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GIC returns to Indonesia with a $500m JV

The Singaporean sovereign wealth fund continues its relationship with the Rajawali Group with a second real estate investment in Indonesia.

Singapore’s sovereign wealth fund GIC Private Limited has announced a partnership with the Rajawali Group, one of the largest privately-owned investment companies in Indonesia, to jointly invest $500 million in equity in real estate projects in the country. 

The venture will invest in office, retail, residential and mixed-use projects mainly in the central business district of Jakarta, GIC said in a statement.

“GIC is confident in Indonesia’s long-term growth potential and believe we can create value through the acquisition of assets in prime locations and active asset management,” said Loh Wai Keong, co-head, Asia at GIC Real Estate. “An integral part of our investment strategy is to build long-term partnership with reputable local partners with strong track records like Rajawali, who also share our investment values.”

This is not the first time the two groups have teamed up. In November last year, GIC made its first real estate investment in Indonesia with the acquisition of an office building in Jakarta’s central business district in a deal worth $350 million. Rajawali was responsible for developing the 47-storey Grade A office tower, which is part of a mixed-use development due for completion by end of next year.

“This joint venture is significant as it paves the way for a long-term partnership with GIC and allows Rajawali to develop ground breaking projects in Indonesia, which we believe is an exciting real estate investment destination,” said Shirley Tan, chief executive officer of the group.

High growth and favorable demographics along with a newly-elected pro-business government has made Indonesia an emerging investment destination for many Asian-focused institutional investors. Many offshore investors such as the Hong Kong-based Phoenix Property Investors and Singapore’s Ascendas are said to be actively engaging in acquiring real estate in Jakarta.

With well over $100 billion in assets under management, GIC has branched into many developing real estate markets in the last one year, even as it continues to build its portfolio of landmark trophy assets. 

Earlier this month, it made its first real estate investment in Turkey, acquiring a 20 percent stake in the Istanbul-based developer Ronesans Gayrimenkul Yatirim (RGY) for $220 million via a rights issue. A day later, the state fund announced its first property venture in New Zealand – a NZ$330 million (€205.44 million; $256.54 million) joint venture partnership with Goodman Property Trust. One of its most high profile investments this year was the acquisition of Tokyo’s landmark Pacific Century Place’s office complex for ¥170 million (€1.15 million; $1.3 million) in October.