The Singapore Government yesterday agreed to pay $717 million for a half-share in Westfield’s giant Parramatta shopping centre as it continues its staggering investment in trophy assets Downunder.
Whilst the Howard Government still battles a negative net worth of about $15 billion, the tiny island state of Singapore will soon own more Australia assets than our Federal Government. How’s this for a one nation state’s foreign direct investment rollout in another country:
1999: The Singapore Government’s CapitaLand takes control of property developer Australand; its 54% stake is now worth more than $1 billion.
2000: Singapore Power pays $2.1 billion to US firm GPU for Victoria’s monopoly electricity transmission company Powernet.
2001: Singtel takes control of Optus in a deal which valued Australia’s number two telco at $14 billion.
2004: Singapore Power pays $5.5 billion for the Australian assets of Texas Utilities, including large gas and electricity distribution assets in Victoria and the 1280mW Torrens Island power station in South Australia.
2007: Singapore Power offers $4.3 billion in cash to Alinta as part of the Babcock consortium in a deal which would make it the giant of Australian energy distribution, including the old AGL gas distribution assets in NSW.
I challenge anyone to name a bigger current program of foreign direct investment by one government in the commercial assets of another sovereign state. And these are just the big deals.
Other Singapore Government property holdings in Australia include Sydney’s ANA Hotel, Melbourne’s six-star Park Hyatt, the Queen Victoria Building in Sydney, and now Westfield Parramatta.
As for Westfield, it is enjoying tapping cashed-up governments for funds. In December, the Queensland Investment Corporation shelled out $1.3 billion for a half-share in the 150,000 square metre Merry Hill shopping centre near Birmingham in England. Westfield founder Frank Lowy is a smart man and when he sells on skinny yields of about 5%, you know we must at the top of the market.
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