(Bloomberg) -- GIC Pte, Singapore's sovereign wealth fund, is part of a group that is buying the headquarters of Time Warner Inc. in New York City, according to one person with direct knowledge of the transaction.
Located at Columbus Circle in Manhattan, the property is a 2.8 million-square-foot twin-tower development that includes offices, restaurants, and the Mandarin Oriental hotel, according to the Time Warner Center website.
The building adjacent to Central Park was opened in 2004 and attracts more than 16 million visitors a year. GIC declined to comment on the transaction in an emailed statement.
Sovereign funds globally are increasing allocations to alternative assets, including real estate, infrastructure, and private equity, in an effort to diversify their investments.
The share of such assets in GIC's portfolio has increased to 26% as of March from 23% five years ago, according to the fund.
"Assets like Time Warner Center are absolutely core and trophy in nature," said Priyaranjan Kumar, the Singapore-based regional director of capital markets at property broker Cushman & Wakefield Inc.
"Ownership in such assets assures investors of a durability of cash flows as these kind of properties always outperform the market during phases of recovery and prove very resilient even in downturns."
California building
The latest investment is similar to the state fund's purchase of San Francisco's 101 California Street building through another group last year, the person said, asking not to be identified because the information isn't public.
The San Francisco tower was valued at about $900 million, one person with direct knowledge of the matter told Bloomberg News in October 2012. Keith Cocozza, a spokesman for Time Warner, couldn't be reached for a comment at his New York office after business hours.
Time Warner would sell its 1.1 million-square-foot space at its namesake complex to an investment group led by the Related Cos. for more than $1.3 billion and move to a new skyscraper planned on Manhattan's far West Side, a person with knowledge of the negotiations said in July.
The owner of cable channels will lease Time Warner Center back for five years, about the time it would take to build the skyscraper at Related's Hudson Yards Project on the far West Side, the person said.
Joanna Rose, a spokeswoman for Related, which was the lead developer of Time Warner Center, declined to comment today on GIC's investments.
Cost-effective properties
Time Warner has been searching for a more cost-effective real estate presence in New York, where its offices are spread among several Midtown buildings. Time Warner divisions with large Manhattan offices include the CNN news network, the HBO cable channel, and the Time Inc. magazine business, which is being spun off.
State funds' investments in alternative assets rose 26% in value in the past year, Invesco Ltd. said in September, citing a survey of 29 global sovereign wealth funds controlling about 80% of the assets.
GIC said last month it signed a pact to buy a 47-story office tower in Jakarta's central business district. GIC also was the purchaser of Blackstone Group LP's stake in London's Broadgate office complex, two people with knowledge of the transaction said in August.
GIC bought 50% of Broadgate, a cluster of 16 office buildings, shops and restaurants in the City of London financial district, according to the people, who asked not to be named because the deal is private.
State funds
China Investment Corp., the nation's sovereign wealth fund, is in talks to buy a west London office development from Blackstone, a person with knowledge of the matter said earlier this month.
Norway's state fund is seeking to increase the share of real estate in its portfolio to 5% from 0.9% at the end of September.
The Kuwait Investment Authority is interested in resuming spending on London property, the U.K. capital's mayor Boris Johnson said this week. GIC's U.S. assets increased to 36% of its portfolio as of March, from 33% a year earlier, the fund said in August.
The U.S. economy was "furthest along" in recovering from the global financial crisis, it said at the time.
"Sovereign wealth funds by nature are relatively risk averse and seek steady long-term income," Mr. Kumar said. "This translates into seeking investment opportunities that are largely insulated from vacancy or construction risks."
crainsnewyork.com
Located at Columbus Circle in Manhattan, the property is a 2.8 million-square-foot twin-tower development that includes offices, restaurants, and the Mandarin Oriental hotel, according to the Time Warner Center website.
The building adjacent to Central Park was opened in 2004 and attracts more than 16 million visitors a year. GIC declined to comment on the transaction in an emailed statement.
Sovereign funds globally are increasing allocations to alternative assets, including real estate, infrastructure, and private equity, in an effort to diversify their investments.
The share of such assets in GIC's portfolio has increased to 26% as of March from 23% five years ago, according to the fund.
"Assets like Time Warner Center are absolutely core and trophy in nature," said Priyaranjan Kumar, the Singapore-based regional director of capital markets at property broker Cushman & Wakefield Inc.
"Ownership in such assets assures investors of a durability of cash flows as these kind of properties always outperform the market during phases of recovery and prove very resilient even in downturns."
California building
The latest investment is similar to the state fund's purchase of San Francisco's 101 California Street building through another group last year, the person said, asking not to be identified because the information isn't public.
The San Francisco tower was valued at about $900 million, one person with direct knowledge of the matter told Bloomberg News in October 2012. Keith Cocozza, a spokesman for Time Warner, couldn't be reached for a comment at his New York office after business hours.
Time Warner would sell its 1.1 million-square-foot space at its namesake complex to an investment group led by the Related Cos. for more than $1.3 billion and move to a new skyscraper planned on Manhattan's far West Side, a person with knowledge of the negotiations said in July.
The owner of cable channels will lease Time Warner Center back for five years, about the time it would take to build the skyscraper at Related's Hudson Yards Project on the far West Side, the person said.
Joanna Rose, a spokeswoman for Related, which was the lead developer of Time Warner Center, declined to comment today on GIC's investments.
Cost-effective properties
Time Warner has been searching for a more cost-effective real estate presence in New York, where its offices are spread among several Midtown buildings. Time Warner divisions with large Manhattan offices include the CNN news network, the HBO cable channel, and the Time Inc. magazine business, which is being spun off.
State funds' investments in alternative assets rose 26% in value in the past year, Invesco Ltd. said in September, citing a survey of 29 global sovereign wealth funds controlling about 80% of the assets.
GIC said last month it signed a pact to buy a 47-story office tower in Jakarta's central business district. GIC also was the purchaser of Blackstone Group LP's stake in London's Broadgate office complex, two people with knowledge of the transaction said in August.
GIC bought 50% of Broadgate, a cluster of 16 office buildings, shops and restaurants in the City of London financial district, according to the people, who asked not to be named because the deal is private.
State funds
China Investment Corp., the nation's sovereign wealth fund, is in talks to buy a west London office development from Blackstone, a person with knowledge of the matter said earlier this month.
Norway's state fund is seeking to increase the share of real estate in its portfolio to 5% from 0.9% at the end of September.
The Kuwait Investment Authority is interested in resuming spending on London property, the U.K. capital's mayor Boris Johnson said this week. GIC's U.S. assets increased to 36% of its portfolio as of March, from 33% a year earlier, the fund said in August.
The U.S. economy was "furthest along" in recovering from the global financial crisis, it said at the time.
"Sovereign wealth funds by nature are relatively risk averse and seek steady long-term income," Mr. Kumar said. "This translates into seeking investment opportunities that are largely insulated from vacancy or construction risks."
crainsnewyork.com
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