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GIC Said to Start Talks With Investors for $3 Billion Unit IPO
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By Joyce Koh

Sept. 9 (Bloomberg) -- The Government of Singapore Investment
Corp.started talks with potential corporate investors for the $3
billion initial public offering of its logistics unit, two people with
knowledge of the matter said.

GIC has identified about 50 so-called cornerstone investors including
real estate and hedge funds, and some international wealthy
individuals, one of the people said, declining to be identified as
discussions are private. The warehouse unit, calledGlobal Logistic
Properties, started pre-marketing the sale to analysts in Singapore
and Hong Kong today and is expected to start trading in Singapore Oct.
15, the people said.

The IPO may raise as much as $3 billion, the people said, making it
the city-state’s biggest first-time sale since Singapore
Telecommunications Ltd.’s initial offering in 1993. GIC, manager of
more than $100 billion of Singapore’s foreign exchange reserves,
bought the assets from ProLogis, the world’s largest owner of
warehouses, for $1.3 billion in December 2008.

“Increasing the comfort level of investors with strong cornerstones is
key, particularly when the assets are all located outside of the
listing country,” saidJanice Ding, a Singapore-based analyst at CIMB
Research Pte.

Cornerstone investors are guaranteed shares in IPOs in exchange for a
pledge to hold the stock for a certain period of time. Companies use
the cachet of the investors, who may be institutions, companies or
billionaires, to drum up interest in their offerings among other
potential buyers.

Jennifer Lewis, a spokeswoman for GIC, didn’t immediately return calls
seeking comment.

Policy Risks

Global Logistic operates in 25 markets in Asia outside Singapore,
according to its website. In China, the company manages 51 logistics
parks in 18 cities, totaling 4.4 million square meters (47 million
square feet) at the end of June. It runs 69 logistics facilities in
seven cities in Japan.

“Investors are likely to be more demanding on pricing as the Japanese
logistics market is highly competitive and the Chinese industrial
market carries relatively high policy risks,” said Ding.

GIC plans to sell 95 percent of the shares to institutional investors,
with the remainder allocated to retail investors in Singapore, one of
the people said.JPMorgan Chase & Co. and Citigroup Inc. are lead
managers of the IPO, withUBS AG, China International Capital Corp. and
DBS Group Holdings Ltd. among other arrangers.

To contact the reporter on this story: Joyce Koh in Singapore atjkoh38@bloomberg.net

Last Updated: September 9, 2010 00:25 EDT