Abu Dhabi Investment Authority, one of the world’s biggest sovereign wealth funds, is investing alongside Singapore’s state fund GIC Pte in the headquarters of Time Warner Inc. in New York City, according to a person with direct knowledge of the transaction.
The person, who asked not be identified because the deal is private, declined to disclose the Abu Dhabi fund’s share of the project or the amount invested. New York-based Related Cos., the lead developer of Time Warner Center, is in talks to buy the media company’s 1.1 million square feet (102,193 square meters) of space for $1.3 billion and bring in partners including GIC, people with knowledge of the transaction said in November.
“The sovereign wealth funds have deep, deep pockets,” said Song Seng Wun, an economist at CIMB Group Holdings Bhd. in Singapore. “Partnerships make sense rather than competing with each other. It’s the practical reality of investment opportunities that are sizable.”
State funds are increasing allocations to alternative assets, including real estate, infrastructure and private equity, as they diversify their investments. China Investment Corp. this week said it favors infrastructure and property in Europe, while Korea Investment Corp. said in August it plans to spend as much as $10 billion to triple its allocation to alternative investments including properties.
Erik Portanger, a spokesman for the Abu Dhabi fund, declined to comment on the transaction when contacted by telephone. Related didn’t respond to an e-mailed request and voice mail seeking comment outside office hours. GIC declined to comment in an e-mailed statement.
Located at Columbus Circle in Manhattan, the property is a 2.8 million-square-foot twin-tower development that includes offices, restaurants and the Mandarin Oriental hotel, according to the Time Warner Center website. The building adjacent to Central Park was opened in 2004 and attracts more than 16 million visitors a year.
GIC bought Blackstone Group LP’s 50 percent stake in London’s Broadgate office complex, a cluster of 17 office buildings, shops and restaurants, which spans 4.7 million square feet, it said last month. The sovereign wealth fund said in November it’s investing as much as S$600 million ($472 million) wit Ascendas Pte in Indian real estate to meet rising demand for commercial property.
In September, Abu Dhabi fund bought Australia’s largest owner of hotels, Tourism Asset Holdings Ltd. The transaction gave the fund ownership of 31 properties.
The Wall Street Journal reported yesterday the Abu Dhabi and Singapore funds will finance more than 80 percent of the purchase, citing people with knowledge of the talks.
The Abu Dhabi Investment Authority is the world’s third-biggest sovereign wealth fund with $627 billion of assets and GIC is the eighth-biggest with assets of $285 billion, according to the Sovereign Wealth Fund Institute.