The Singapore Government wants to invest part of its foreign reserves into Ghana’s real-estate sector using its Sovereign Wealth Fund.
The decision by Singapore’s government to consider Ghana for real-estate investment is a significant boost to the country’s real-estate industry, as demand for housing far outstrips supply while concerns rise about the widening housing deficit in the country -- estimated at close to two million.
Ian Lee, the Centre Director of International Enterprise (IE) Singapore -- the investment promotion and facilitation agency of the Government of Singapore -- said officials of the real-estate arm of the Fund have already been to Ghana to assess the sector for potential investment.
He said the immediacy of the investment now depends on finding an investment partner in Ghana.
“The people who came to Ghana are from the real-estate department. Our Sovereign Wealth Fund invests in different sectors including financial assets, real-estate, manufacturing, oil & gas among others. So for the real-estate people, their mandate was to look at Africa; so they are coming here.
“It might take some months before they come (invest). It all depends on how and who they can find and partner with. Usually, they leverage on financial institutions like the banks and real-estate developers because they don’t know the market well,†he told the B&FT.
Currently, the Sovereign Wealth Funds of Singapore is one of the largest foreign reserves managed by the GIC Private Limited (formerly Government of Singapore Investment Corporation) and Temasek Holdings.
In November last year, Temasek -- one of Singapore’s two sovereign wealth funds -- made a US$1.3billion investment in a liquified natural gas block in Tanzania, signalling a new trend in the way that investments, particularly by state entities, are going to look in years ahead.
Over the years, Temasek’s investments, for instance, were mainly in Singapore itself, which expanded to other Asian countries and emerging markets with focus now shifting to Africa.
Last year, the Singapore government set up an office in the country for its investment promotion and facilitation agency, IE Singapore, in a bid to promote and facilitate investment flow from Singapore into Ghana and other West African states.
Mr. Lee, who heads one of the two IE Singapore offices in Africa, explained that the shift in investment directions by the real-estate arm of Singapore sovereign wealth fund from the Asian island-state to emerging markets is to continue to preserve and enhance the country’s foreign reserve -- following the implementation of a number of property market cooling measures intended to cut demand for real-estate properties in Singapore through mortgage borrowing restrictions.
He said Singapore, along with several other Asian countries, has been concerned about how the effect of low global interest rates and high levels of liquidity have impacted its property market, which has seen prices rise over 60 percent since 2009. Thus, authorities enacted measures to prevent the formation of a bubble.
“The Singapore government has put a lot of cooling measures in place, so they are looking outside Singapore and other countries,†he added.
According to Mr. Lee, the upcoming Africa Singapore Business Forum (ASBF) scheduled for August 27-28 in Singapore illustrates the much-talked about idea of South-South trade, which is seen as the engine of global growth.
He said IE Singapore will take the initiative to organise strategic Business-to-business meetings for Ghanaian businesses that will participate in the upcoming Africa-Singapore Business forum, as a number of Singapore investors are looking for the right partners in Ghana.
By Evans Boah-Mensah | B&FT Online | Ghana
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