THE Singapore government has quietly built a large stake in British Land in a sign that investors could be returning to the battered UK commercial property market.

GIC, Singapore's investment arm, yesterday, Jan 9, declared a stake of just more than 3 per cent in the real estate investment trust, adding to its already significant holdings in commercial property.

GIC is now the fourth largest shareholder in British Land, with a stake worth £134m.

The sovereign wealth fund is traditionally a passive investor, but analysts say the stake building is significant because it could indicate a bottom has been reached for shares in the sector.

Listed property shares have almost halved in the past year during a savage sell-off. British Land was yesterday trading at a 48 per cent discount to its last quoted net asset value. Shares in British Land ended the day up 1p at 874½p.

"The share price is almost half what it was and GIC can clearly see an opportunity to build up a stake in a potentially undervalued company," said one analyst who asked not to be named.

"It has been quietly buying into the company over a long period and we can see them continue to do so as long as the price looks good."

Last month, JPMorgan said there was an opportunity to build a position in British Land, pointing out that the company was well positioned for a downturn owing to its secure debt resources.

The government of Singapore has been a longterm investor in UK commercial property and already holds stakes in a number of other Reits, including Great Portland Estates and Brixton.

It also holds stakes in direct property such as the Gateshead MetroCentre. No one at GIC was available for comment, and British Land would not comment. Coincidentally, Paul Myners, chairman of rival Land Securities, is an adviser to GIC. * The UK Commercial Property Trust, one of the largest listed property investment companies, yesterday said that its net asset value had dropped by 7.7 per cent in the fourth quarter.

The Resolution-managed fund said that property in London's West End saw the worst falls, down about 13 per cent in the quarter in spite of the sector being regarded by analysts as one of the most resilient in the UK.

                                                      Home