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- November 1, 2014: Vol. 6, Number 10

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SWFs catch the fever: Sovereign wealth funds are boosting their real estate commitments

by Paul Rose

More than two-thirds of the world’s sovereign wealth funds have increased investments in real estate during the past 12 months as they shift from volatile equities and low-yielding bonds to alternatives that offer higher returns. With a technically unlimited time horizon on their investment commitments and a willingness to accept lower yields, the implications for other real estate investors could be significant.

Recent reports suggest that SWFs may soon be increasing their allocations to real estate even more, and one of the world’s largest SWFs, Norway’s NKr 5,478 billion (US$844 billion) Government Pension Fund Global, plans to invest nearly US$9 billion in real estate during the next three years. Norges Bank Investment Management, which invests on behalf of the fund, intends to initially concentrate on core retail and office properties in Boston, London, New York City, Paris, San Francisco and Washington DC, and NBIM is also considering investment opportunities in g

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