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Azerbaijan to Buy Australian Real Estate

Azerbaijan's $34 billion sovereign-wealth fund plans to buy commercial real estate in Australia as part of a strategy to add assets down under.

"We plan to travel to Australia in order to meet with the leading market participants including regulators, developers, asset owners, and overseas investors to gain deeper understanding of the market," said the State Oil Fund of the Republic of Azerbaijan, or SOFAZ.

Azerbaijan is among a growing number of foreign investors seeking out higher returns from commercial real estate in Australia. The sector has outperformed those of most other advanced economies since the depth of the financial crisis in 2008, beaten only by Hong Kong, Singapore and Canada.

"Australia, in our mind, offers the best of the two worlds," said the fund. "Growth dynamics of the Asian countries coupled with strong landlord rights, long tenancy agreements and market transparency of the Western world."

SOFAZ's move into commercial real estate isn't exclusive to Australia. The fund said it has started buying property in major cities such as Paris, London and Moscow, and eventually wants to allocate 5% of its assets to real estate.

"In order to build up a high-quality real-estate portfolio, SOFAZ will continue to invest across major countries and will imminently consider opportunities in the Australian commercial property market," said the fund.

Source: The Wall Street Journal

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