Norges Bank buys $1bn stake in U.S. real estate portfolio from CPP

Norges Bank Investment Management completed a joint venture with Goodman Group on Jan. 1 and purchased a 45% interest in an existing U.S. logistics real estate portfolio.

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The portfolio comprises 48 buildings in Southern California, New Jersey and Pennsylvania and is valued at $3.3 billion. Norges, which is responsible for the $1.7 trillion Government Pension Fund of Norway, Norges recently announced that it was integrating real assets and equity investments into a single unit.

“We are excited about growing our logistics real estate exposure and entering into a partnership with Goodman,” said Per Løken, global head of Unlisted Real Estate at Norges. “This investment aligns with our long-term strategy, and we think now is a good time to invest.”

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The seller of the portfolio, which also includes $888 million of indebtedness, is the Canada Pension Plan Investment Board (CPP Investments). Goodman already owned 55% of the portfolio and will retain its ownership share. Goodman will also perform the asset management on behalf of the joint venture.

Overall, the logistics portfolio has a total leasable area of 1.3 million square meters and includes five land plots, officials said.

“The portfolio exemplifies high quality buildings in excellent locations,” added Edward Lerum, head of Global Logistics Real Estate at Norges. “We have long-term conviction in the investment, and we also see appealing growth potential, given the restrictions on new supply in these locations.”