SOFAZ Embarks on London Real Estate

The State Oil Fund of the Republic of Azerbaijan (SOFAZ) purchased their first property investment in London’s West End for £177.35. SOFAZ bought 78 St James’s Street, an office complex, from RREEF Real Estate, the real estate investment arm of Deutsche Bank’s Asset and Wealth Management division. The St. James’s part of London is trendy with private wealth managers and hedge funds. The 188,600 square foot building is entirely leased to HSBC Bank with a net initial yield is 4.5%.

From their press release, Shahmar Movsumov, Executive Director of SOFAZ commented: “Sovereign Wealth Funds across the globe are looking for ways of diversifying their risks by expanding their investments beyond traditional asset classes. For the last decade SOFAZ has been growing rapidly both in terms of the size of the assets under management and its investment universe. Today I am delighted to announce SOFAZ’s first direct real estate investment. This newly acquired office building in London is the first in a row of planned property acquisitions in prime business districts of major cities around the world. The secure income that this type of investment will generate over the years coupled with strong fundamentals of prime office spaces in major world capitals are the determining factors in our investment rationale.”

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