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GIC Real Estate (GIC RE) today entered into an agreement with New World Development to acquire 15 floors of offices and 52 car-parking spaces in the High Block of the Grand Millennium Plaza in Hong Kong. The HK$1.26 billion (about S$280 million) transaction was sealed this afternoon and is to be completed by end October 2000.
This is part of GIC RE’s larger strategic efforts to build a portfolio of prime office properties in Asia. The latest transaction follows closely on the heels of GIC RE’s earlier purchase of the entire Low Block in the same development in Hong Kong’s Central Business District. GIC RE now owns 55% of the gross floor area at the prime Grade A office blocks in the Grand Millennium Plaza development in 181~183 Queen’s Road, Central.
Dr Seek Ngee Huat, President of GIC RE, said, “Given Hong Kong’s very strong economic growth in the last 12 months, we are optimistic about the outlook of its commercial property market.”
The Grand Millennium Plaza acquisition is GIC RE’s first foray into the Hong Kong office property market. In June 2000, GIC RE acquired the Low Block which comprises 23 floors of offices, a three-floor retail podium and 34 car-parking spaces, for HK$1.38 billion (S$307 million). It was the largest office investment transaction in Hong Kong since mid-1997.
GIC RE has started to lease out the Low Block and in line with the recovery of Hong Kong’s leasing market, has received very encouraging response. The firm also appointed DTZ Debenham Tie Leung as leasing consultant for the retail podium at the Low Block. Formal leasing started from 1 July 2000. The 15 office floors in the High Block is partially occupied and the vacant space will be released to the market for leasing by the end of the year.
The investment in the Grand Millennium Plaza is the latest in a series of recent property investments in Asia by GIC RE. Since the beginning of this year, the company has also acquired a portfolio of office buildings in Tokyo from the Japan Building Project company; the Sigma Tower, Seoul Finance Centre and the Asiana Building in Seoul, Korea; and an office building in a mixed-used development complex known as the Beijing Onward Science & Trade Centre in China. This complex, situated in Chao Yang District, the heart of Beijing’s Central Commercial District, consists of four Grade A office buildings and two serviced apartment towers. The office building was acquired for US$71.4 million in April this year, following GIC RE’s joint venture with Somerset Holdings in December 1999 to acquire the two serviced apartment towers.
GIC RE is now the largest single owner within the Beijing Onward Science & Trade Centre. Leasing for the office building commenced from 1 August 2000, and the building is expected to be substantially occupied in the last quarter of this year.
On the pace of GIC RE’s investments in the region, Dr Seek said, “As a well-diversified global investor in real estate, GIC RE’s exposure to Asian real estate will continue to be substantial. Despite the recent financial crisis, the long-term fundamentals of Asia remain sound. The recovery we are witnessing in various Asian markets not only brings forth a new sense of confidence, but also a variety of investment opportunities.”
He added, “We have been positioning ourselves in various markets in the Asian region since the financial crisis. Our recent acquisitions of office properties in Korea, Japan, China and Hong Kong are just some examples of the fruits of our labour. ”
On GIC RE’s future plans, Dr Seek said, “As the region recovers and confidence returns to the market, we are also seeing more investment opportunities in the different property sectors. While office and serviced apartments were our recent focus, we are also constantly on a lookout for a wide range of direct and indirect real estate investments in Asia as well as other parts of the world.”
GIC Real Estate Pte Ltd (GIC RE) is a pre-eminent global real estate investment manager. The firm manages a multi-billion dollar portfolio of direct and indirect property investments worldwide. GIC RE is the real estate investment arm of GIC, a fund management company established in 1981 to manage the foreign reserves of Singapore by investing globally. Reflecting its global orientation, GIC RE operates out of offices in key financial centres around the world and is headquartered in Singapore.
For further information, please contact:
Mr Anthony Ang
Executive Vice President,
Admin & Corporate Affairs
GIC Real Estate
Tel: 65 68896923
Ms Celeste Tay
Assistant Vice President, Admin & Corporate Affairs
GIC Real Estate
Tel: 65 68896893
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