Singapore GIC eyes logistics IPO

SINGAPORE: The Government of Singapore Investment Corp (GIC) may list its logistics business in the city-state in an IPO valued at up to US$1 billion, sources with knowledge of the deal told Reuters.

The deal will allow the world's fourth-biggest sovereign fund to raise cash for more investments. The US$300 billion fund has been more active in dealmaking in recent months after it reduced its exposure to equities at the start of the credit crisis.

GIC is underwriting British insurer Prudential Plc's US$21 billion rights issue and has bought stakes in newly listed companies such as Hyatt Hotels and Shanda Games.

The logistics business is part of GIC Real Estate, or GIC RE, which ranks among the world's top-10 real estate investment firms.

GIC, Singapore's biggest sovereign wealth fund, declined comment.

The timing for the IPO -- which sources said could be between US$500 million and US$1 billion -- is uncertain due to global market volatility, but a listing could happen later this year.

The sources could not be identified as the deal is not public.

"The proposal was to list their logistics business," said a source aware of GIC's plan. "They could do an industrial REIT (real estate investment trust)."

An IPO would include assets in China and Japan that GIC's real estate unit bought from ProLogis, one of the world's largest warehouse owners and developers, for US$1.3 billion in late 2008, one of the sources said.

Song Seng Wun, an economist at Malaysia's CIMB, said floating a REIT-like structure will enable GIC to raise funds for new investments, as well as earn fees from outside investors, following in the footsteps of sovereign funds such as Abu Dhabi and China Investment Corp.

"It will deepen the REIT segment in Singapore as well," he added.

Singapore, Asia's third largest REIT market, is home to several large industrial REITs including Mapletree Logistics, Cache and Ascendas.

JPMorgan and Citigroup are among the banks leading the talks for the mandate, one of the sources said. JPMorgan and Citi declined to comment.

GIC RE, whose president Seek Ngee Huat was a former partner at Jones Lang LaSalle, manages a multi-billion dollar global portfolio of property assets, with over 200 investments in more than 30 countries. Real Estate is classified under alternatives and accounted for 12 percent of its assets as of March 2009.

The real estate assets span multiple property sectors, including office, retail, residential, industrial and hospitality, according to its web site. -Reuters