GIC makes $350m Indonesia RE return

The Singapore sovereign wealth fund has returned to the Indonesian real estate market with the acquisition of an office in Jakarta’s central business district.

GIC Private, the Singaporean sovereign wealth fund formerly known as the Government of Singapore Investment Corporation, has made its first investment in Indonesia’s real estate market since 2009 with the acquisition of a 47-story grade A office tower development in the heart of Jakarta’s central business district.

The size of the deal was not disclosed, but PERE understands this to be an approximately $350 million commitment from GIC. The office tower itself is part of a mixed-used development that includes a luxury 6-star hotel and a retail podium for food and beverage outlets, according to a statement.

Local media reports have estimated the cost of the entire development to be approximately $400 million. It is expected to be completed in 2015.

The developer is Greenland Rajawali Utama, a joint venture company majority owned by the property subsidiary of Indonesian investment conglomerate Rajawali Group. The project is to be built to international standards, and must be certified by the Singaporean government.

“The office building is a welcomed addition to our global portfolio of quality assets located in prime locations of major cities,” Lee Kok Sun, co-head of Asia at GIC Real Estate, said in the statement. “Demand for high quality office space in the Jakarta CBD offers significant growth opportunities. We believe GIC, as a long-term investor, is in a good position to seize these opportunities together with more like-minded partners.”

It is hoped the office tower, one of the few buildings in Jakarta considered to be of institutional quality, will attract multinational corporations, local conglomerates and financial institutions in Indonesia.

“Jakarta is an emerging hub with tremendous opportunities and potential, but lacks trendsetting integrated developments of international standards. Through this development, we want to catalyze the process of transforming Jakarta into a strategic business and financial hub for the region,” said a Rajawali spokesman in the statement. Rajawali and GIC also said that they hoped to make this project the beginning of a longer-term partnership in Indonesia.

With approximately $248 billion to its name, GIC has invested into over 40 countries since its inception in 1981. The sovereign wealth fund has been investing in Indonesian real estate since the 1990s, but this is understood to be the fund’s first real estate investment in the country since the onset of the global financial crisis.

Global property services firm Jones Lang LaSalle is understood to have brokered the deal.