Norges Bank Investment Management (NBIM) is unlikely to start its much anticipated property investment programme until next year, but fund managers are split over whether they have missed out on good market opportunities.

The Norwegian Government Pension Fund Global, has been preparing to add a 5 per cent long-term allocation to the asset class to its NKr2,763bn (e347.4bn) portfolio for more than five years.

But the change in legislation enabling this shift in investment strategy did not take effect until March this year. NBIM, the manager of the fund, has only recently begun a concerted push to bring the necessary expertise on board.

The group is in the process of hiring a real estate compliance officer, to answer to Karsten Kallevig, who starts as head of real estate in September. The one-time Grove International Partners Japan office chief will work in NBIM’s Oslo office, casting doubts over the future of London-based Paul Golding, who joined from Merrill Lynch in 2007 to prepare the fund for property investment.

NBIM remains tight lipped over Mr Golding’s future, but the advertisement for compliance officer does allow whoever is hired to work from London or Oslo. However, the time lag before Mr Kallevig starts, coupled with the fact that senior hires are still to be made, indicates that the fund is unlikely to start buying property this year.

But in nrpn’s quarterly investment survey (see pages 14-15), nearly half of the pension funds polled from across the Nordic region pledged to increase their property exposures in the next six months. Such a significant proportion of the region’s pension funds looking to increase their property allocations raises questions as to whether NBIM should have been ready to start picking up real estate when its value was greatest.

Pertti Vanhanen, head of direct property, Europe at Aberdeen Asset Management, says getting into the market now would be “perfect timing”, but warns: “On the other hand, if they are not fast enough to establish the organisation, maybe they will lose the momentum of this cycle.”

He adds that the property fund industry should be positive on the giant new entrant to the sector, and be prepared to compete for its business.

“The competition is strong, but we are doing our best to get our share of the assets. We have a lot of different institutions investing in our funds and I think we already have very good clients and investors on board,” Mr Vanhanen says.

Ubbe Strihagen, property director, Nordics, at Schroders, disagrees that NBIM will be disadvantaged by coming late to the global property rally, sounding a note of caution over whether returns are set to continue growing.

“Real estate has been quite volatile,” he says. “People can always debate market timings, but the volume NBIM will be spending on property will take years to get out into the market. It is not going to spend around $20bn (e16.8bn) in less than three to five years and it would not be a very wise decision to try to force such an enormous amount of money into the market in any one given year or so.”

He agrees that other property managers would benefit from the new mega presence, claiming NBIM would create a new market for segregated mandates.

“A lot of fund managers are viewing what the Norwegian government is doing. It is of great interest to the whole property fund industry. We expect NBIM to come to companies looking for new funds to be run on its own terms, rather than simply investing in the funds already out there,” says Mr Strihagen.

NBIM will not comment on its real estate investment strategy until more of its team is in place, but a Norwegian ministry of finance policy document on the subject states that it will aim to “meet or exceed, on a net-of-fees basis, the IPD Global Index plus 150 basis points”.