Singapore sovereign wealth fund GIC bets on property bounce

Singapore sovereign wealth fund GIC has ploughed millions into a new vehicle run by EG Funds Management.

GIC is at the vanguard of a ­series of Singaporean managers who are snapping up local industrial and office properties they believe will come though the coronavirus crisis.

Singapore sovereign wealth fund GIC has stepped up with a fresh property play and has ploughed millions into a new vehicle run by EG Funds Management as it continues to back a recovery of the local sector.

GIC is at the vanguard of a ­series of Singaporean managers who are snapping up local industrial and office properties they believe will come though the coronavirus crisis.

Real estate fund manager EG said it had successfully secured a project agreement with GIC that gave it the initial capacity to buy up to $400m worth of commercial real estate.

The fund manager said the GIC mandate followed on the success of its Yield Plus Infrastructure Fund No 2, which acquired income producing real estate near new or upgraded transport infrastructure.

EG said it was now analysing current opportunities for the final round of investment for YPI2, originally launched in 2016. The unlisted real estate fund has already secured 10 assets, and is drawing international investor attention.

“The strategy targets commercial, industrial and retail assets in close proximity to transport and community infrastructure in Sydney and Melbourne,” EG associate director Sean Fleming said.

EG executive director Roger Parker said GIC would back the “next iteration” of the investment strategy, which would focus on revitalising assets and neighbourhoods. “We look forward to a new long-term relationship,” he said.

The Australian reported on Monday that Singapore’s sovereign wealth fund had emerged as one of the biggest commercial real estate investors of the coronavirus crisis and is doubling down on its bet on Australia’s shift to ­e-commerce.

GIC last week took its commitment in the logistics-focused commercial property fund, run by Hong Kong-based ESR, to about $480m, positioning it to undertake more projects in the booming warehouse sector.

The move follows Singapore’s GIC already spending billions of dollars in Australia during the depths of the COVID pandemic, buying offices, warehouses and service stations.

Under the latest deal, GIC bought a further 35 per cent interest in ESR Australia Logistics Partnership, giving it an 80 per cent stake.

It had already tipped $400m into another ESR fund in June that will develop and hold a separate pool of warehouses in Sydney, Melbourne and Brisbane.

The fresh commitments indicated Singapore Inc is still scouring the local market for properties to buy and develop, particularly those that are relatively unaffected by, or even benefiting from, the pandemic.

GIC’s real estate unit is also pushing into new areas. This year it teamed with local fund manager Charter Hall to take interest in the $1.4bn Ampol service station portfolio.