Oil fund to focus on Asian property

The State Oil Fund of Azerbaijan, the third-largest crude supplier in the former Soviet Union, will focus on Asia for its real estate acquisitions after buying property last year in London, Paris and Moscow.

Sofaz, as the fund is known, has about US$1 billion earmarked for commercial real estate in South Korea, Japan, China and Singapore, deputy executive director Israfil Mammadov said in an e-mail last week. Sofaz also planned to continue buying gold, he said.

"We are currently evaluating a number of opportunities in various Asian countries," Mammadov said. "We are hopeful that some of these investments will be made this year."

Created in 1999 to manage the Caspian Sea nation's oil and gas wealth, Sofaz had US$34.7 billion of assets on July 1, equal to almost half of the country's economy.

The government broadened the fund's mandate last year and can now hold as much as 5 per cent of its assets in real estate. Sofaz in December bought the Gallery Actor business and shopping centre in central Moscow for US$133 million. That followed the purchase of an office complex in London's West End for £177 million (HK$2.2 billion) and a retail property in Paris for €135 million (HK$1.42 billion).

"Europe, and London in particular, will always remain a target for us with its deep, liquid and transparent market," Mammadov said.