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OSLO, March 13 (Reuters) - London overtook New York as the top destination last year for unlisted real estate investments by Norway's $1 trillion wealth fund, which is focusing on ten global cities it expects to grow in terms of numbers, employment and trade.
The Norwegian fund is one of the biggest foreign investors in Britain, including as a co-owner of London's Regent Street, and says it will keep on investing for the long-term regardless of the country's vote to leave the European Union.
"Having adjusted in the six to nine months following the Brexit vote, office rents remained stable or improved in most London submarkets," the fund said in a report on Tuesday.
Norway's fund funnels the revenues from its oil and gas production into stocks, bonds and real estate and its target is to invest up to 7 percent of its value in unlisted real estate. Its investments in such properties corresponded to 2.6 percent of overall assets at the end of last year.
The report by the fund, which has properties on the Champs-Elysees in Paris and Hudson Square in New York, showed London, New York and Paris accounted for 22.8 percent, 21.5 percent and 19.1 percent of its unlisted property investments in 2017.
New York, was first in 2016, followed by London and Paris, accounting for 19.2 percent, 17 percent and 13.1 percent respectively of the fund's investments.
In 2017 the fund bought stakes in prime real estate in central London including a 25-percent stake in 10 Piccadilly, 263-269 Oxford Street and 1-4 Princes Street with the rest owned by the Crown Estate. The fund also increased its 25 percent stake in 20 Air Street to 50 percent.
"Central London office investment transactions rose 30 percent in 2017 despite economic uncertainty. Transaction volumes ended at around 15 billion pounds, which was a return to the average level seen in the five years prior to the Brexit vote," it said.
The fund made its first unlisted real estate investment in Asia, in Tokyo in December, and has looked into doing so in Singapore.
It invested 15 billion Norwegian crowns ($1.94 billion) in unlisted real estate in 2017, taking its total holdings to 219 billion crowns. ($1 = 7.7513 Norwegian crowns) (Reporting by Gwladys Fouche, editing by Terje Solsvik and Alexander Smith)