GIC’s real estate arm may list logistics business in IPO

The real estate arm of the Government of Singapore Investment Corp may list its logistics business in an initial public offering, according to reports.

The listing, possibly in Singapore, will reportedly involve GIC Real Estate’s Japanese assets, including ProLogis Holdings, which provides distribution facilities.

The IPO is estimated to be valued at between US$500 million and US$1 billion and could take the form of an industrial real estate investment trust (REIT).

Song Seng Wun, regional economist, CIMB, said: “Floating a REIT-like structure will enable GIC to raise funds for new investments, as well as earn fees from outside investors, following in the footsteps of sovereign funds such as Abu Dhabi and China Investment Corp. It will deepen the REIT segment in Singapore as well.”

Observers speculate that the listing could take place later this year, depending on market conditions.

Analysts believe the move is part of initial plans by GIC Real Estate to reduce its risk exposure to its large stake in ProLogis. GIC had bought the property funds of ProLogis in Japan and its China operations for US$1.3 billion two years ago.

When contacted, a GIC spokesperson declined to comment.

GIC Real Estate ranks among the world’s top-10 real estate investment firms. It invests globally in real estate and real estate-related assets outside Singapore, with close to 200 investments in more than 30 countries.

Reports said JP Morgan and Citigroup are among the banks leading the talks for the IPO.

Source : Channel NewsAsia – 26 May 2010

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