Singapore’s GIC Sovereign Wealth Fund Grabs 50% Stake in UK Mall for $60 Mil

Singapore’s sovereign wealth fund GIC has made its fourth European real estate investment in the past four months – this time snatching up a 50 percent stake in a new shopping mall in the UK for 48.5 million pounds ($60 million).

The fund said on Friday that it is buying the stake in the 17,000 square metre Watermark retail complex in Southampton from European property developer Hammerson. The mall near England’s southern coast flung its doors open in December and is already 95 percent leased. It will provide a stable annual income of 5.5 million pounds when fully occupied, according to a GIC statement.

GIC Takes a European Tour

This latest transaction follows the sovereign wealth fund’s November purchase of P3 Logistic Parks, a top European warehouse developer and manager for $2.7 billion. That logistics investment, which was said to be Europe’s biggest real estate transaction of 2016, was preceded by a pair of student housing deals. In September GIC joined with student accommodation developer GSA to buy a 7,150-bed UK student housing portfolio from funds managed by Oaktree Capital Management. The same pair teamed up again in October to buy another 1,000 beds of student housing in Germany.

GIC’s acquisitions of European assets coincide with the US dollar gaining more than five percent in value against the Euro during the second half of 2016. In that same period, the British pound lost more than eight percent of its value against the greenback. In a move that would potentially allow GIC to sell off one of its highest profile US asset portfolios, warehouse developer Global Logistic Properties announced last month that it had hired US investment bank JP Morgan to look into a potential sale of the $6 billion company. GIC, which is GLP’s largest shareholder, had reportedly requested the strategic review of the developer’s market value.

Singapore Likes Shopping in the UK

“To remain competitive in an age of e-commerce, retail destinations need to offer attractive consumer leisure experiences to boost footfall and customer retention,” said Madeleine Cosgrave, Regional Head for Europe with GIC Real Estate. “We believe Watermark’s diverse tenant mix and offerings will provide these experiences and enable Westquay, which is already a prime regional mall, to continue generating good returns over the long term.”

GIC and Hammerson have previously worked on a joint venture for the Westquay shopping centre, which is adjacent to the Watermark.

GIC bought a 50 percent stake in the Westquay in 2007 for 299 million pounds. And the wealth fund said in the statement announcing the Watermark deal, that the tenure of the Westquay joint venture has been extended, and Hammerson will receive a fee for the ongoing asset management of the two malls.

According to David Atkins, CEO of Hammerson, the new restaurant-and-leisure complex at the Watermark is the largest development of its kind in the UK.

The newly opened mall has more than 20 restaurants, including American hamburger chain Five Guys, sourdough pizza joint Franco Manca and London burger chain Byron. It also hosts a bowling centre and a 10-screen cinema.

Formerly known as the Government of Singapore Investment Corp, GIC manages Singapore’s foreign reserves with a focus on long-term performance. It’s estimated to have $344 billion of assets under management, making it the world’s eighth largest. Its portfolio spans more than 40 countries, including real estate, equities and fixed-income investment.