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Norway’s SWF Makes First Real Estate Investment in the USA

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According to the press release, “The Norwegian Government Pension Fund Global bought 49.9 percent of five office properties in the US, its first investment in the world’s largest real estate market, through a joint venture with TIAA-CREF.

The assets in New York City, Washington D.C. and Boston are valued at $1.2 billion, or about 6.6 billion kroner. TIAA-CREF, the seller, retained 50.1 percent of each property and will manage the buildings on behalf of the partnership. The transaction was completed on Feb. 8.

“This is the fund’s first real estate investment outside of Europe and is in line with our strategy to build a high-quality, global property portfolio,” says Karsten Kallevig, chief investment officer for real estate at Norges Bank Investment Management (NBIM), the fund’s manager. “We are very pleased to team up with a partner that has TIAA-CREF’s knowledge and capabilities, and look forward to jointly developing the venture.”

The properties consist of 1.9 million square feet (172,450 square meters) of rentable space. Two of the properties are located in New York City, two in Washington D.C. and one in Boston. The joint venture will seek to acquire additional office properties, primarily in these three cities.

“As the world’s largest real estate market, the US will be an important part of the fund’s long-term property portfolio,” Kallevig says. “We will initially seek to invest in key east-coast cities.”

The fund made its first real estate investments in 2011 in office and retail properties in London and Paris. It is mandated to hold 60 percent in equities, 35-40 percent in fixed income and as much as 5 percent in real estate.”

Source: Norges Bank Investment Management

Properties:
Washington D.C. (representing 37 percent of the five properties’ gross rentable space): Properties located at 1101 Pennsylvania Avenue and 1300 I Street.

Boston (33 percent of gross rentable space): Property located at 33 Arch Street

New York City: (30 percent of gross rentable space): Properties located at 470 Park Avenue South and 475 Fifth Avenue

Saudi Aramco Contemplates SABIC Stake from PIF

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Oil giant Saudi Aramco is in early discussions on whether to pursue an ownership stake in Saudi Basic Industries Corporation (SABIC) from the Public Investment Fund (PIF). At the moment, Saudi Aramco has no plans to buy publicly-held shares of SABIC. SABIC was founded in 1976 by Saudi royal decree to convert oil by-products into useful chemicals, polymers, and fertilizers.

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SWFI First Read, July 19, 2018

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GIC Eyes Provenance Land

GIC Private Limited is nearing a deal to purchase up to 50% of Provenance Land. Provenance Land owns India’s first Four Seasons hotel.

Eduard van Gelderen Leaves UC Regents for PSP Investments CIO Role

Eduard van Gelderen exited his position as Senior Managing Director at the University of California Regents’ Office of the Chief Investment Officer. His role will not be replaced. He accepted an offer to be Chief Investment Officer of the Public Sector Pension Investment Board (PSP Investments).

PAAMCO Prisma Holdings CEOs to Exit

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Google Fined Big Time by EU Regarding Antitrust Violations

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The European Union (EU), through its competition commissioner, levied a €4.34 billion fine against Alphabet Inc., the owner of Google. The fine is over Google having “imposed illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general internet search,” according to the European Commission (EC).

The European Commission is requiring Alphabet to cease from its conduct that it is accused of within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google’s parent company.

Commissioner Margrethe Vestager, in charge of competition policy, said in a press release, “Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans. Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules.”

The EC press release added, “In particular, Google: 1. has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google’s app store (the Play Store); 2. made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices; and 3. has prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google (so-called “Android forks”).”

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