http://www.straitstimes.com/premium/...tower-20121025
GIC 'investing in $1.1b San Francisco tower'
It is said to be part of group buying 48-storey building in financial district
Published on Oct 25, 2012
THE Government of Singapore Investment Corp (GIC) is reportedly investing in a high-end office tower in San Francisco valued at about US$900 million (S$1.1 billion).
It is part of a group buying the 30-year-old building at 101 California Street, Bloomberg said yesterday, citing an unnamed source.
The 48-storey, 1.2 million sq ft building in the city's financial district is owned by Nippon Life Insurance and its partner Hines.
The sale of 101 California reflects the increased interest in US real estate by international sovereign funds, Real Capital Analytics managing director Dan Fasulo told Bloomberg.
"101 California is the kind of trophy asset that every sovereign fund is looking for."
Its tenants include Morgan Stanley and Deutsche Bank.
GIC declined to comment on the report. It is a large real estate investor in the US, owning the Franklin Centre, a 60-storey skyscraper, for example.
GIC is also in a bid to take over a group of bankrupt hotels owned by hedge fund Paulson and Co, including the Arizona Biltmore Resort and Spa in Phoenix and La Quinta Resort and Club in La Quinta, California.
GIC had 10 per cent of its portfolio allocated to real estate for the year ended March 31, unchanged from the previous year, the fund said in its latest annual report.
Investments in the US accounted for 33 per cent of its portfolio, also unchanged from last year.
San Francisco has the best five-year outlook for rent growth of any US office market, real estate research firm Green Street Advisors said in a report last week.
This is due to leasing demand from technology firms and strict regulations on new developments.
Buildings in the city are estimated to reap an 11 per cent gain this year in revenue per available square foot, more than double the advances in Boston or San Jose, its closest rivals, Green Street said.
"San Francisco is a key gateway market, so it is a natural draw for foreign real estate investors looking for US office exposure," said Green Street managing director Michael Knott.
"What is different this cycle is tech prowess seems sustainable, whereas finance and government, which drive New York and Washington, DC and were rock stars the last go-around, are now open to more doubt and uncertainty."
Institutional investors from Asia are looking to increase their direct investment in US property, Association of Foreign Investors in Real Estate chief executive Jim Fetgatter told Bloomberg.
San Francisco was the fifth most popular investment location behind New York, London, Washington and Sao Paolo, said a 2012 survey of the group's members.
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