GIC makes first real estate move into NZ

Singapore

AFTER clocking in an ultra-busy month in October, Singapore's sovereign wealth fund GIC could be keeping up the shopping pace this month.

On Monday, the state-linked fund with over US$100 billion of assets under management, revealed its maiden property foray into New Zealand by tying up with Goodman Property Trust (GMT) to co-invest in Auckland's rapidly developing Viaduct Quarter.

The pact, with one of New Zealand's largest listed property investor by market value, includes GMT's existing viaduct property interests. GMT is managed by Goodman (NZ) Ltd.

The joint venture will initially own a portfolio of assets worth NZ$313 million (S$312.6 million) and has a mandate to grow to NZ$500 million over time, said Goodman and GIC in a joint statement. GIC will acquire a 49 per cent interest in these assets while GMT will retain a 51 per cent share with all future investments to be carried out on the same basis.

"The benefits of GMT's close relationship with Goodman Group, one of the world's largest integrated property groups, have facilitated the introduction of GIC into the New Zealand market and a broadening of GMT's investment strategy in the Viaduct," said Goodman chairman Keith Smith.

The Viaduct Quarter was identified by GMT as a strategic investment location eight years ago; in 2006, GMT acquired the Air New Zealand building and a 50 per cent interest in Viaduct Corporate Centre. It later upped the ante on its investment in the area and bought the new Fonterra building which is currently being developed by Goodman Group and Fletcher Building.

The GMT-GIC tie up will continue this commercial focus, building a portfolio of high-quality, campus-style office properties, leased to major customers on long-term leases, said the firms. The pact will also allow GMT to expand its investment in the area without requiring any significant new funding, said Goodman chief executive John Dakin.

Investment opportunities in the Viaduct Quarter have risen, thanks to the local government's initiatives and private development which are transforming the former marine and industrial areas into a mixed-use waterfront project.

"As a long-term investor, GIC looks to establish strategic partnerships with leading market players. Goodman has strong asset management expertise and has a good pulse on the New Zealand market. We believe there will be good investment opportunities," said Goh Kok Huat, president of GIC Real Estate.

GIC had a cracking time in October with lots of deals in the property space in Turkey, Japan, Spain and Italy. Less than a week ago, the fund made its first corporate real estate investment in Turkey by forking out 250 million euros (S$402.6 million) for a rights issue which will result in a 20 per cent stake in Turkish firm Ronesans Gayrimenkul Yatyrym (RGY) - the real estate arm of Turkey's Rönesans Group and an affiliate of GIC.

It also scooped up a prime property in Tokyo's business district for reportedly US$1.7 billion. Europe has been in its cross hairs with the state-linked fund announcing plans to buy 30 per cent of Spanish real estate firm Gmp for over 200 million euros and the remaining half it doesn't own in one of Italy's largest malls RomaEst Shopping Centre.