Baku, Azerbaijan, Feb. 20
Trend:
The State Oil Fund of the Republic of Azerbaijan (SOFAZ), the Caspian Sea nation's sovereign investment fund, intends to nearly double its real estate holdings from $2 billion to take it up to 10 percent of total assets of some $36 billion, SOFAZ deputy CIO and head of real estate Ruslan Alakbarov told French Business Immo Europe agency.
"The fund invests both directly and indirectly in property. Its European assets, which make up about 44 percent of total property allocation, currently amount to 5.3 percent of all assets of the fund. These are split 27.3 percent on the continental mainland Europe, and 16.6 percent in the UK. For its indirect investments, the firm allocates to private non-listed funds and has no holding in listed vehicles," Alakbarov said in an emailed interview.
"We concentrate our efforts on the biggest and most liquid markets, the so-called 24-hour cities, and try to buy high-quality assets with attractive net operating income (NOI) growth potential," Alakbarov said.
"These markets appeal to millennials who want to live, play and work in the most dynamic cities, thereby creating job growth which in turn leads to higher demand for real estate," he added.
With holdings only in western Europe and none in central or western Europe, SOFAZ favors office, residential and logistics as asset types, according to him.
"Demand for logistics is set to grow in line with growth in e-commerce sales, which is estimated to expand by 11 percent year on year until 2020," Alakbarov concluded.
As of January 1, 2018, SOFAZ’s assets increased by 8.02 percent as compared to early 2017 ($33.147 billion) and amounted to $35.807 billion.