The world’s largest sovereign wealth fund is expanding its real estate portfolio. Government Pension Fund Global has an $884 billion portfolio, and it only invests in stocks, bonds, and real estate. Because of its size, the fund is looking to change its current investment approach and seek longer-term investments that offer better returns. Over the next three years, approximately 1% of its assets, or $9 billion, will be allocated for investments in the private real estate market. The fund is actually authorized to utilize up to 5% of its assets for such investments, and it seems that it may be gradually heading in that direction.
Thus far, the fund has real estate investments in New York’s Times Square, Paris’s Champs Elysees, and London’s Regent Street. With respect to additional real estate investments in the United States, the fund is planning to concentrate in the cities of New York, Washington, D.C., and Boston. However, the fund is also interested in exploring real estate investments in other “global cities.” The definition of global city may be subject to interpretation, but we certainly think of Miami as a global city, and recent trends suggest that its international appeal is exploding.
Norway, we certainly hope Miami is a global city under consideration! The Miami real estate market has just as much to offer as New York, Paris, and London, and it’s rather inexpensive comparatively speaking. Although we may be a bit biased, we certainly think that Miami Beach’s Lincoln Road rivals the aforementioned commercial districts in those other international cities.