Commercial property sector set to benefit from Norway's oil fortune

Norway is said to be sitting on roughly £240bn worth of profits made from its gas and oil reserves, and now it has been reported that the country plans to invest some of this wealth in the UK's commercial property industry in the latter half of 2009.

The executive director of Norges Bank Investment Management - the division of Norway's central bank which oversees the country's sovereign fund, has confirmed that the UK will be among the first property markets which the country will enter into as part of its plan to invest approximately £14.5bn in real estate over the forthcoming years.

Speaking about the firm's choice to invest in UK commercial property, Yngve Slyngstad said that, in order to protect the company's investment, Norges Bank Investment Management endeavour to look for "markets with transparency and a good legal system".

There are plans to increase the amount which Norway's sovereign wealth fund invests in equities to 60%, and Mr. Slyngstad wants 5% of this amount to be invested in real estate.

The fund, which is called the Government Pension Fund – Global, was set up in order to manage Norway's wealth after it discovered oil in the North Sea 40 years ago. Mr. Slyngstad emphasised that the fund invests for the long term.

Source: Telegraph.co.uk | Last updated: 13th March 2009

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