Singapore sovereign wealth fund GIC has acquired a 95 per cent stake in a 47-storey trophy office building on New York's famous Wall Street from the Paramount Group.
It has formed a joint venture with Paramount to buy 60, Wall Street, in a deal valuing the 1.6 million sq ft skyscraper at US$1.04 billion (S$1.5 billion), or about US$640 per sq ft.
This means GIC's 95 per cent stake could be worth US$988 million, although the exact sum it invested was not disclosed.
Paramount, a New York-based real estate investment trust, has the other 5 per cent, the firms said in a joint statement yesterday.
The office property in Lower Manhattan is fully leased to financial giant Deutsche Bank, serving as its United States headquarters.
"This investment reflects our long-term confidence in downtown Manhattan, which is benefiting from over US$30 billion of recent public and private investments in infrastructure and new construction," said GIC's regional head of Americas Adam Gallistel.
Paramount will continue to manage the building.
Mr Albert Behler, chairman, chief executive and president of Paramount, said: "We believe GIC's commitment to 60, Wall Street is reflective of its confidence in Paramount's management team and the strength of the New York City real estate market."
GIC said the office tower is one of the top buildings in downtown Manhattan - "poised to benefit from the ongoing downtown renaissance".
Last November, Deutsche said it will renovate 60, Wall Street to create a more open environment for staff, ahead of a 2022 lease expiration, according to Bloomberg News.
The bank had bought the office tower in 2001, then sold it to Paramount in 2007 and leased it back.
This latest acquisition followed several deals GIC has cut in the US in recent years.
Real estate-related deals included taking up an equity interest in Denver-based Yes Communities, an owner and operator of manufactured home communities, in August.
It also tied up with two other investors last January to form a joint venture to acquire a portfolio of US student housing units for US$1.4 billion.
CIMB economist Song Seng Wun told The Straits Times that it is an opportune time for GIC to invest in America.
"It is probably not a bad idea to buy US dollar assets; we are already seeing a strong US dollar and a recovering US housing market... If the US economy grows a notch faster, perhaps in 2018, then it should spill over to the real estate market as well," Mr Song said.
This article was first published on January 26, 2017.
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