Singapore’s US$744 billion sovereign wealth fund GIC is considering investments in Chinese property assets

GIC recently struck deals in commercial areas like logistics, and is confident that the Chinese government can contain the fallout from the property crackdown

GIC’s equity holdings included China Vanke, the nation’s second-biggest developer, according to Bloomberg data as of September

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Commercial buildings in the central business district are reflected on a pond in Singapore, on June 3, 2018. Photo: Bloomberg

Published: 1:46pm, 17 Dec 2021

Singapore’s US$744 billion sovereign wealth fund sees potential opportunities to do deals and buy debt in China’s battered real estate sector, confident Beijing won’t let things “spiral out of control” following several defaults.

“We continue to have confidence that it is a good investment market for us,” said Lim Chow-Kiat, chief executive officer of GIC. “We are not moving away from being involved in the Chinese real estate market.”

China’s property sector has been roiled by defaults at China Evergrande Group and other developers, sparking concerns about contagion that could hamper growth in the world’s second-largest economy. The sell-off has pushed Chinese junk bond yields above 20 per cent in recent weeks, prompting analysts to start seeing value in the sector. Some firms are raising funds to buy up assets at what they believe to be bargain prices.

GIC, which has been investing in Chinese property for two decades, is also seeing potential in the hard-hit sector. The fund has recently struck deals in commercial areas like logistics, and is confident that the Chinese government can contain the fallout from the property crackdown.

“We believe they have enough central bank balance sheet, and within their system they have enough levers to make sure that things do not spiral out of control,” Lim said in an interview from his Singapore office.

Singapore’s US$744 billion sovereign wealth fund GIC is considering investments in Chinese property assets

GIC recently struck deals in commercial areas like logistics, and is confident that the Chinese government can contain the fallout from the property crackdown GIC’s equity holdings included China Vanke, the nation’s second-biggest developer, according to Bloomberg data as of September

GIC recently struck deals in commercial areas like logistics, and is confident that the Chinese government can contain the fallout from the property crackdown

GIC’s equity holdings included China Vanke, the nation’s second-biggest developer, according to Bloomberg data as of September