NBIM's acquisition of a 25% interest in London's Regent Street from the Crown Estate in 2011, marking the Norwegian wealth fund's first direct deal in the UK, has won the top retail spot in PropertyEU's Deal of the Decade Awards.
In 2011 Norges Bank Investment Management (NBIM) bought a 25% interest in Regent Street, the shopping street that runs from Piccadilly Circus to Oxford Circus in London, from the Queen’s Crown Estate for £452 mln. CBRE acted as advisors to the seller, while JLL advised the buyer.
Jury comment
The judges described the deal as ‘a game changer’ for the broader European real estate industry because of its size, timing, complexity and positive outcome.
The deal was all the more remarkable because it was NBIM’s first direct deal in the UK market, done as soon as the Norwegian government gave permission for the state pension fund to invest in real estate. According to the jury, NBIM showed ‘great timing’ in gaining exposure to a ‘unique portfolio’ and sealing a deal with a strong local player. ‘The deal is transformational for the buyer and the seller: it offered a great entry to NBIM in the direct UK real estate market and allowed the Crown Estate to focus on its new developments.’
The deal was also innovative as it established confidence in high-street investment, a non-traditional asset type for a SWF at the time. It was also a positive example of a public-private partnership which has led to the regeneration of a huge asset. The status of Regent Street as one of the great luxury retail destinations in Europe has been secured.
1ST RUNNER-UP
In 2015 AXA, in joint venture with Unibail-Rodamco, acquired Ruhr Park in Bochum, Germany, from Perella Weinberg for €660 mln. Cushman & Wakefield acted as adviser to both the buyer and seller.
The judges described it as a ‘state-of-the-art’ deal which showed perfect timing as well as ‘structuring expertise’ by the best-in-class shopping centre owner/operator in Europe, with great value creation potential. It was also an innovative deal for Germany in terms of both its volume and the JV structure, as only 50% of the centre was sold.
2ND RUNNER-UP
In 2012 Morgan Stanley Real Estate Fund VII acquired the Metropolis Shopping Center in Moscow for $1.7 bn from Capital Partners. JLL acted as adviser to both the buyer and seller. The jury described the deal as remarkable for its price and size relative to the market, a deliberate bet and a clear vote of confidence in the Russian market which served to attract new class A investors to Russia.
The deal was transformational for the risk-taking buyer, as Morgan Stanley became one of the major players in Moscow, but also marked a significant leap for the Russian commercial real estate market. The judges also highlighted the large volume, complex structuring and good execution of the deal, with a JV in place at completion.
