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

KIC partners with Australian, Malaysian sovereign peers

South Korea’s sovereign wealth fund (SWF), the $25 billion Korea Investment Corporation (KIC), has signed cooperation agreements with Queensland Investment Corporation (QIC) and Malaysia’s Khazanah Nasional Berhad to share resources and pursue investments with the government-owned entities. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

FRR completes review, reduces equities

France’s pension reserve fund, the €28.9 billion ($40.6 billion) Fonds De Reserve Pour Les Retraites, has completed a strategic asset allocation review that began last January, resulting in a dramatic reduction in equities. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

CalPERS limits derivatives use

In line with its recently-approved leverage policy, the $181 billion fund for Californian public employees, CalPERS, has reviewed its derivatives policy for global equities, with notional leverage constrained to a new limit of 10 per cent of the value of the global equities portfolio. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

The marginal investor: thoughts from the edge

Getting past past performance In his top1000funds.com blog on outlying investment issues, Jack Gray Adjunct Professor of Finance at the Paul Woolley Centre for Capital Markets Dysfunctionality at the University of Technology, Sydney, contemplates the allure of past performance. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

CFA members vote on short selling rules

As the Securities and Exchange Commission (SEC) ponders various alternative rules on an appropriate limit on short selling in distressed markets, a survey of members by the CFA Institute Centre for Financial Market Integrity shows the least preferred method is a ban on short selling in a particular security for the remainder of the day

ESG progress for large funds: USS

The £23 billion ($37.7 billion) Universities Superannuation Scheme is the UK’s second largest pension fund and a signatory to the UN’s Principles for Responsible Investment. Kristen Paech talks to the fund’s co-head of responsible investment, David Russell, about the role institutional investors are playing in effecting environmental, social and governance change. mrec4inarticleinline Sponsored Content scnative1

Previous