Azerbaijan’s SOFAZ purchases real estate in Italy

By Gulgiz Dadashova

Azerbaijan’s oil fund SOFAZ jointly with the sovereign-wealth funds of Abu Dhabi and Qatar agreed to invest a combined 350 million euros ($380 million) to buy and develop three separate properties in Milan.

SOFAZ is buying a building from the Italian chamber of commerce, while the Abu Dhabi Investment Authority is buying a 1960s building that will be demolished to make way for a new tower, the Wall Street Journal reported citing a person familiar with the transactions.

The Qatar Investment Authority agreed to buy a property from BNP Paribas SA in late December. The purchase prices weren’t disclosed.

The 350 million euros includes the cost of redeveloping the three sites. All three will be managed by Italian property company Coima SGR, the source said.

In late December 2015, SOFAZ announced about the changes in the structure of its investment portfolio for 2016.

In 2016, up to 15 percent of the investment portfolio may be invested in equities, up to 10 percent - in real estate, up to five percent - in gold. In 2015, this ratio was 10, 5 and 5 percent, respectively.

Some 70 percent of the total value of the investment portfolio of SOFAZ is formed from money market instruments and debt market, while this year the figure was 80 percent.

The currency structure of SOFAZ investment portfolio remained unchanged. Thus, 50 percent of assets may be placed in US dollars, 35 percent - in euros, five percent - in British pounds, and the remaining 10 percent - in other currencies.

The projected total cost (average weighed volume) of SOFAZ investment portfolio for 2016 has been set at 51.3 billion manats ($33billion).

SOFAZ was established in 1999 with assets of $271 million. Based on SOFAZ's regulations, its funds may be used for the construction and reconstruction of strategically important infrastructure facilities, as well as solving important national problems.

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