BAKU, Azerbaijan, July 31. TheChamber of
Accounts has advised the specific assessment of real estate
investment yield to the State Oil Fund of Azerbaijan (SOFAZ).


This is reflected in the Chamber's report on the results of the
audit of the formation and use of SOFAZ funds in key areas.


According to the report, the fund was recommended to separately
monitor returns by asset class and assess the actual economic
efficiency of its investments, taking into account that the
profitability of the fund's real estate sub-portfolio was driven by
the reclassification of infrastructure investments.


The report noted the necessity to assess the compliance of the
profitability of private equity and real estate sub-portfolios with
the accepted risk level and investment objectives.


In this regard, the Chamber of Accounts considered it
appropriate to apply adequate comparison criteria (benchmarks) to
assess the performance of relevant sub-portfolios and monitor
development trends, to serve as an objective assessment of the real
profitability of the portfolio, to maintain a balance between
transfer obligations to the state budget and investment strategy,
as well as to improve liquidity management mechanisms.


According to the report, as of December 31, 2025, the total
value of SOFAZ's investments in real estate complexes amounted to
$4.7 billion.


The fund's real estate portfolio includes an office complex at
78 St. James's Street in London's West End, the "Gallery Actor"
office and shopping center in Moscow, a real estate complex at 8
Place Vendôme in Paris, and a shopping center in Tokyo.







In addition, the portfolio includes investments through PGIM,
PAG, E-Shang Redwood, Gaw Capital, Blackstone, BlackRock, Walton
Street, Ares, BentallGreenOak, Starwood, Angelo Gordon, Prologis,
Brookfield, EQT, Global Infrastructure Partners (GIP), and other
international funds, as well as investments in "Azerbaijan Rigs"
LLC, the renewable energy project of Enfinity Global, and a number
of joint investment projects.


During the audit, it was determined that as a result of the
reclassification of assets in 2025, investments in the amount of
$571.1 million, previously recorded in the equity sub-portfolio,
were transferred to the real estate sub-portfolio and grouped
separately under the name "Infrastructure investments".


In the reporting year, a 10.8% return was achieved on these
investments, as a result of which the overall profitability of the
real estate sub-portfolio was formed positively.


However, the Chamber of Accounts noted that, excluding the
impact of infrastructure investments, the actual profitability of
the real estate sub-portfolio was minus 0.02%, and the
profitability of joint investments was minus 9.1%.


According to the audit results, although the reclassification of
assets improved overall profitability indicators, the performance
indicators of the existing real estate and joint investment
segments, which constitute the main part of the portfolio, remain
weak.


According to the report, as of December 31, 2025, the share of
direct investments in the real estate sub-portfolio was 15.3%. The
profitability of these investments, excluding the exchange rate
difference, was 5.2%.