Singapore Inc. goes on buying spree<\/p>\n
Bernice Han, Agence France-Presse\/Singapore<\/p>\n
Got any prime property to sell for a few hundred million dollars
\nin a major world capital ?<\/p>\n
Try offering it to Singapore, a land-scarce but cash-rich
\ncountry emerging as a global property titan as it snaps up
\neverything from serviced apartments in Japan to malls in Britain
\nas part of a long-term investment strategy.<\/p>\n
The acquisitions are driven by the Government of Singapore
\nInvestment Corp. (GIC), custodian of the financially savvy city-
\nstate's foreign reserves of over US$100 billion.<\/p>\n
In its latest purchase, GIC joined hands with investment bank
\nMorgan Stanley to buy Sydney's landmark Chifley Tower and Plaza
\n-- overlooking the famous harbor and iconic Opera House -- and
\nthe Royal Pines Resort in Australia's Gold Coast.<\/p>\n
The price was not disclosed but analysts quoted by the
\nAustralian Financial Review speculated that the deal could be
\nworth almost $600 million.<\/p>\n
"We believe that the underlying market fundamentals will
\nfavor rental growth," said Seek Ngee Huat, president of GIC Real
\nEstate, the group's property arm.<\/p>\n
GIC spokesmen had no immediately reply to queries about the
\nsize of its global property portfolio, but in the past 12 months
\nalone, GIC and partners have announced more than $4.0 billion
\nworth of acquisitions.<\/p>\n
This total excludes purchases whose values were not announced.
\nGIC, whose financial disclosures can affect the value of the
\nSingapore dollar, does not make its accounts book public.<\/p>\n
Apart from real estate, GIC also places its funds in equities,
\nfixed income, money market instruments and special investments.
\nIt describes itself as one of the world's largest fund management
\ncompanies.<\/p>\n
Lee Ek Tieng, GIC's group managing director, said on the
\nagency's website that its mission is to "achieve good long-term
\nreturns on state assets placed under our charge by investing
\ninternationally, with due regard to risk."<\/p>\n
Analysts said a glance at the property purchases reveals a
\npattern.<\/p>\n
"Most of the properties are in major international cities in
\ndeveloped countries and of prime quality," said Chua Hak Bin,
\nsenior regional economist at DBS Bank in Singapore.<\/p>\n
"At the same time these are relatively low risk and they
\nprovide a steady cash flow stream and dividends... on that basis,
\nit is quite a sensible strategy," he said.<\/p>\n
The GIC is also taking the right approach by investing the
\nrepublic's reserves in a diversified portfolio, Chua said.<\/p>\n
"The point is you have these huge reserves managed by the
\ngovernment... at the end of the day do you want to restrict these
\nreserves to just buying U.S. treasuries?" Chua said.<\/p>\n
"I think the answer is no... this is just one part of their
\nportfolio and I think it's a sensible one," he said.<\/p>\n
Set up in 1981, GIC is one two government investment agencies
\nand its chairman is the city-state's founding father, Lee Kuan
\nYew.<\/p>\n
The other investment arm, Temasek Holdings, manages a
\ncorporate portfolio worth over $50 billion including such
\nheavyweight as Singapore Airlines, Singapore Telecommunications
\nand major foreign companies.<\/p>\n
GIC has offices in New York, San Francisco, London, Beijing
\nand Tokyo.<\/p>\n
Its fresh Australian acquisition, Chifley Tower and Plaza,
\ncomprises 40 levels of prime office space and retail shops in
\nSydney's business district.<\/p>\n
The Royal Pines Resort is located on Queensland's famed Gold
\nCoast. It is one of the largest developments of its type in
\nAustralia, comprising a 330-room hotel, convention facilities, a
\n27-hole golf course that regularly hosts international
\ntournaments and other leisure facilities.<\/p>\n
In March, GIC bought three serviced apartments located in
\nupmarket Tokyo residential areas for more than $111 million.<\/p>\n
During the same month, it also paid $578 million for a 17.5
\npercent stake in a British shopping mall and entered into a $637-
\nmillion venture with Britain's largest student landlord, the
\nUNITE Group, to build and operate hostels in the country.<\/p>\n
Some of GIC's other assets are the AT and T Corporate Center
\nin Chicago, the Shiodome City Center in Tokyo and the Seoul
\nFinance Center in the South Korean capital.<\/p>",
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