Singapore’s sovereign wealth fund GIC Pte. is joining Ascendas Pte. to invest as much as S$600 million in commercial property in India, according to a company announcement. The venture has launched the Ascendas India Growth Programme to invest in business space in cities including Bangalore, Chennai, Delhi National Capital Region, Hyderabad, Mumbai, and Pune. Korean subsidiary, Kendall Square Asset Management/The Canada Pension Plan Investment Board (CPPIB) and ASX-listed Goodman Group have committed another $1.75 billion to their China logistics partnership and plan to double the size of their mainland portfolio, Allianz is contributing half of the equity for an initial $225 million capitalization of a joint venture with Asian warehouse development specialist ESR to acquire logistics facilities in India Salaam,Tanzania will become Africa’s biggest port, created by 10 billion dollar funding from Sultanate of Oman’s sovereign-wealth fund and China s Exim Bank. Developed by Actis, an emerging market investor responsible for the Junction Mall and Nairobi Business Park, Garden City is a $540m flagship project comprising one of the largest retail malls in East Africa, offering retail, over 400 residential units, offices and a central park. Mega-projects across Africa are up 46% percent and is worth $326 Billion.
Indian warehouse developer Indospace announced the final close of what it says is the largest-ever logistics fund targeting India, having raised $580 million in equity for fund a joint venture between Singapore’s GLP and Mumbai-base Infospace. Global Logistic Properties is teaming up with GIC to create a $2 billion value-add fund for acquiring logistics properties in mainland China. The Canada Pension Plan Investment Board (CCIP) that it is investing in a new $500 million in investment fund targeting South Korean logistics assets in cooperation with ESR. In 2019 Bahrain based asset manager Investcorp announces the start of its operations in India with the acquisition of the private equity and real estate management business IDFC Alternatives Ltd for $430M, the deal received approval from the Securities Exchange Board of India (Sebi). King Salman of Saudi placed cornerstone to begin $2.5 billion public hospital project in Riyadh. Investcorp and Aberdeen Capital launch a 1 billion dollar fund focused on the Gulf countries. The Saudi King Salman also announces to $705B infrastructure road connecting Saudi to Jordan with funding from PIF. Taubman Centers announced late last week that it has agreed to sell a 50 percent stake in the shopping center assets of its Asian division to US alternative investment giant Blackstone in a deal valued at $480 million. The transaction gives Blackstone significant holdings in three fully-leased shopping centers – one each in the Chinese cities of Xi’an and Zhengzhou, and a third in the South Korean city of Hanam – as Stephen Schwarzman’s New York-based firm continues to buy up retail properties in Asia.Manulife Asset Management Services Bhd (MAMSB) expects its Manulife Asia Total Return Bond Fund to exceed over RM100 million in sales over the next one to three months. Developed by Actis, an emerging market investor responsible for the Junction Mall and Nairobi Business Park, Garden City is a $540m flagship project comprising one of the largest retail malls in East Africa, offering retail, over 400 residential units, offices and a central park. TPG Capital Asia VII with commitments of over $4.6 billion to invest in India and Asia.
For the first time in 2018 foreign direct investment has fallen mainly in richer nations, including Ireland (down $81 billion) and Switzerland (down $77 billion), developing economies saw FDI flows declining “only slightly” in the first half of the year by four percent, to $310 billion, compared with 2017. This includes developing Asia – down four percent – to $220 billion – in the same period, driven mostly by a 16 percent decline in investment in East Asia. China, the notable exception, was, in fact, the largest recipient of foreign direct investment in the first half of 2018, attracting more than $70 billion.
Occasionally international equities can signal trends in global capital flow and geography. Here is the type of global equities funds that investor bought and sold based on growth in 2018. (1) China up 35%, (2) Diversified Emerging up 4.9% (3) Latin America up 4.3%(4)Foreign/World up 3.9% what investors sold Diversified Asia/Pacific down -5.6% Pacific/Asia (ex-Japan)Japan down -9% India down -11.3% Europe down -23.4%
When considering global portfolio diversification in commercial real estate( CRE) one must know the knowable fundamentals of investment, one must understand the value and what price one is willing to pay, one must understand the environment and psychological behavior of where one has invested and fine-tuned one portfolio for performance and exit. But most of all remember that the knower, the known, and the knowledge is one.
Idea/ concept is the major influence for global development projects and is even more pronounced for real estate investment. The perception or recognition of the opportunity is the key investment driver of value. Global fund managers must remember when considering home bias investing and global financial allocation- that there is no apparent distinction between those factors that create value and those that destroy value, although there are variations in the magnitude of impact.