|
Government
of Singapore Investment Corp. (GIC) is a significant global real estate
investor. GIC has property assets of more than US$10 billion under
management which is about 10% of its total assets of US$100 billion.
GIC and Temasek
operate through various vehicles. We have been fortunate to have
facilitated opportunities to this group and have direct linkages
Government of Singapore Investment Corp. is among a handful of
cash-rich buyers seeking to buy Grosvenor House Hotel, a London
landmark, from the Royal Bank of Scotland, people familiar with the
matter
- WSJ
2010 June 1
GIC recognises big loss in US property
project
The Government of Singapore Investment
Corp (GIC) has written down most of its US$675 million investment in a
giant New York apartment complex that was bought at the height of the
property boom in the United States but which has since suffered from the
collapse of the housing market there.
The joint owners of Stuyvesant Town and
Peter Cooper Village defaulted on their debts last Friday, following a US
court ruling that dealt the project a death blow last October. It had been
struggling for months as it failed to deliver the hoped-for returns amid
the US economic recession.
GIC had invested US$575 million in a
so-called mezzanine loan backed by the property - a subordinated loan that
sits between ordinary debt and equity - and US$100 million in an equity
stake.
BT understands that the entire US$575
million debt investment has been written down. It is unclear if GIC has
also written down its equity investment in the property.
'GIC recognised the losses following
the ruling by the New York Court of Appeals in October 2009 which
precipitated the default,' a GIC spokesman said yesterday.
In 2006, US developer Tishman Speyer
Properties and BlackRock Realty, a unit of fund manager BlackRock Inc,
bought Stuyvesant Town and Peter Cooper Village - a sprawling,
11,200-apartment complex with 110 buildings along New York City's East
River - for US$5.4 billion, the biggest property transaction in US
history.
While details of the deal were not made
public, news reports citing people familiar with the deal say that it was
funded by US$1 billion in equity from institutional investors including
GIC, US$3 billion in debt that was pooled with other commercial mortgages
and sold on as mortgage- backed securities or bonds, and US$1.4 billion of
mezzanine debt that was also sold to institutional investors.
The other investors included pension
funds such as the Florida State Board of Administration and the California
Public Employees' Retirement System or Calpers, as well as US mortgage
finance companies Fannie Mae and Freddie Mac - which own the biggest
portion of the debt, according to a Bloomberg report.
The Florida State Board of
Administration and BlackRock have written off their entire investment in
the property.
Completed in 1947, the apartment
complex was built at the end of World War II to provide affordable housing
for New York residents returning from the war. More than 70 per cent of
its apartments remained under rent control that subsidised their tenants
when the new owners took over in late 2006.
The owners planned to evict tenants who
no longer qualified for the subsidised rents, and raise the rents for the
apartments to at least the prevailing market rates. They also expected to
further boost the rents the apartments could command by investing in new
amenities for residents, to generate the returns needed to earn a profit
on their investment.
But the project ran into difficulties
when US housing prices collapsed and the economy slid into recession.
By last September, a fund set aside for
renovation of the buildings and to pay interest on the debt used to fund
the deal had been nearly depleted.
And on Oct 22, the New York Court of
Appeals upheld an earlier court ruling last March that the owners had
wrongly charged market rents on thousands of the apartments while
receiving tax exemptions under the city's rent-controlled housing
programme. - 2010
January BUSINESS
TIMES
Tony Tan retires,
is made GIC's deputy chairman
He will also join the board of Singapore Press
Holdings
Outgoing Deputy Prime Minister Tony Tan is set to shape the future at two
major companies after he retires from Cabinet today.
 |
| Dr Tan: Will continue to remain
MP for Sembawang |
Dr Tan, who is also Coordinating Minister for Security and Defence, has
been appointed deputy chairman and executive director of the Government
of Singapore Investment Corporation (GIC).
And he has accepted an invitation to join the board of media group
Singapore Press Holdings (SPH).
At GIC, Dr Tan will also chair the remuneration and investment committees
and continue as chairman of GIC Special Investments.
And he has accepted an invitation to join the board of media group
Singapore Press Holdings (SPH).
At GIC, Dr Tan will also chair the remuneration and investment committees
and continue as chairman of GIC Special Investments.
'I think that the performance of GIC has been respectable, above
average,' he said at a news briefing yesterday. 'As deputy chairman and
executive director of GIC, it would be my objective to add value to GIC's
management of Singapore's national reserves.'
Although this is the first time GIC will have an executive director, Dr
Tan's new task is essentially an extension of his existing relationship with
the global investment management company. He has been a board member of GIC
since it was formed in 1981 to manage Singapore's foreign reserves.
One of the world's largest fund management companies, GIC manages more
than US$100 billion of assets. With Dr Tan's appointment, GIC will have two
deputy chairmen. Its current deputy chairman is Prime Minister Lee Hsien
Loong, while Minister Mentor Lee Kuan Yew is the group's chairman.
Dr Tan's appointments at GIC take effect today.
As for SPH, Dr Tan will come on board when regulatory approvals have been
obtained. He said he can contribute to the company's general management,
make it more effective and add value for shareholders.
Welcoming Dr Tan's impending arrival, SPH chairman Lim Chin Beng said:
'We are delighted to have someone of Dr Tan's distinction, experience and
stature on our board. With his long and distinguished service to the
government and the nation, extensive business experience and insights into
the industry, Dr Tan brings with him a wealth of expertise which will
greatly benefit the company.'
Besides shuffling between boardrooms, Dr Tan will also chair the National
Research Foundation, as mentioned by PM Lee in his National Day Rally
speech.
Dr Tan expressed confidence yesterday that the focus on R&D will lead
Singapore into a new phase of economic growth.
'I think we have a chance and I'm optimistic because we have done it once
with the biomedical sciences,' he said. 'With our new R&D drive, we
should be able to further develop other fields. And that is the critical
economic path ahead for Singapore. If we can do that successfully, our
economy will be assured for the next 15-20 years. It's a risk but if we
don't take the risk, then we will surely fail.'
A Member of Parliament for Sembawang since 1979, Dr Tan stepped down from
Cabinet in 1991 to join OCBC as chairman and CEO. He rejoined Cabinet in
1995. During his time in Cabinet, he has headed many ministries - from
finance, trade and industry, to education, and defence.
Although he is retiring from Cabinet, Dr Tan said yesterday he will
remain MP for Sembawang, a constituency he has 'grown up with' for the past
26 years. However, he stopped short of saying whether he will run at the
next general elections. 'We'll cross the bridge when we come to it,' he
said.
Asked what he will miss most about his ministerial career, Dr Tan said it
is the times he spent in the field and interacting with National Service men
and women.
'It is a special thrill to go out and see our young men and women
fulfilling their duty, protecting Singapore and doing their best in
conditions,' he said. 'I have had lunch with our soldiers training in the
jungles in Brunei. As I've said, I've sailed with them in our ships. I've
gone up with them in our aircraft. Wonderful experience, something which no
amount of corporate work can give you.' - 2009 Sept 1
SINGAPORE
BUSINESS TIMES
Risk of financial sector over-regulation
in wake of market turmoil: Tony Tan
Wrong lessons could be learned
and the sector's healthy development stifled
(SINGAPORE) There is a real
risk of over-regulation in the financial sector in the coming years as
markets start to pick up the pieces in the wake of the ongoing market
turmoil.
This warning came from Government of
Singapore Investment Corporation (GIC) deputy
chairman and executive director Tony Tan, who said that regardless of how
the current crisis is resolved, there is 'little doubt' that an indelible
impact would be felt, especially in the tightening of regulation and
supervision.
Speaking in Washington yesterday at the
annual meeting of the Institute of International Finance, Dr Tan said:
'Protectionism in the US could rise, while the steady liberalisation of
cross-border capital flows could be reversed.'
Given the size of the problems in the
global financial sector today, he said that state intervention in some
form would prove necessary to bring about stability.
'As a result, governments will be
forced to rethink how they are regulating and supervising the financial
sector to both safeguard public funds and prevent a recurrence of the
current financial turmoil. The cost will likely be high in terms of
prosecution, shareholder dilution and regulation,' he said.
In the developed world, both regulators
and markets are going to require commercial and investment banks and
insurers to hold more capital and liquidity.
Policy-makers in emerging economies are
also likely to relook the pace of liberalisation and how much trust to
place in the ability of financial markets to regulate themselves.
But Dr Tan warned that there was a
danger that politicians and policy-makers 'will learn the wrong lessons'
from the current crisis and over-regulation in the developed world could
'stifle the healthy development' of the financial sector.
'Securitisation is an important
innovation to preserve even if it had contributed to the sub-prime crisis.
In emerging economies, regulators could delay needed liberalisation and
hinder innovation. It may take years before securitisation is allowed in
these markets to play an optimal role in the new financial landscape,' he
said.
'We are experiencing unprecedented
financial turmoil. We will need to examine how we got here and enact steps
to prevent a recurrence . . . All stakeholders should work towards
maintaining a stable, global financial system and free flow of trade,
capital and investment,' said Dr Tan.
- 2008 October 13 BUSINESS TIMES
GIC names top
men for Europe, Americas
Government of Singapore Investment
Corporation (GIC) has appointed top
representatives in Europe and America to build networks and seek
investment opportunities.
Under newly created titles, deputy
president of GIC asset management Lim Chow Kiat
will be president (Europe), while president of its London office Anthony
Lim will become president (Americas) from today.
They will be the 'most senior
representatives in their respective geographies for the whole of GIC',
said the state investor in a press statement. 'They will promote contacts
with policymakers and thought leaders in the financial, governmental and
non-governmental circles,' GIC added.
'The appointments come at a time when
critical changes will be made to the global financial system and there is
a need for GIC to not only gather but also
contribute deeper insights into investment opportunities and challenges in
the coming years.'
Mr Lim Chow Kiat - who was also
previously head of fixed income, currency and commodities at GIC
- will be based in London to cover Europe, the Middle East and Africa.
He joined GIC
as a portfolio manager in 1993 with an accountancy degree from Nanyang
Technological University and subsequently built up GIC's
investment capability in corporate bonds. He was also responsible for
several cross-market efforts such as the global opportunity portfolio.
Mr Anthony Lim, who joined GIC
in 1998, will be based in New York to cover North, Central and South
America. He was a senior MD at Bankers Trust Company, before which he was
with the Monetary Authority of Singapore (MAS), spending three years in
its New York office. -
2009 September 1
GIC RE hones strategy to meet
stiffer competition
It has gone into wider spectrum of real-estate assets
The property arm of the Government of Singapore
Investment Corporation (GIC) is fine-tuning its strategy to compete with
other big boys in the race for prime real estate worldwide.
Competition has intensified as more institutional
investors sink their funds into property, says GIC Real Estate president
Seek Ngee Huat. 'We are now investing in a wider spectrum of real
estate-related assets,' he told BT in a rare interview. This includes
emerging markets.
GIC RE - which helps invest Singapore's reserves
of more than US$100 billion - has built up a huge portfolio of about 140
investments in more than 30 countries.
Dr Seek said there used to be just a handful of
global real estate players - primarily rich countries with small domestic
markets, like the Netherlands. But today the game has got bigger, with
institutions fighting for a share, regardless of the size of their domestic
markets.
By his reckoning, German open-ended funds recorded
capital inflows totalling US$34.3 billion for 2002 and 2003. And armed with
this, they can now enter more markets due to a relaxation of rules governing
investment mandates.
According to Dr Seek, this makes them 'much more
formidable competitors' - such as German insurer Ergo bidding aggressively
for Ngee Ann City in Singapore.
To keep ahead of the pack, GIC RE has had to
evolve, he said. It has always had a real estate division, but it was only
in 1999 that the company was incorporated as GIC RE, with Dr Seek as
president. Before that, he was GIC's director of real estate, from 1996.
GIC RE's investment strategy has broadened to
cover all sectors - office, retail, industrial, hotel and residential assets
- and product types, ranging from direct building acquisition and property
investment funds to strategic stakes in publicly-listed property companies,
real estate debt and joint venture partnerships.
On joint-venture partnerships, Dr Seek said: 'In
the past 10 years, we have been looking increasingly to work with partners
as a way of expanding our investment opportunities. The reason is simply
that we need to leverage off local partners and their expertise. The
property market is, after all, very local by nature.'
But these partnerships aren't without risk. 'Risk
evaluation is an important part of selecting partners, and we look at a
range of factors including alignment of interests and objectives, reputation
and track records,' Dr Seek said.
'More importantly, potential partners must also
see us as more than just a company that provides the capital. This may be
one of our strengths, but we also bring to the partnership a global
perspective, whether in design, investment trends or financing techniques,
and the commitment to be a long-term partner.'
Risk management is, of course, an 'important area
of investment management' - which is why it's interesting to learn that GIC
RE is prepared to look at emerging markets too. 'Longer-term institutional
investors need to consider how the world's economic landscape might change
over the next 10-20 years, and this may require them to take some short-term
risks by investing in emerging markets,' Dr Seek said.
GIC RE already has investments in North Asia,
Mexico and South-east Asia. Last November, it signed a US$100 million joint
venture with China's biggest residential developer, China Vanke. Then in
January this year, it teamed up with HDB Corp and privately-owned Wuthelam
Holdings to make an initial investment of US$75 million to develop township
projects in China. A month later, GIC RE said it would invest US$200 million
in a joint venture with New York-listed AMB Property Corporation that will
involve distribution facilities in Mexico. And in Malaysia, GIC RE entered
into a joint venture with Lum Chang Holdings in April to build a mixed
development on land in Selangor said to be worth RM82 million (S$36
million).
But Dr Seek doesn't expect such investments to
yield the same returns as those from more mature markets. He has been
reported as saying that hurdle rates of return vary from country to country
but start around 400 basis points above bond yields in the most mature
markets. In emerging markets, the hurdle rates are even higher.
India may be GIC RE's next frontier, where Dr Seek
believes there is definite potential in the housing and retail segments. In
particular, GIC RE finds the business process outsourcing segment 'unique'
because of the many MNCs that are racing to set up there. But it's too early
to say that GIC RE will invest in India for sure.
'We will also look at risk-adjusted return,' Dr
Seek said. 'If we think that investments in India are high-risk, then we
will expect a higher return.'
Other than emerging markets, Dr Seek reiterates
that GIC RE is 'essentially a long-term, core investor, with a long-term
investment horizon typically of about 10 years'. Some of its landmark assets
include the AT&T Corporate Centre in Chicago, Shiodome City Centre in
Tokyo, Star Tower in Seoul, and the IBM headquarters in Madrid. GIC RE also
recently bought the Chifley Tower in Sydney for an estimated A$700 million
(S$896 million).
So is persistent talk of a global property bubble
cause for concern?
'We need to be careful about generalising,' Dr
Seek said. 'Property markets are very diverse around the world. There are
indeed a number of residential markets that look rather peakish, and some in
Australia and the UK are slowing down. But most office markets are showing
improving fundamentals.' - 2005 August
13 BUSINESS
TIMES
Mapletree Investments buys 11
new properties worth $255m
It will hold them for up to 12 months before pumping them into the trust
Mapletree Investments yesterday announced the acquisition of 11 new
properties in Hong Kong, Malaysia and Singapore worth $255.5 million which
it is expected to eventually pump into its logistics trust slated for an
initial public offer (IPO) next month.
The 11 properties also give a hint of the
Pan-Asian flavour that the Mapletree Logistics Trust (MLT) will eventually
offer. That should appeal to investors who are looking for geographical
diversification in their current holdings of Singapore Real Estate
Investment Trusts.
While MLT's initial portfolio of 15 assets worth
$422 million is entirely from Singapore based on information in the trust's
preliminary prospectus lodged with the Monetary Authority of Singapore on
Monday, it has also identified Malaysia, Hong Kong, China, Vietnam,
Thailand, India, Indonesia, the Philippines, South Korea and Japan as
potential acquisition markets.
Mapletree Investments is buying the 11 new
properties and will warehouse or hold them for up to 12 months before
pumping them into the trust.
Analysts say the fully owned unit of Temasek
Holdings may have opted for this two-step acquisition process because of a
timing issue.
This is because it was still buying assets even as
it was still submitting listing documents to the authorities for the
flotation of MLT. Basically, there had to be a cut-off point, in this case
May 31, for the purposes of preparing the accounts and prospectus for MLT's
IPO.
Once the trust is listed, it will be able to buy
properties directly, but in the meantime, to avoid losing any potential
acquisitions where negotiations could not be concluded by the cut-off date,
the trust's sponsor, Mapletree Investments, will make the acquisitions for
the time being.
Under normal listing rules, MLT would be able to
buy the 11 properties from related parties like its sponsor only one year
after listing. However, market watchers expect the two parties to seek
permission from the authorities for an earlier date to pump the assets into
the trust.
MLT's offer price range of 63 to 68 cents per unit
works out to an initial annualised distribution yield of 6.0 to 6.3 per
cent.
Based on this, market watchers expect the 11 new
properties to be bought at yields higher than this range, particularly as
some of them are from outside Singapore, and most sophisticated investors
would want a higher yield for overseas assets to compensate them for the
country and currency risks.
Analysts say that Mapletree could achieve higher
yields for unit holders from the properties through gearing and paying part
of the trust manager's fees in units instead of cash.
The 11 new properties which Mapletree is acquiring
have a total gross floor area of more than 1.7 million sq ft and each of
them is strategically located in established industrial areas and near port
areas that are easily accessible by expressways.
The properties enjoy strong occupancy rates of
nearly 100 per cent and count among their tenants leading multinational and
regional logistics players like IBM China, Yusen Air & Sea Services,
Hitachi Transport, Zuellig Pharma and Markono.
'Mapletree will build on client relationships to
grow its portfolio, adopting a 'follow-the-client' strategy to provide
value-added real estate solutions to support these logistics operators as
they expand their operations overseas,' said Mapletree Investments CEO Hiew
Yoon Khong in a release yesterday.- by Kalpana Rashiwala
SINGAPORE
BUSINESS TIMES 30 June 2005
GIC acquiring property globally
Got any prime property to sell for a few hundred
million dollars in a major world capital?
Try offering it to Singapore, a land-scarce but
cash-rich country emerging as a global property titan as it snaps up
everything from serviced apartments in Japan to malls in Britain as part of
a long-term investment strategy.
The acquisitions are driven by the Government of
Singapore Investment Corp (GIC), custodian of the city-state's foreign
reserves of over US$100 billion.
In its latest purchase, GIC joined hands with
investment bank Morgan Stanley to buy Sydney's landmark Chifley Tower and
Plaza - overlooking the famous harbour and iconic Opera House - and the
Royal Pines Resort in Australia's Gold Coast.
The price was not disclosed but analysts quoted by
the Australian Financial Review speculated that the deal could be worth
almost US$600 million.
'We believe that the underlying market
fundamentals will favour rental growth,' said Seek Ngee Huat, president of
GIC Real Estate, the group's property arm.
GIC spokesmen had no immediately reply to queries
about the size of its global property portfolio but in the past 12 months
alone, GIC and partners have announced more than US$4 billion worth in
acquisitions.
This total excludes purchases whose values were
not announced. GIC, whose financial disclosures can affect the value of the
Singapore dollar, does not make its accounts book public.
Apart from real estate, GIC also places its funds
in equities, fixed income, money market instruments and special investments.
It describes itself as one of the world's largest fund management companies.
Lee Ek Tieng, GIC group managing director, said on
the agency's website that its mission is to 'achieve good long-term returns
on state assets placed under our charge by investing internationally, with
due regard to risk.'
Analysts said that a glance at the property
purchases reveals a pattern.
Chua Hak Bin, senior regional economist at DBS
Bank in Singapore, said: 'These are relatively low risk and they provide a
steady cash flow stream and dividends.'
The GIC is also taking the right approach by
investing the republic's reserves in a diversified portfolio, Mr Chua added.
Its fresh Australian acquisition, Chifley Tower
and Plaza, comprises 40 levels of prime office space and retail shops in
Sydney's business district.
The Royal Pines Resort is located on Queensland's
famed Gold Coast. It is one of the largest developments of its type in
Australia, comprising a 330-room hotel, convention facilities, a 27-hole
golf course that regularly hosts international tournaments, and other
leisure facilities.
In March, GIC bought three serviced apartments
located in upmarket Tokyo residential areas for over US$111 million.
During the same month, it also paid US$578 million
for a 17.5 per cent stake in a British shopping mall and entered into a
US$637 million venture with Britain's largest student landlord, the UNITE
Group, to build and operate hostels in the country. - AFP
30 May 2005
GIC Real Estate ties up to invest in
Mexico
US$700m venture to buy industrial
distribution facilities
GIC Real Estate (GIC RE) has struck again. The
real estate investment arm of the Government of the Singapore Investment
Corporation said it will invest US$200 million in a US$700 million joint
venture deal with New York-listed AMB Property Corporation.
The joint venture, AMB-SGP Mexico, will invest in
distribution facilities in targeted markets in Mexico. GIC RE and AMB said
in a joint statement the primary focus of the venture was to buy stabilised
industrial distribution properties when they have been developed by AMB and
its local market partner, G Accion. AMB-SGP Mexico's will, however, also
acquire operating assets from third parties.
GIC RE has had a busy start to the new year. This
is GIC RE's fourth major investment or acquisition so far this year.
'Our capital allocation to Mexico's emerging
industrial market is driven by Mexico's growing trade with the US, its large
consumer population and the strong demand for new distribution facilities
from multinational companies,' said GIC RE president Seek Ngee Huat.
'GIC RE's positive joint venture experience with
AMB in the US, combined with AMB's demonstrated ability to source and
operate property in Mexico, makes them the right partner for our industrial
investment goals in Mexico.'
AMB-SGP Mexico will own three properties
comprising eight buildings totalling 1.3 million square feet in Mexico City
and Guadalajara. AMB has developed or acquired these assets during the past
two years.
AMB and GIC RE had their first co-investment
partnership in 2001. Together, the duo own 8.6 million square feet of US
distribution facilities.
AMB is expected to contribute US$50 million in
equity to the latest tie-up. AMB-SGP Mexico is expected to operate with a
targeted leverage ratio of 65 per cent of the aggregate gross value of its
assets.
AMB will manage the properties and receive fees on
future third-party acquisitions and for asset and portfolio management
services, as well as incentive distributions at the end of each seven-year
term.
'Over the last 21 years, AMB has built a solid
track record of investing and managing private capital in US markets,' said
Hamid R Moghadam, AMB's chairman and CEO.
'AMB operates about US$2.6 billion in assets owned
through private capital joint ventures. When fully invested, AMB-SGP Mexico
is projected to add about US$700 million to assets in AMB's co-investment
joint ventures,' he said. - 2005
February 3 SINGAPORE
BUSINESS TIMES
GIC sees tougher investment climate
ahead
The Government of Singapore Investment Corp
expects a 'more difficult' investment environment ahead as inflation and
interest rates rise.
The state-run investment company, which manages
more than US$100 billion, said 'double-digit' global returns in both
equities and bonds over the past 20 years are unlikely to be repeated.
'The environment going forward is going to be more
difficult,' Ng Kok Song, managing director of public markets, said in an
interview in Singapore.
'Hopefully inflation stays low and even if we
achieve modest single-digit overall returns on average, we would still be
able to produce quite handsome real returns.'
Charged with managing Singapore's foreign reserves
and investing in international equities, fixed income and money markets, GIC
doesn't publish its financial statements. Its chairman is Singapore's Senior
Minister Lee Kuan Yew, considered the founding father of the independent
city-state.
GIC has achieved yearly returns of more than its
targeted 4 to 5 per cent above inflation through global investments since
the agency was formed in 1981, Mr Ng said.
Inflation is a risk going forward, Mr Ng said, as
central banks including in the UK, US and Australia have raised interest
rates after years of low levels maintained by the world's two biggest
economies, the US and Japan.
'In the dynamic situation that we are seeing
everybody is watching the inflation numbers, because we don't want to have a
situation where growth slows but interest rates are high because of higher
oil prices and high commodity prices,' said Steven Lim, who helps manage
US$300 million at Daiwa SB Investments in Singapore.
If China 'engineers a soft landing' in efforts to
slow its economy, inflationary pressures should ease, Mr Lim said.
The US Federal Reserve last month raised the key
interest rate by a quarter percentage point and said increases will be
gradual as long as inflation remains 'relatively low'.
'On a 20-year view, interest rates have come down
tremendously. That's a perennial concern,' said Hugh Young, managing
director of Aberdeen Asset Management in Singapore, which manages US$10
billion in Asian bonds and equities. It also manages funds for GIC. 'Do we
still see a good chance of double digit returns from certain areas of the
world? Yes. One area is from Asian equities.' Strong returns from emerging
Asian equity markets including Korea, Taiwan, India, China, Malaysia,
Thailand and Indonesia have prompted GIC to change its portfolio focus from
more established markets such as Hong Kong, Australia and New Zealand, Mr Ng
said.
GIC is 'stepping up our exposure to emerging Asia.
The new area of focus for us in terms of Asian equities is emerging Asian
equities,' Mr Ng said. - 2004 July 20
Bloomberg
SINGAPORE
BUSINESS TIMES
From old-economy brick and mortar to
risky high-tech ventures, the Government of Singapore Investment Corporation
(GIC) is stepping up its exposure to China.
It is also tapping into the China market
in another way - through equity investments in foreign companies which
supply commodities and goods to meet demand from China's dynamic economy.
GIC's latest investment, through GIC Real
Estate, is an 8 per cent stake in developer Beijing Capital Land. The stake
is expected to cost GIC Real Estate HK$300 million (S$67 million) -
denominated in HK$ because Beijing Capital Land will be listing in Hong Kong
shortly.
Beijing Capital Land, which builds
housing for middle and high-income earners, had earlier said it wants to
sell some shares to a strategic investor who could contribute to its
long-term growth.
The state-owned developer plans to offer
its shares in an initial public offer which is now tipped to raise about
HK$1 billion. HSBC is managing the Beijing Capital Land offer.
Apart from Beijing Capital Land, at least
two other Chinese property companies are planning to list their shares in
Hong Kong - Soho China and Shanghai Forte Land.
Like Beijing Capital, Soho Capital is
based in the Chinese capital, while Shanghai Forte Land is the biggest
private developer in Shanghai. Shanghai Forte Land launched its share offer
last week, at HK$2.55 a piece.
Some analysts in Hong Kong say GIC's 8
per cent investment in Beijing Capital Land taps into the strong demand for
housing in the run-up to the Olympic Games which the Chinese capital will
host in 2008.
Others, however, expressed reservations
about these share offers because a property bubble is forming in Shanghai,
Beijing and Shenzhen, particularly in the luxury market. Vacancy rates in
upmarket projects are running at 20 to 30 per cent in these cities,
according to property consultant Colliers International.
Shanghai Forte Land's president Guo
Guangchang, playing down the bubble fear, pointed out in a recent press
report: 'Hong Kong's property market took 30 years to build the bubble and
then collapse in the end. Shanghai is only beginning to take off.'
Investor confidence could also be tested
in the wake of accounting and disclosure scandals at some Hong Kong-listed
Chinese companies like Euro-Asia Agri.
GIC Real Estate, which has been actively
building up its real estate portfolio under its president is also busy
with another major project - construction of its office tower in Pudong,
Shanghai's financial district. It paid US$42 million for the site a year
ago.
The real estate unit of GIC manages about
10 per cent of more than U$$100 billion under GIC's care.
Piling at the office project, due for
completion at end-2005, has begun. Hoardings at its site, near the People's
Insurance building, give no indication that it is owned by GIC Real Estate.
The Class A office project marks the
first time that GIC Real Estate is initiating and developing a project on
its own in China. 'This is interesting,' said a Singaporean businessman who
is based in Shanghai and works in the real estate industry there.
GIC Real Estate's modus operandi has been
usually to take a stake in a project spearheaded by others or buy a
completed building.
According to the businessman, there
aren't many Class A office buildings coming up in Shanghai in the next few
years and GIC's project in the Lujiazui development zone, which will yield
70,000 sq m of space, could expect good returns. 'There will be demand from
foreign companies which set up shop here and also in the run-up to the Expo
in 2010 (in Shanghai),' he said.
GIC Real Estate's portfolio also includes
The Exchange in Beijing and the Tianjin Exchange.
Publicity-shy GIC, through its Special
Investments unit, has also been investing in other sectors of the Chinese
economy.
It has taken stakes in venture capital
fund New Margin Ventures and SMIC, a Shanghai-based IC manufacturer due to
be listed later this year.
GIC Special Investments is also a US$20
million anchor investor of the newly-set up CDH China Fund, which will
invest in established but unlisted firms with substantial operations in
China.
Some of GIC's earlier interests in China
were also of the old economy genre - like sanitary ware manufacturer Eagle
Brand and Nanfu Battery Company. Such direct investments are just facets of
GIC's growing exposure to the world's most populous country. But as GIC does
not publish its results, it is difficult to ascertain the overall
profitability of its investments.
Buying into companies which supply
commodities and goods to China is another way of benefiting from its
sizzling economy, said Ng Kok Song, GIC's managing director, public markets.
'Investors hunting for China
profits would be served by thinking outside the box. Global equity investors
should be asking which companies in North America, Europe, and Asia would
benefit from what's happening in China,' he told a recent investment seminar
in Singapore. - 2003 March 3
Singapore Business Times
KOREA
GIC purchased the Seoul
Finance Center, a 30 storey office tower in the CBD in Soeul, Korea for
US$400 million
MALAYSIA
- 40% stake in Malaysian listed company,
Road Builder Holding Bhd for S$112 million. The company involved
in housing has a land bank of 1,210 hectare
THAILAND
GIC and partner, Land & Houses have
bought a prime 21 storey office building in Bangkok for S$23.9 million .
The Wave Place, a 20,000 m2 grade A building in the Central
District was made through a property fund, Asia Asset Advisory Property
whose key investors are GIC & Land & House. The fund has taken a
long lease on the building that was completed in 1996
AUSTRALIA
GIC has cleared a major hurdle in its bid
to take over Australian listed Ipoh Limited. Malaysia listed company.
IGB Corporation has agreed to sell its entire 33.74 million shares or 21.4%
in Ipoh to Reco Bay the property arm of GIC.
IGB is controlled by Tan Chin Nam. IGB
will receive $48.5 million or general offer price of A$1.65 per Ipoh share.
GIC owns another 20% of Ipoh shares from previous purchases. They will have
exposure to a string of prime properties in Australia & New Zealand
UNITED
STATES
The Government of Singapore Investment
Corp. emerged from a pack of a dozen bidders and made a preliminary
agreement to buy 1211 Sixth Ave. for about $570 million, or $300 a square
foot, from Heitman Financial. The pending sale, now in due diligence,
promises to be the biggest office-building transaction of the year. The 1.9
million-square-foot tower between West 47th and West 48th streets is
considered a long-term institutional investment play. GIC eventually
backed out of the deal because due diligence uncovered significant
discrepancies.
Our client's focus is currently on
institutional quality real estate investments in Northern Asia - Seoul,
Tokyo, Shanghai and Beijing. If you are considering remixing your
assets and have appropriate properties available in any of these cities,
please contact us by email and we
can solicit a prompt response from this cash-rich client as to its
suitability for investment.
TOKYO
GIC unit buys Greater Tokyo block for
$220m
Singpore firm seeks to invest more in Japanese real estate
Amid the economic gloom in Japan, GIC
Real Estate, the property arm of the Government of Singapore Investment
Corporation (GIC), has acquired an office-cum-data centre building in
Greater Tokyo for some $220 million.
The purchase of Kawasaki Tech Center is
the first such transaction by GIC RE in Greater Tokyo and comes on the heels
of the company's earlier acquisition of a portfolio of seven high-end
residential buildings housing expatriates in the central wards of Tokyo.
The latest acquisition is a 20-storey
building located near the Kawasaki train station and a 20-minute train ride
from central Tokyo. According to GIC RE, the building is fully equipped with
ample power supply, fibre-optic lines, a tight security system and various
facilities that meet the needs of the centre's users.
Kawasaki is an established manufacturing
and industrial area within Greater Tokyo. 'KTC's strategic and convenient
location has attracted many reputable foreign and local industries in the
building,' said GIC RE president Seek Ngee Huat.
'The building's competitive edge is in
attracting corporate tenants who have preference for locating their back
office and technology support functions outside central Tokyo,' Dr Seek
said, adding: 'For these reasons, KTC is almost fully tenanted.'
Indicating that the group was out to
invest even more in Japanese real estate, Dr Seek pointed out that GIC RE's
exposure to Japanese real estate would continue to be substantial.
Despite the recent slowdown, the
long-term fundamentals of Japanese real estate remain sound,' he said,
adding that with the launching of the first batch of J-Reit funds in
September, the competition for completed office buildings would continue to
heat up.
On future purchases in Japan, the firm
said it would continue to look out for more investments, particularly in
Tokyo, with the focus on the office and residential sectors.
Formed on April 1, 1999, GIC RE, whose
parent manages over US$100 billion in assets, has invested in over 120
separate projects in more than 25 countries.
Its portfolio includes such landmarks as
the AT&T Corporate Center in Chicago, the Shiodome City Center in Tokyo
and the Seoul Finance Center in downtown Seoul.
- Business Times - 24 Aug 2001
GIC also owns
- 7 residential apartment blocks totalling
63 units in Tokyo for $271 million
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