Azeri sovereign wealth fund plans to plough $1bn into international real estate

By bne IntelliNews April 26, 2013

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Azerbaijan's sovereign wealth fund is planning to invest around $1bn in international real estate in 2013, as it aims to diversify its portfolio, a senior official stated on April 25.

The State Oil Fund of the Azerbaijan Republic (Sofaz), which started investing into foreign real estate in December, is looking mainly to invest in Asian and Australian real estate, Executive Director Shakhmar Movsumov told Reuters.

The $34bn fund, which accumulates revenue from Azeri oil and gas exports, put around $600m into real estate in 2012. Sofaz made its first international real estate investment with the GBP177.35m purchase of an office complex in St James Street, London. This was followed by investments in Paris and Moscow.

However, the focus has now shifted, the official says. "We are more interested in Asia now, and we may invest about $1bn in buying commercial property in this region in 2013," Movsumov said.

Sofaz is looking at countries including Singapore, China, Japan and South Korea. Australia is also of interest as the country has "the same growth speed as countries in Asia, and a European transparent institutional environment for commercial operations," he added.

The drive into property is part of Sofaz' strategy to diversify its asset base. On closing the initial deal in London, Movsumov announced that the investment was "the first in a row of planned property acquisitions in prime business districts of major cities around the world."

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