Photographer: Chris Ratcliffe/Bloomberg

Norway Wealth Fund Buys $345 Million London Oxford St. Building

Norges Bank Real Estate Management acquired an office and retail building on Oxford Street, the U.K.’s busiest shopping street, from Great Portland Estates Plc for 276.5 million pounds ($345 million).

The property is leased in advance of its completion next year to New Look, Benetton and Moneysupermarket.com Group Plc, Great Portland said in a statement. The yield on the purchase is 3.2 percent.

Norway’s sovereign wealth fund, the world’s largest, returned 4 percent in the third quarter even as the government withdraws money for the first time to cover budget needs. In July, the fund bought a building on the same side of Oxford St. for 124 million pounds from an Aberdeen Asset Management Plc property fund.

“Oxford Street has been an exceptional project for us and this sale continues our strategy of recycling capital out of assets where we have created significant value,” Great Portland Chief Executive Officer Toby Courtauld said. “This sale crystallizes a whole life capital return of 75 percent and an annualized unlevered internal rate of return of 28.4 percent.”

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