The Norges Bank Investment Management will expand beyond traditional joint ventures to include separately managed accounts (SMAs) that give it scalable access to multiple assets under pre-agreed strategies within its real estate portfolio.
According to a press release, in NBIM’s new strategy plan for 2026-2028, direct investments will remain the core of the strategy, with an emphasis on partnerships with high-quality local and sector specialists. It will also rely selectively on platform investments and funds to access specialized operational expertise that would be difficult to build internally for a lean organization.
The broader toolkit will be governed by tighter due diligence and oversight, the fund said, acknowledging that greater use of indirect structures means more delegation of sourcing and management. Additionally, the release highlighted that the governance frameworks will be designed to ensure transparency, cost efficiency, and alignment with the fund’s responsible investment standards, with a continued focus on partner quality and reputation, particularly when entering new sectors in the unlisted portfolio.
Traditional sectors such as offices and retail face long-term pressure from remote work and e-commerce and require more operational involvement than in the past, noted NBIM in the release. At the same time, it noted sectors including residential, logistics, data centers and life sciences have become investable at scale for large institutional investors. The fund said broadening its sector, geographic and structural scope will allow it to better exploit its defining characteristics and gain access to the best opportunities across markets.
Over time, the fund plans to move toward a more balanced real estate portfolio, with office, retail, logistics and housing each expected to represent between 15% and 35% of exposure, with other emerging sectors accounting for 10% to 25%. Sector diversification has “proven important,” the fund said, as property markets experience rapid shifts. NBIM’s geographic allocations will remain flexible, with North America at 30% to 70%, Europe at 20% to 60%, Asia Pacific up to 15% and emerging markets up to 10%, driven primarily by asset and sector fundamentals.
Real estate sits outside the benchmark index set by the Ministry of Finance and forms part of the fund’s active management. “The purpose of active management is to exploit the fund’s defining characteristics and advantages to achieve excess returns over time,” the release outlined. The fund plans to allocate between 3% and 7% of assets to real estate, a level it believes will “maximize fund returns after costs” while improving the long-term trade-off between risk and return. Those advantages include scale, reputation, and a long-term capital base.
The fund will also integrate its listed and unlisted real estate strategies, reflecting research showing that return differences between the two fade over time. Its long horizon makes it well placed to absorb higher short-term volatility in listed holdings, while systematically assessing whether listed or unlisted assets offer the most attractive risk-adjusted returns after accounting for liquidity, costs, and resources.
Responsible investment remains central to NBIM’s approach. The fund said climate risk “represents financial risk that directly impacts our real estate portfolio” and reaffirmed its commitment to net-zero emissions by 2050 for properties it owns, with a 40% cut in operational carbon intensity by 2030.
As it expands into indirect structures, it will integrate sustainability criteria into manager selection, require climate data that meets its direct investment standards, and mandate regular energy and decarbonization reporting, using its scale to influence partner practices.
