Norges Bank Investment Management has been selected to purchase the West One shopping centre, W1, as it builds its West End portfolio.
The Norwegian sovereign wealth fund fought off competition from Thor Equities to secure a deal for the building, above Bond Street Tube station, from Orchard Street Investment Management. It bid around £245m – a 3.4% yield.
The three-level centre at 381 Oxford Street sits on a 0.75-acre site comprising 47,000 sq ft of shops let to tenants such as McDonald’s, Boots and Marks & Spencer, and 44,500 sq ft of under-rented offices.
The deal will take Norges’ total investment in UK property to £2.7bn, most of which has been via joint ventures with established UK operators.
But the fund, which has only been permitted to buy property since 2010, remains well short of its target real estate allocation.
As of 31 March, it had invested £12.3bn in property globally, which is less than half of the £28.2bn target based on its current AUM of £564bn.
Sources said Norges was continuing to target the core West End market, where it has a large portfolio, seeking assets adjacent to existing holdings.
West One – which is set to benefit from the opening of Crossrail in 2018 and is earmarked for refurbishment – will be Norges’ most management-intensive solo UK venture to date.
BNP Paribas Real Estate senior director Gregor Wallace said: “Norges has taken on a few people to gear up for a much more active role.”
JLL advised the vendor; CBRE acted for Norges.
Norges’ UK portfolio
2011 Makes property debut with £452m purchase of a 25% stake in the Crown Estate’s Regent Street portfolio
2012 Buys 50% stake in Meadowhall shopping centre in Sheffield for £750m
2013 Extends Crown jv with the purchase of a 25% stake in Quadrant 3 scheme for £97.5m
2014 £343m purchase of a 57.8% stake in the 43-asset Pollen Estate
2014 £582.5m purchase of Merrill Lynch Financial Centre at 2 King Edward Street, EC1, in its first solo deal
2015 £190m purchase of Queensberry House, W1
2015 Buys West One for £245m
