OSLO | Thu Dec 20, 2012 10:48am EST
OSLO (Reuters) - Norway's sovereign wealth fund has bought a 1.2-billion-euro ($1.6 billion) stake in a portfolio of industrial real estate from warehouse owner Prologis (PLD.N), as it ramps up it's still small property investments.
The $685 billion fund, built up from surplus oil and gas revenue, bought a 50 percent stake in the portfolio, which includes 195 properties, primarily distribution facilities, in 11 European countries.
Prologis will retain the remaining 50 percent stake and will manage the units, the two investors said on Thursday.
"The venture may grow through acquiring strategic portfolios in target markets and, where appropriate, properties that complement the existing asset base," Prologis said.
"This joint venture is a significant milestone for Prologis, as it completes our European recapitalization ahead of schedule," Prologis co-chief executive Hamid R. Moghadam added.
As part of the deal, the wealth fund will receive a warrant to acquire 6 million shares of Prologis common stock based on the closing price of $35.64 per share on Wednesday, the two said.
The wealth fund, which holds over $135,000 for each of Norway's 5 million residents, has been cautiously building its real estate portfolio and so far focused on posh shopping and office properties in large urban centers.
At the end of the third quarter it held less than 1 percent of its assets in real estate, below a 5 percent goal, and predicted it would take years before it would reach the planned level.
The fund is forecast to grow to $1.1 trillion by 2020, indicating it could hold $55 billion in real estate by then.
It has been buying property in Europe only, but said it hoped to receive a government mandate to start buying in the United States as well.
Its newly purchased portfolio will include properties in France, Britain, Spain, Poland, Italy, Czech Republic, Hungary, the Netherlands, Germany, Sweden and Belgium.
(Reporting by Balazs Koranyi; Editing by Mark Potter)
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