OUR STRATEGY IS TO INCREASE BOTH INVESTMENT AND DEVELOPMENT IN THE RECOVERING PARTS OF THE REGION.
2000 was a year of recovery across much of the Asian region - Hong Kong, China and Singapore in particular. In Japan, amid gloomy short-term economic prospects, the record US$30bn of foreign direct investment is evidence of the opening up of the economy and continuing process of change.
We entered the Japanese market with Ayala International and our Japanese partner Uni-Asia Finance Corporation, to acquire residential property in Tokyo where, in some cases, prices are 80-90% below the peak. The venture acquired six properties and will expand the portfolio in 2001 with a view to inviting further co-investors.
In Hong Kong, Grosvenor Land, our luxury residential fund established with Hongkong Land, invested in a portfolio of five properties in Hong Kong and a 50% interest in a new apartment block in Tokyo, with a total value of US$65m. To expand the fund's portfolio, at the end of the year, we agreed terms with two new investors for an additional US$50m of capital.
We consolidated our relationship with Asia Standard International, by co-investing, together with Ayala International, in a rare prime 50,000 sq ft residential development at 117 Repulse Bay Road on the south side of Hong Kong Island.
Asia Standard, in which we acquired a 15% shareholding in 1999, has made good progress coming out of the downturn, replenishing the landbank, selling development stock and spinning off the hotel business into a separate listing, Asia Standard hotels. During the year, however, the share price tracked its peer group downwards as investor sentiment was weak and distracted by the new technology phenomenon.
In December, we returned to the grade A strata office market for the first time since 1996. We agreed terms to acquire the 15th and 33rd floors in the Lippo Centre, a prime central business district office development, for US$10.4m and US$12.6m respectively. The 15th floor was acquired in a 50/50 joint venture with the Shaw family, our first partner in Hong Kong.
The end of year set a milestone in our business relationship with Ayala International, when we agreed to establish a joint company to manage our activities in the region, giving us representation in Singapore, Hong Kong and Tokyo.
The Australian economy had another strong year with GDP growth at 4.2%. In Sydney, we commenced construction of our third building at Sir Joseph Banks Corporate Park (SJBCP), a joint venture between Grosvenor Australia and the Buccleuch Estate. On completion in September, we agreed a long term lease of the 8,600 m2 high tech office and warehouse building to Nortel Networks Photonics, for their fibre-optic connection production facility and associated offices.
In February, we completed the Tucker Seabrook Building, a 5,600 m2 high tech office warehouse building on land previously part of SJBCP. Tucker Seabrook, a fine wine and liquor merchant and distributor with a 200 year history in Australia, occupies 75% of the 5,600 m2 building and is also our co-investor in the project.
A major realignment of our Australian portfolio began with the sale of Top Ryde Shopping Centre. Top Ryde was held for 12 years, during which time a number of refurbishments and extensions took place. Part of the funds released from the sale were redeployed to purchase 201 Charlotte Street, a 13,500 m2 office building in the financial district of the Brisbane Central Business District. The building presents us with a 'value add' opportunity as it is predominantly vacant and requires major refurbishment.
The Lippo Centre, Hong Kong where we agreed terms to acquire the 15th and 33rd floors.
117 Repulse Bay Road, a prime 50,000 sq ft residential development on Hong Kong Island.
A new 8,600 m2 building at Sir Joseph Banks Corporate Park, Sydney leased to Nortel Networks Photonics.
201 Charlotte Street, Brisbane, a 13,500 m2 office building requiring major refurbishment.
The Sir Joseph Banks Corporate Park, where a further 15,500 m2 site is available for development.