Norway’s $1tn oil fund has made its first real estate investment in Asia. The world’s largest sovereign wealth fund bought a 70 per cent stake in five buildings in Tokyo’s biggest shopping districts for $828m.

The fund’s new joint venture partner, Tokyu Land Corporation, will acquire the remaining 30 percent and will be responsible for managing the real estate investments in the Japanese capital.

Three of the properties are based in Shibuya, one of Tokyo’s most popular retail locations, while the other two are in Omotesando, where there are many high-end stores.

Karsten Kallevig, head of the fund’s property business, told the Financial Times:

I’m certainly hoping there will be more deals. Tokyo will be one of our focus cities. In that lies an expectation or hope that will grow our presence there.

However, Kallevig added that the fund would remain cautious when it comes to making investments in Tokyo, which he categorised as the world’s biggest single property market.

We will try to be as disciplined in Tokyo as we have been elsewhere. We should only invest if we are convinced it is a good investment according to our strategy, good for the fund in the long time, not being caught doing deals for the sake of doing deals.

The Norwegian oil fund, which started in 1996, has built a real estate portfolio of $25bn in big European and US cities in just seven years.

At first, the fund started buying properties on its own but now looks to find local joint venture partners before making an investment.

The company tends to invest in office spaces and retail buildings in large global hubs.

“We go into this [investing] assuming that everything we buy we will own forever,” said Kallevig.

However, the fund has struggled to invest in Asia, with Kallevig pointing to the company’s inability to find regional partners, the right prices or attractive enough assets.

3 Things That Will Change the World Today

Although the company has offices in Tokyo and Singapore, Kallevig failed to make an investment in Asia when he hoped to two years ago.

“When you enter into a new market, things take a bit longer. There may be things that you are uncomfortable with that you become more comfortable with over time,” he said.

Kallevig said the fund has found it particularly challenging to invest in Singapore partly due to volatile rents:

With pricing and opportunities . . . we have not been able to conclude on anything that for us provides the confidence to start investing there [ in Singapore].

The majority of the fund’s assets are held as shares and bonds.

Just 2.5 percent of its assets are invested in real estate, although Kallevig expects this to go up to 4 percent by the end of 2019.