GIC in €300m German office deal

GIC Real Estate, the property investment wing of the government of Singapore, has snapped up Munich’s tallest office building from US developer Hines in a €300 million-plus ($384 million) deal.

The 38-store property at 50 Georg-Brauchle-Ring, also known as the Uptown Munchen Tower, is one of two properties GIC is buying from the American developer. The other is 56/58 Georg-Brauchle-Ring, which is on the same five-building complex that Hines completed in 2005.

GIC invests Singapore’s foreign reserves in assets outside Singapore and its property arm ranks among the world’s top 10 global real estate investment firms.

The German deal is in line with its strategy to build a global office portfolio. It will be added to other prime offices including 30 Gresham Street in London, the Shiodome Center in Tokyo, Seoul Finance Centre in Seoul and the Chifley Tower in Sydney.

It is also a bet on Munich’s office market improving, which is at a low point in the current property cycle.

President of GIC Real Estate, Dr. Seek Ngee Huat, said in a statement: “In light of improving prospects in the German markets, we will continue to look for investments in quality assets across the property sectors.”

The Uptown Munich Tower is let to mobile phone company O2 Germany for a fixed 15 years. The other office investment is leased to Hines, Adobe Systems, and two local companies.

Hines, which was formed by legendary developer Gerald Hines in 1957, has already sold the other three buildings on the campus in the Olympic Park office area close to the City’s historic centre.

Munich based Colliers Property Partners advised the seller.

As well as being active in property, GIC – through its Special Investments division – has also been aggressive in bidding with private equity firms and investment banks for public companies.

For example in June it won a hotly contested battle to buy Britain’s biggest ports group, AB Ports, for $5.1 billion (£2.8bn).

In that instance it teamed up with Goldman Sachs and Borealis Infrastructure Management, part of Canada’s Ontario Municipal Employees Retirement System.