“Impressionante “ nel 2012 l’ attività dei Fondi Sovrani nel real estate

«Real estate has always been a sector of choice for sovereign investment, but 2012 activity in the sector
has been particularly impressive. With 53 publicly reported deals worth $15 billion, the percentage
of total value invested in the sector increased by 50 percent with respect to 2011, reaching an alltime
high of 26 percent of total value, surpassing the total amount raised in the financial industry.
Several factors can explain the surge in interest in real estate deals.
First of all, despite recent trends, real estate property still represents a “safe” asset type in the long term, and as such particularly
attractive in an environment of rising inflation expectations.
Second, after the last couple of years seeing the busting of a real estate price bubble, many real estate markets appear particularly cheap.
Third, real estate investments, with their relatively low liquidity, tend to appeal particularly to longterm
investors such as SWFs – and, at least in theory, offer a liquidity premium in the form of higher
risk-adjusted returns. In the current low-interest rate global economy, this liquidity premium looks
particularly attractive.
2012 marks not only an increase, but also an important shift in SWFs’ investment behaviour in
the sector. Traditionally interested in brick-andmortar icons of Western most attractive cities, SWF
have started to play a key role also as real estate developers in emerging countries, broadly diversifying
by target country and project type.
Temasek formed an alliance with Khazanah Nasional Berhad, the Malaysian SWF, to develop two com-
mercial property projects in Singapore and in Malaysia: the $4.6 billion joint venture named M+S
Pte Ltd to develop land parcels in Marina South and Ophir-Rochor in Singapore, and the $952
Pulau Indah Venture for commercial development in Iskandar, Malaysia. While the development of
domestic property markets is the clear objective of this collaboration between SWFs, foreign penetration
in BRICs appears to be the aim of the Stabilized JV, another joint real estate deal involving
CIC and GIC as partners. The two Asian SWFs committed a total of $612 million to expand the
Brazilian activities of Singapore based Global Logistic Properties, the world second largest owner
of industrial facilities.
While 2012 clearly showed this type of portfolio rebalancing in favour of new developments, the
usual European “safe havens” still attracted considerable investments by SWFs. The total value of
reported real estate transactions involving European targets is $6.6 billion and, as usual,
London sticks out as the location of choice. In 2012 SWFs placed in the property market of London 11
deals worth $2.7 billion. Amongst the most significant deals, the Qatar Investment Authority (QIA),
CIC and KIA purchased 1 Cabot Square, 1 Great Winchester Street and 1 Bunhill Row, respectively.
By no means did the City of London exhaust SWFs’ appetite for high quality assets in Europe. The
Norwegian GPFG completed the second largest deal of the year in the sector by acquiring the
Uetilhop office complex in Zurich, while QIA expanded its portfolio in the French market, buying
in Paris with nothing less the historical building on the Champs-Eliseès hosting the Lido».
 
Source : SWF Annual Report – Paolo Baffi Centre, Università Bocconi