Norway’s sovereign wealth fund manager continues to pile tens of millions into Boston real estate with its latest acquisition being a life sciences campus that is in the early stages of development.
This week, Norges Bank Investment Management (NBIM), which manages the US$1.4 trillion Government Pension Fund Global (GPFG), acquired a 45% stake in two Boston life sciences properties in joint venture with Boston Properties.
The investment consists of two life sciences properties, which are under development or redevelopment. Upon completion, the venture is projected to be worth US$1.66 billion, with NBIM providing US$746 million in capital.
Mie Holstad, Chief Real Assets Officer at NBIM, said, “We are very pleased to grow our portfolio in Greater Boston. The investment aligns with our long-term strategy, and we are delighted to strengthen our partnership with BXP in a sector where we have high conviction.”
NBIM’s past acquisitions in Boston real estate include:
41% stake worth US$486 million in a life science property located at Binney Street in a JV with Metlife and Alexandria Real Estate Equities, acquired in December 2021.
47.5% stake worth US$392 million for the One Memorial Drive officer block in a JV with Metlife, acquired in August 2021.
45% stake worth US$205 million in an office property at 121 Seaport Boulevard in a JV with American Realty Advisors, acquired in October 2018.
49.9% stake worth US$291 million in a mixed-use office and retail property located at 501 Boylston Street in a JV with TH Real Estate, acquired in August 2018.
45% stake in the Atlantic Wharf Office Building and 100 Federal Street in a JV with Boston Properties that also includes a property in New York, with NBIM’s share valued at US$1.5 billion, acquired in September 2014.
47.5% stake worth US$122 million in the One Beacon Street office block in a JV with MetLife, acquired in July 2014.
NBIM is not the only state-owned investor with an intense interest in Boston’s real estate market, with a heavy emphasis on the city’s life sciences sector. According to a recent report by CommercialEdge, 89% of all new office construction in the city is dedicated to lab space, although there is growing concern the market is oversupplied amid a slowdown in biotech investment.
Canadian public pension funds have been particularly active in the market. In September, CDPQ’s subsidiary Ivanhoé Cambridge and its JV partner Lendlease completed construction of a US$545 million life sciences campus located at Guest Street in Boston Landing, worth US$545 million. PSP is also investing in life science buildings, backing 400 Summer Street, a new state-of-the-art life science tower in Boston’s Seaport District, in a JV with KKR and WS Development. CPP teamed up with Singapore’s sovereign wealth fund GIC in July 2021 to establish a US$1 billion real estate platform targeting Boston and other US cities. OMERS’s real estate subsidiary Oxford Properties has a portfolio of office buildings in the city, worth around US$1 billion.
