government pension fund global · annual relative return table 6. property returns measured against...
TRANSCRIPT
Government
Pension Fund
Global
Real estate investments
2018
Oslo, 3 May 2019
1
2
3
RESULTS
INVESTMENTS
REAL ESTATE MANAGEMENT
1.1 CEO Letter __________________
1.2 Investing in real estate _________
3.1 Investment process ____________
3.2 Risk management _____________
3.3 Valuations ___________________
2.1 Investments in Europe__________
2.2 Investments in the US __________
2.3 Investments in Asia ____________
1.3 Key figures __________________
4INCOME AND COSTS
4.1 Income _____________________
4.2 Costs _______________________
4.3 Cash flow ___________________
11
12
23
27
35
42
47
50
56
60
63
68
3
7.5% 106billion kr
2014
219billion kr
2017
246billion krmarket value 2018
191billion kr
2016
180billion kr
2015
Investments in
unlisted real estate
returned 7.5 percent
in 2018
9.3 billion kr
net rental income
3.0 percent
of the fund
737 properties
in portfolio
RESULTS
4
4.4 4.1 3.7 3.7 3.6
2014 2015 2016 2017 2018
Income return
Annual return on real estate investmentsReturn measured in the fund’s currency basket. Percent
5
4.4 4.1 3.7 3.7 3.6
7.16.7
0.7
3.8 4.1
2014 2015 2016 2017 2018
Capital return
Income return
Annual return on real estate investmentsReturn measured in the fund’s currency basket. Percent
6
4.4 4.1
3.7
3.7
3.6
7.16.7
0.7
3.8 4.1
-0.8 -0.2 -0.2 -0.2-0.2
-1.0
0.1
-2.5
0.1
-0.1
2014 2015 2016 2017 2018
Currency effect
Transaction cost
Capital return
Income return
Total return
Annual return on real estate investmentsReturn measured in the fund’s currency basket. Percent
7
9.610.8
1.7
7.57.5
Annual relative returnTable 5. Return on unlisted real estate and funding return, measured in
the fund’s currency basket. Percent
8
2018 2017 2016 2015 2014
Return unlisted real estate 7.5 7.5 1.7 10.8 9.6
Funding portfolio -2.1 6.8 4.2 0.6 7.6
Return difference to funding portfolio 9.6 0.7 -2.5 10.2 2.0
Note: Funding portfolio was fixed income until 2016 and a mix of equities and fixed income thereafter.
Annual relative returnTable 6. Property returns measured against MSCI Annual Global
Property Index, measured in local currency. Percent
9
20182 2017 2016 2015 2014
Property return on unlisted real estate investments 7.9 8.4 5.6 10.6 11.4
MSCI Annual Global Property Index1 n/a 8.3 7.7 10.9 10.1
MSCI Annual Global Property Index, portfolio weights n/a 8.6 6.9 11.6 11.4
Return difference to MSCI Global n/a 0.1 -2.1 -0.3 1.2
Return difference to MSCI Global, portfolio weights n/a -0.2 -1.3 -1.0 0.0
1 Adjusted for transaction costs
2 MSCI figures for 2018 were not available at the time of print
Change in market valueChart 8. Billions of kroner
10
2199 11
7 1 246
0
50
100
150
200
250
300
0
50
100
150
200
250
300
Annual real estate investmentsChart 9. Billions of kroner
11
-2 -1
-5
1115
19
37
44
19
1513
-10
0
10
20
30
40
50
-10
0
10
20
30
40
50
2011 2012 2013 2014 2015 2016 2017 2018
Acquisitions
Disposals
Net investments
THE INVESTMENTS
12
0
10
20
30
40
50
60
70
0
10
20
30
40
50
60
70
Office Logistics Retail Other
The real estate portfolio at 31.12.2018Chart 1 and 2. Percent
13
0
5
10
15
20
25
0
5
10
15
20
25Office and retailSector
30 Warwick Street, London
2018 Acquisition Europe
14
Sector Office
Ownership 25%
Invested capital 28.8 million pounds
Area 7,000 sqm
LONDO
N
LONDON
30 Warwick
2018 Acquisition Europe60 Holborn Viaduct, London
15
Sector Office and retail
Ownership 100%
Invested capital 321.3 million pounds
Area 22,000 sqm 60 Holborn
LONDON
2018 Acquisition Europe54-56 rue la Boétie, Paris
16
Sector Office
Ownership 100%
Invested capital 415.5 million euro
Area 20,400 sqm
PARIS
54-56 rue la Boétie
2018 Acquisition Europe79 Champs Elysées, Paris
17
Sector Office and retail
Ownership 100%
Invested capital 613 million euro
Area 10,300 sqm
PARIS
79 Champs Elysées
Europe2018
1
18
Acquisitions Office and retail
Office and retail
Total deals 4
Total assets 4
Total acquisition price 350.1m GBP
1,028.5m EUR
Logistics
Total deals -
Total assets -
Total acquisition price -
Acquisitions Kroner
30 Warwick Street 0.3 billion
60 Holborn Viaduct 3.4 billion
54-56 rue la Boétie 4.0 billion
79 avenue des
Champs-Elysées
6.0 billion
Disposals Kroner
Meudon Campus 1.2 billion
SZ Tower 1.2 billion
31-33 rue de Verdun 0.6 billion
1Announced acquisitions and disposals
Disposals
Office and retail
Total deals 3
Total assets 3
Total disposal price 313.4m EUR
Logistics
Total deals 3
Total assets 23
Total disposal price 155.7m EUR
Boston
19
33 Arch Street
One Beacon Street 100 Federal Street
280/290 Congress Street
One Financial Center
2018 Acquisitions US: Boston
20
121 Seaport Blvd501 Boylston Street
2018 Acquisition US501 Boylston Street, Boston
21
Sector Office and retail
Ownership 49.9%
Invested capital 180.7 million dollars
Area 57,000 sqm
BOSTON
501 Boylston
2018 Acquisition US121 Seaport Boulevard, Boston
22
Sector Office
Ownership 45%
Invested capital 204.8 million dollars
Area 37,000 sqm
BOSTON
121 Seaport
Acquisitions
Office and retail
Total deals 2
Total assets 2
Total acquisition price 385.5m USD
Logistics
Total deals 4
Total assets 5
Total acquisition price 123.5m USD
United States2018
1
23
Office and retail
Acquisitions Kroner
501 Boylston Street 2.5 billion
121 Seaport Boulevard 1.7 billion
Disposals Kroner
470 Park Ave. South 1.0 billion
1Announced acquisitions and disposals
Disposals
Office and retail
Total deals 1
Total assets 1
Total disposal price 122.3m USD
Logistics
Total deals 3
Total assets 52
Total disposal price 323.7m USD
Management costsCosts in Norges Bank Real Estate Management and subsidiaries
24
0
50
100
150
200
250
300
0
0.1
0.2
0.3
0.4
0.5
0.6
2011 2012 2013 2014 2015 2016 2017 2018 B2019
Bn
NO
K
Perc
en
t
Average AUM (RHS)
Total management costs (LHS)
Management costs in NBREM, excludingsubsidiaries (LHS)
9.3
12.7BILLION KRONER IN
NEW INVESTMENTS
16INVESTMENT PARTNERS
737PROPERTIES
246
BILLION KRONER IN
NET RENTAL INCOME
BILLION KRONER
IN UNLISTED REAL
ESTATE
95.3OCCUPANCY RATE
Government
Pension Fund
Global
Real estate investments
2018