x Abu Dhabi, UAEWednesday 17 January 2018

Abu Dhabi wealth fund in ‘advanced talks’ to buy stake in iconic New York building

Both the Abu Dhabi Investment Authority and Singapore sovereign wealth fund are expected to invest around $300 million in the deal.

The Time Warner Center transaction is one of Adia’s high profile property investments. Mark Lennihan / AP Photo
The Time Warner Center transaction is one of Adia’s high profile property investments. Mark Lennihan / AP Photo

Abu Dhabi Investment Authority (Adia) is in advanced negotiations to invest in New York’s renowned Time Warner Center alongside the Singapore sovereign wealth fund GIC.

Adia, also a sovereign wealth fund, is in final negotiations, according to a source familiar with the deal.

The complex transaction will see the media giant Time Warner, the part owner and main tenant, eventually move staff out of the 2.8 million square feet office, retail and apartment complex at Columbus Circle.

Time Warner, which currently owns around 1 million sq ft of office space in the centre is understood to be on the verge of selling its part of the mixed-use building for about US$1.3 billion to the building’s developer, the United States real estate company Related. The company would then bring in partners including Adia and GIC, the source said, to take on ownership of the building, one of the largest developments ever undertaken in New York City.

Both Adia and GIC are expected to invest around $300 million in the deal, with Related also adding additional equity as well as debt to buy the trophy building, which has been home to celebrities such as Jay-Z and Ricky Martin.

“The deal is being finalised but is expected to complete soon,” the source said.

Time Warner is looking to ultimately move its operations from the Time Warner Center and various other offices around New York City to Related’s 12 million sq ft Hudson Yards redevelopment project on New York’s far west side. However, the company is expected to continue leasing its existing office space in the Time Warner Center for at least five years.

The deal is set to be the latest in a series of high profile overseas property investments which Adia has been buying or attempting to buy in recent months as the fund attempts to diversify its risk.

In October it emerged that the Abu Dhabi company was in advanced negotiations to buy a €750m (Dh3.75bn) French property portfolio from the Swiss bank UBS through its subsidiary Tamweelview European Holdings. The deal included the 24,000 sq metre 19th century 6-8 Boulevard Haussmann office block in the 9th arrondissement of Paris currently let to the French bank BPI.

The previous month, Adia bought the Australian hotel group Tourism Asset Holdings, giving it control of 31 properties across the country.

And earlier last year Adia was reported to be in negotiations to buy 42 Marriott-branded hotels across the United Kingdom from the Royal Bank of Scotland in a $990m deal.

News of the Adia and GIC deal in New York came as the real estate agent Savills published research showing that around 35 per cent (or 6,200) of deals conducted in 2012 on property worth more than $10m, were only possible because of funding from sovereign wealth funds and other private investors.

“Since the North Atlantic debt crisis of 2008, sovereign wealth funds, wealth management companies, private banks and family offices have stepped into the property deals that corporate bankers have deserted,” said Yolande Barnes, the head of Savills world research.

“Of the $70 trillion of global real estate that does not form people’s homes and is therefore ‘investable’ and therefore traded regularly, over half is being bought by private individuals, companies and organisations,” she added.