Singapore:
A hungry lion on the prowl
Rising Singapore Inc apetite; it now has access to some of the most important sectors of Aussie economy. Florence Chong, The Australian.
Oct 30, 2003

MAYNE Group has been good to Singapore. It first cultivated telecoms upstart Optus before its eventual takeover by Singapore Telecommunications.

And this week, it agreed to sell its portfolio of hospitals to a consortium including an arm of the Singapore Government.

The state-owned GIC Special Investments is part of an international consortium, led by the Hong Kong-based CVC Asia Pacific Ltd, which paid A$813 million for Mayne's 53 private hospitals.

With that deal, Singapore, particularly corporations linked to the government of the island nation, can now claim interests across the most important sectors of the Australia economy -- from telecoms to health, utilities, aviation, tourism and, especially, property.

In tourism, for instance, Singaporean companies already own 16 per cent of the 67,000 hotel rooms in Australia.

And CapitaLand, one of Singapore's largest developers, has a 58.5 per cent interest in ustraland, the fourth largest listed property company in Australia by sales.

Well before the Mayne hospitals deal, Singapore was ranked as the third biggest foreign investor in Australia, after Britain and the US, according to figures for the 2001-02 financial year (the latest available).

In that year, the Foreign Investment Review Board approved 282 projects proposed by Singapore companies with a collective value of A$18.2 billion, just A$400 million behind the US interests.

The stock of total Singapore investment in Australia was worth almost $40 billion by June 2002.

Since the late 1990s, Singapore Inc has moved to the wider services sector.

The single largest deal was the 2001 acquisition of Optus for A$17 billion.

Although SingTel, Singapore Power and Temasek are active in Australia, the highest profile is that of the autonomous real estate arm of GIC - GIC Real Estate, a global property investor.

It has an expanding portfolio in Australia, including its recent purchases of three five-star hotels in Sydney and Melbourne for A$490 million.

Currently, GIC Special Investments, which invests in high-technology and services companies, has joined with Malaysia's Genting Bhd, a contender for the A$3.5 billion Loy Yang power station in Victoria.

Singapore Power paid A$2.1 billion for GPU Powernet, operator of the transmission grid in Victoria in 2001.

Sources in Singapore said these investments underpinned the broad national strategy to "extricate itself from its neighbourhood".

They said Australia offered stability, and the calibre of well-run companies made them good, viable assets in a "market of decent size".

By contrast, they would be hard pressed to find similar quality companies in Asia where corporate governance remained a major concern.

"It is a global strategy," said a corporate lawyer closely involved with the GICs and their offshore deals.

"They look at areas where hopefully Singapore companies can make a mark for themselves.

Eventually, the strategy is to leverage out of Australia into the UK and other English-speaking countries."

Singapore has increased its focus on Australia after its mixed experience investing in developing Asian countries, particularly Burma, Vietnam, Indonesia and China.

Investors and advisers alike said the fundamental reason for choosing Australia was the level of comfort they received from Australia's legal system, corporate culture and larger pool of managerial talents.

The Singapore-Australia Free Trade Agreement, implemented in July, will provide a further platform for Singapore interests to grow in Australia.
The Australian