OSLO (Reuters) - Management at Norway’s $900-billion sovereign wealth fund, the world’s largest, said on Tuesday returns on unlisted property investments may not remain as competitive in the future as they have been recently if interest rates start to rise.

File illustration picture of Norwegian banknotes of different denominations, taken in Trondheim October 31, 2008. REUTERS/SCANPIX Gorm Kallestad

In 2016, the fund invested 19.1 billion crowns ($2.22 billion) in unlisted real estate, lifting its property investments to 191 billion crowns, or 2.5 percent of the fund’s overall value by the end of the year.

The fund is a co-owner of London’s Regent Street and properties on the Champs-Elysees in Paris and Hudson Square in New York.

“Direct property yields are still significantly higher than 10-year government bonds in most of our strategic markets,” said Karsten Kallevig, CEO of the fund’s real estate investment unit, in a report about the fund’s investments in that field.

“However, nominal prices are high and we potentially face a reversal of the yield tightening (on bonds) seen since the financial crisis.”

The fund, which funnels the revenues from Norway’s oil and gas production, invests in stocks, bonds and real estate. In unlisted real estate is focusing on investing in 10 locations, which it considers to be global cities that capture the fruits of globalization.

New York, London and Paris account for 19.2 percent, 17 percent and 13.1 percent respectively of the fund’s unlisted property investments.

Other cities it has properties in include Boston, Washington D.C., San Francisco, Berlin and Munich. It is also looking at targets in Tokyo and Singapore but has yet to make any investments in those locations.

“We will continue to invest without haste and after performing thorough analyses,” Kallevig said.

($1 = 8.5911 Norwegian crowns)