Singapore’s GIC Said to Buy Blackstone’s Broadgate StakeHui-yong Yu and Klaus Wille
GIC Pte, the Singapore sovereign-wealth fund, is the buyer of Blackstone Group LP’s stake in London’s Broadgate office complex, according to two people with knowledge of the transaction.
GIC is buying 50 percent of Broadgate, a cluster of 16 office buildings, shops and restaurants on 30 acres (12 hectares) in the City of London financial district, according to the people, who asked not to be named because the deal is private. Blackstone agreed to sell the stake for more than 1.7 billion pounds ($2.7 billion), Bloomberg reported on Aug. 20.
The purchase, at a record price for a central London property, is the latest trophy acquisition for GIC, formerly known as Government of Singapore Investment Corp. The fund last year invested in an office tower in San Francisco’s financial district, and in March acquired the Grand Wailea on the Hawaiian island of Maui and four other resorts from a group including Paulson & Co. for $1.5 billion.
“The Broadgate stake makes sense for GIC as a long-term strategic investment,” Song Seng Wun, an economist at CIMB Research in Singapore, said. “Trophy assets in London, Europe’s financial capital, are always attractive targets for institutional investors.”
Mah Lay Choon, a spokeswoman for GIC, declined to comment on the transaction. PropertyWeek.com reported yesterday that the fund was the buyer. Andrew Dowler, a London-based spokesman for Blackstone with RLM Finsbury, declined to comment.
Investors from the Asia Pacific region were the most dominant buyers of real estate in the City of London in the first six months of 2013, spending 867 million pounds, Savills Plc said in an Aug. 19 report. Rents in the district are expected to rise 6.4 percent in 2014, broker Cushman & Wakefield Inc. said in an e-mail.
GIC had 10 percent of its assets in real estate globally as of March 31, unchanged from the previous year, according to its latest annual report published this month. The fund is ranked the eighth-biggest by the Las Vegas-based Sovereign Wealth Institute, which estimates its assets at $248 billion.
Property topped the list of state funds’ investments last year, overtaking commodities and financial services, Institutional Investor’s Sovereign Wealth Center in London said in May. Real estate made up 26 percent of investments, up from 14 percent in 2011, the center said.
Until now, the most expensive purchase of a central London property was Metrovacesa SA’s 1.09 billion-pound acquisition of the London headquarters of HSBC Holdings Plc in 2007, according to Cushman & Wakefield.
Blackstone, based in New York, bought the stake from British Land Co. in a 2009 deal that valued the complex at 2.1 billion pounds. The private-equity firm put money into improvements and agreed to hold its interest for at least three years. British Land retains the other half of Broadgate.
Gordon Simpson, a spokesman for British Land at RLM Finsbury, declined to comment on the sale.