Lion City makes leap of faith with stake in Central

A BID by Singapore's cash-rich investment arm to plunge into Hong Kong's property market has raised eyebrows and questions about its ambitions in the territory.

Along with Singapore's City Developments Ltd (CDL), the Government of Singapore Investment Corp (GIC) made its first foray into the sometimes speculative world of Hong Kong property, teaming up with one of the consortiums bidding for rights to carry out the Mass Transit Railway Corp's HK$40 billion property development on the Central reclamation.

The GIC rarely provides answers for public consumption, but one obvious conclusion to be drawn from its decision to team up with the consortium, led by Sino Land Co and Great Eagle (Holdings), is that it is a vote of confidence in the territory's post-97 future.

It is also one more example of the island republic's strategy of making up with regional and global investments what its limited size means it cannot achieve domestically.

Unlike Hong Kong, which leaves offshore development to the private sector, it is Singapore's government bodies that are acting as some of the strongest backers of this strategy.

Not that the government bodies are likely to be pushing too hard on the risk-reward ratio. The GIC, as it is always known in Singapore, is not in the habit of making rash investments, although it is not infallible either. For example, there have been some UK property-based ventures that did not turn out too well.