norman Conquest, all the land belonged to William “in right of The Crown” because he was King. Despite centuries of change in law and custom, the underlying ownership of The Crown still exists and there is always a presumption in favour of The Crown unless it can be proved that the land belongs to someone else.

The Crown Estate, managing a property portfolio worth £6.6 billion, today contributes more than £210 million to the UK Treasury.

Leave a Comment

Sort content by

Dump cap-weighted indexing for ‘efficient beta’

  The status quo of ‘passive’ equity investment, ranking companies by market capitalisation, is delivering lower returns for higher volatility than a beta strategy which blends a cap-weighted approach with two of its competitors – minimum variance and fundamental indexing. Michael Bailey spoke to Lazard Asset Management’s Asia Pacific chief, Rob Prugue, about a paper co-written

Dump cap-weighted indexing for ‘efficient beta’

The status quo of ‘passive’ equity investment, ranking companies by market capitalisation, is delivering lower returns for higher volatility than a beta strategy which blends a cap-weighted approach with two of its competitors – minimum variance and fundamental indexing. Michael Bailey spoke to Lazard Asset Management’s Asia Pacific chief, Rob Prugue, about a paper co-written

HMC strengthens internal investment support with IT hires

The Harvard Management Company (HMC) is looking to fill 12 new IT positions across trading, risk and portfolio management in a move that strengthens its internal investment support structure even more. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Texas investment pros given room for bigger bonuses

The chief investment officer and senior investment professionals at the $88 billion Teacher Retirement System of Texas can earn up to 125 per cent of their base salary in performance compensation, under a new version of the fund’s pay rules. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Sweden’s AP3 on the hunt for active credit exposures

The $27.3 billion Tredje AP-Fonden (AP3) of Sweden has instituted a search for active fixed income managers to run portfolios of US, European and UK credit. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

No free lunch in asset allocation

In his editorial for the November/December issue of the Financial Analysts Journal, Richard Ennis confidently consigns the term “uncorrelated return” to the scrap heap of asset allocation lingo, reminding readers there is no free lunch in asset allocation, and that in order to collect the risk premium, investors must also bear the risk.mrec4inarticleinline Sponsored Content

Previous