Government Fund Weekly News Roundup — Funds Target European Real Estate

April 08, 2016 by SWC Editors

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Qatari Diar Artist's impression of the Grosvenor House redevelopment. Source: Qatari Diar


In the news this week: Qatar Investment Authority, the Netherlands’ APG and Singapore’s GIC seal European property deals. Canada Pension Plan Investment Board takes a stake in Glencore’s agriculture unit for $2.4 billion. And China’s State Administration of Foreign Exchange mops up more bank stocks.


London's Mega-Landlords


Some things are indelibly associated with the city of London. Big Ben. Red buses. Black cabs. Humongous sovereign wealth fund property deals.

This week, Qatari Diar Real Estate Investment Co., a subsidiary of the Qatar Investment Authority (QIA), and Dutch pension-fund manager APG Groep signed an agreement that will see them assume joint control of vast swathes of residential property in the British capital.

QIA and APG have teamed up with British real estate investor Delancey to create a new £1.4 billion ($1.9 billion) joint venture. The venture will take ownership of Qatari Diar’s properties in the Olympic Village in East London, along with a portfolio of properties in South London owned by APG and Delancey. In total, the new partnership will control 4,000 newly-built rental homes and a further 1,000 that are currently under construction.

Separately, Qatari Diar has announced plans to convert the U.S. embassy building in Grosvenor Square into a luxury hotel. The firm bought the property in 2009 and plans to begin the $2 billion redevelopment after the U.S. government moves to new offices in the Nine Elms neighborhood of London next year.


GIC Invests in French Property

French real estate also attracted sovereign wealth funds’ interest this week. On Wednesday, Singapore’s GIC announced it has purchased a 25 percent stake in Paris-based property-management firm CeGeREAL for approximately €35.65 per share or €119 million ($135 million), giving the company a valuation of €476.7 million.

The seller was New York-based global real estate investment firm Northwood Investors, which will continue to hold a majority stake in CeGeREAL.

As it buys in France, however, GIC is preparing to sell in Germany. GIC has reportedly put the O2 Tower in Munich on the market for €350 million ($398 million). GIC bought the office building for €300 million (then $382 million) in 2006.

CPPIB Buys Glencore Unit for $2.5 Billion

Anglo-Swiss mining giant Glencore has spent much of the last year trying to offload assets as it grapples with plunging commodities prices and soaring debts — and its ongoing difficulties have created investment opportunities for government funds.

This week the Canada Pension Plan Investment Board (CPPIB) stepped in to acquire a 40 percent stake in Glencore’s agriculture unit, Glencore Agricultural Products (Glencore Agri), for $2.5 billion. CPPIB beat reported interest from GIC and QIA to secure the stake.

SAFE Resumes Efforts to Support Chinese Stocks

China's State Administration of Foreign Exchange (SAFE), which manages the country's vast foreign-exchange reserves and regulates the yuan, has reportedly restarted its bulk purchases of Chinese bank stocks.

SAFE was part of the so-called national team of investors that Beijing powerbrokers instructed to buy Chinese A-shares to support the volatile domestic equities markets in mid-2015. And the organization reportedly resumed its share-buying drive late last year using a little-known subsidiary called Wutongshu Investment Platform Co.

Wutongshu spent RMB 27 billion ($4.2 billion) on Chinese shares in the fourth quarter of 2015, buying large stakes in several major financial institutions including Bank of Industrial and Commercial Bank of China, the country’s biggest lender.



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