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SOFAZ Purchases Real Estate in London

The State Oil Fund of the Republic of Azerbaijan (SOFAZ) has announced its first real estate investment, with the purchase office complex in London's West End for $288 million. The property is located at 78 St. James's Street.

The seller was RREEF Real Estate, the real estate investment business of Deutsche Bank's Asset and Wealth Management division.

St. James is a well-known location for exclusive office properties within London. The property was built in 1845 and was completely renovated in 2003. The property is approximately 120,000 square feet and is entirely leased to HSBC Bank through 2023 Its annual rental income is $15.7 million.

"Sovereign Wealth Funds across the globe are looking for ways of diversifying their risks by expanding their investments beyond traditional asset classes," said Shahmar Movsumov, Executive Director of SOFAZ. "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."

The State Oil Fund of Azerbaijan, the country's sovereign wealth fund, was established in 1999 by presidential decree as an extra-budgetary entity that accumulates and manages oil and gas revenues. The fund's primary objectives are to help maintain macroeconomic stability in the country and to generate wealth for present and future generations. As of December 1, 2012 assets of SOFAZ totaled $33.9 billion.

Source: APA

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