The Qatar Investment Authority made progress on two big
London real estate deals this week. Elsewhere,
Singapore’s state-owned asset managers continue to
target India and Norway made a big investment in U.S. logistics
It’s been a busy month for the Qatar Investment Authority (QIA).
Sovereign Wealth Center research suggests that the fund spent
some $2.3 billion on shares in Royal Dutch Shell and BG Group
following their merger on April 8. Now QIA has turned to
augmenting its real estate portfolio.
On Monday, QIA and Canadian real estate investor Brookfield
Property Partners completed their protracted £2.6 billion
(3.89 billion) takeover of London’s Canary
Wharf after buying out the remaining shareholders in Canary
Wharf Group (CWG), the holding company for the eponymous
financial district. QIA and Brookfield's joint venture had
already agreed to buy Songbird Estates, the company that owned
69 percent of CWG, in January, and now has full control of the
QIA also appears to have tied up another big London real
estate deal too. On April 23 a spokesperson for British
billionaires David and Frederick Barclay said they had reached
an agreement to sell their stake in Coroin, the holding company
for Maybourne Hotel Group, which owns and manages three
landmark London hotels, to QIA’s Constellation
The Abu Dhabi Investment Authority (ADIA) bid
£1.6 billion ($2.4 billion) for the portfolio, which
includes the Berkeley, Claridge’s and the
Connaught, in March, but the offer lapsed as the Barclay
brothers and Irish entrepreneur Paddy McKillen, who owns the
remaining shares, could not agree on the sale. The size of
QIA’s offer is not clear, but Financial Times
sources say the price "might be a bit toppy," which suggests
something close to ADIA’s mammoth bid.
QIA is targeting real estate in emerging markets, too, as
part of a wider strategy that will see it deploy $15 billion
into Asia over the next few years. According to the South
Korean media, the fund is competing with U.S. financial
services giant Goldman Sachs to acquire the Keangnam Hanoi
Landmark Tower, the tallest building in the Vietnamese capital,
from Seoul-based Keangnam Enterprises, a construction firm
currently mired in a corruption scandal. QIA has apparently
made a cash offer of $800 million for the property, which
comprises office space and a luxury hotel. Qatari Diar,
QIA’s real estate arm, has also signed an
agreement with Bangkok-based hospitality group Minor
International (MINT) to manage two luxury resorts in Tunisia, which have
been in the pipeline for over half a decade.
Singapore and India
Singapore’s state owned asset managers continue
to pour capital into India, suggesting their confidence in
Narendra Modi’s economic reforms and the bulging
wallets of India’s middle classes.
GIC and Temasek have reportedly picked up shares
in Sun Pharmaceutical Industries, one of India's largest
pharmaceuticals firms, from Japanese conglomerate Daiichi
Sankyo. The Tokyo-based firm sold its entire holding of 8.9
percent in the Indian company this week on the open market: GIC
acquired a 0.46 percent stake for 1.2 billion Indian rupees
($187 million) and Temasek 0.74 percent for INR 1.9 billion.
Temasek also backed another Indian drugmaker, Glenmark
Pharmaceuticals, providing an $151 million equity infusion.
Singapore’s state-owned investors have also
been active in other parts of the Indian economy. GIC led a INR
1.2 billion financing round for Chennai, India-based
Sulekha.com, a digital classified advertising platform.
Temasek, meanwhile, partnered with London-based private equity
firm Advent International to buy Crompton Greaves Consumer
Electricals, the consumer business of Indian conglomerate
Avantha Group, in a deal that values the company at INR 66
Norway’s Big Logistics Deal
One of the key investment trends of recent months has been
theinterest from sovereign wealth funds in
logistics centers; this appears to be a bet on the
continuing shift in consumer spending patterns toward online
shopping, which requires delivery hubs.
Norges Bank Investment Management (NBIM), the arm of the
central bank that oversees Norway’s giant
sovereign wealth fund, made one of the biggest deals in the
sector so far this week. Its Prologis U.S. Logistics Venture
with San Francisco-based real estate investment company
Prologis announced on April 19 that it will buy a 60 million
square foot industrial portfolio in the U.S. NBIM will acquire
its 45 percent interest for $2.3 billion, and Prologis will
take the remaining 55 percent stake, valuing the total
portfolio at $5.9 billion.
And on April 24, NBIM announced that the joint venture would
buy two further logistics centers in Seattle for $63.3
million. NBIM will take a 45 percent stake in the two
properties for $28.5 million.