Don't tell GIC Private Ltd. executives that the tidal wave of liquidity central banks are flushing into capital markets has left little value to be had in prospective real estate investments around the globe.
On Dec. 1, the Singapore sovereign wealth fund, through its affiliates, agreed to buy 117 million square feet of U.S. industrial property from Blackstone Group LP for $8.1 billion. The deal caps a year that's seen the fund and its affiliates commit roughly $12 billion to real estate investments in the U.S., Europe and Asia. (All amounts in this story, unless otherwise noted, are in U.S. dollars.)
GIC has been “incredibly active in the last 12 months,” buying, selling and forming joint ventures, said Alistair Meadows, head of the international capital group, Asia Pacific, with Jones Lang LaSalle in Singapore.
Other real estate deals in the past three months have included:
nA commitment of up to $250 million to a joint venture with Indonesian property firm Rajawali Corp. to build office, retail, residential and mixed-use projects in Jakarta's central business district;
nAn $800 million commitment to a joint venture with Sydney, Australia-based shopping center operator Scentre Group to acquire five shopping centers in New Zealand;
nA $119 million investment in a joint venture with Goodman (NZ) to invest in the Viaduct Quarter section of Auckland, New Zealand's, central business district;
nThe purchase of a 20% stake in Turkish real estate developer Ronesans Gayrimenkul Yatirim A.S. for $308 million;
nThe purchase of Pacific Century Place Marunouchi, a 32-story mixed-use tower in Tokyo, from Secured Capital Japan Co. for $1.7 billion;
nThe sale — to Norway's Norges Bank Investment Management — of GIC's 100% interest in the Bank of America Merrill Lynch Financial Centre in the City of London for $913 million;
nThe purchase of a 30% stake in Spanish property developer Gmp Group for $313 million; and
nA $121 million investment in a joint venture with India-based property developer Brigade Group.
Those investments might have been made — at least to some extent — to lift GIC's real estate allocation to its target range of 9% to 13%. As of March 31, according to GIC's annual report, the fund had a 7% allocation.
Market veterans say GIC's flurry of real estate investments in recent months suggests a degree of confidence in the long-term prospects for property markets.