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 properties.
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 estate.
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 Hotels.
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’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 billion.
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.