Qatari state fund buys stake in New York Empire State Building

Updated 24 August 2016
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Qatari state fund buys stake in New York Empire State Building

DUBAI: Qatar’s sovereign wealth fund has made an iconic purchase in America — a stake in the company that owns New York’s Empire State Building.
The $622-million purchase by the Qatar Investment Authority comes as the Doha fund increases its investments in the US as the country tries to cope with low global oil and gas prices.
The Empire State Realty Trust Inc., which manages the 102-story, 1,454-foot (443-meter) -tall building, announced the Qatari purchase late Tuesday, saying the fund would gain a 9.9-percent stake in the company. The trust owns a total of 14 office properties and six retail properties around the New York area.
The Qatar Investment Authority did not respond to a request for comment Wednesday.
The pointed top of the Art Deco-style Empire State Building, once the tallest structure in the world, still stands out in New York’s famed skyline. It remains a major tourist attraction and has been the centerpiece of major American films from “King Kong” to “Sleepless in Seattle.”
Qatar will host the 2022 FIFA World Cup and has been on a building boom, mirroring on a smaller scale the one that gripped Dubai.
However, its government coffers have been hard hit by the drop of global oil prices, which have fallen from over $100 a barrel in the summer of 2014 to around $50 now.
The nation’s investment authority, estimated to be worth some $335 billion by the Las Vegas-based Sovereign Wealth Fund Institute, has been increasingly eyeing opportunities in the US Last September, it announced plans to open an office in New York and committed to investing $35 billion in the US over the next five years.
The fund’s existing American holdings include a more than 10-percent stake in New York-based luxury jeweler Tiffany & Co. It sold its share of the American film studio Miramax to Qatar-based media group beIN in March for an undisclosed sum.
Qatar Airways, meanwhile, has been rapidly expanding its operations in the US, provoking a backlash from American carriers.
Also among the Qatari fund’s interests in America is a 44-percent stake in the $8.6 billion redevelopment project in New York known as Manhattan West, which includes remodeling the building that’s now home to the global headquarters of The Associated Press.
The AP announced in August 2015 it planned to move from that building to another near the World Trade Center.


Malaysia reviews China infrastructure plans

Malaysia’s former PM Najib Razak (AFP)
Updated 18 June 2018
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Malaysia reviews China infrastructure plans

  • Malaysia's scandal-mired former PM Najib Razak signed a string of deals for Beijing-funded projects, including a major rail link and a deep-sea port.
  • New Prime Minister Mahathir Mohamad has announced a planned high-speed rail link between Kuala Lumpur and neighboring Singapore will not go ahead as he seeks to reduce the country’s huge national debt.

KUALA LUMPUR: Malaysia has been a loyal partner in China’s globe-spanning infrastructure drive, but its new government is to review Beijing-backed projects, threatening key links in the much-vaunted initiative.

Kuala Lumpur’s previous regime, led by scandal-mired Najib Razak, had warm ties with China, and signed a string of deals for Beijing-funded projects, including a major rail link and a deep-sea port.

But the long-ruling coalition was unexpectedly voted out last month by an electorate alienated by allegations of corruption and rising living costs.

Critics have said that many agreements lacked transparency, fueling suspicions they were struck in exchange for help to pay off debts from the financial scandal which ultimately helped bring down Najib’s regime.

The new government, led by political heavyweight Mahathir Mohammed, has pledged to review Chinese deals seen as dubious, calling into question Malaysia’s status as one of Beijing’s most cooperative partners in its infrastructure push.

China launched its initiative to revive ancient Silk Road trading routes with a global network of ports, roads and railways — dubbed “One Belt, One Road” —  in 2013.

Malaysia and Beijing ally Cambodia were seen as bright spots in Southeast Asia, with projects in other countries often facing problems, from land acquisition to drawn-out negotiations with governments.

“Malaysia under Najib moved quickly to approve and implement projects,” Murray Hiebert, a senior associate from think-tank the Center for Strategic and International Studies, told AFP.

Chinese foreign direct investment into Malaysia stood at just 0.8 percent of total net FDI inflows in 2008, but that figure had risen to 14.4 percent by 2016, according to a study from Singapore’s ISEAS-Yusof Ishak Institute.

However, Hiebert said it was “widely assumed” that Malaysia was striking quick deals with China in the hope of getting help to cover debts from sovereign wealth fund 1MDB.

Najib and his associates were accused of stealing huge sums of public money from the investment vehicle in a massive fraud. Public disgust at the allegations — denied by Najib and 1MDB — helped topple his government.

Malaysia’s first change of government in six decades has left Najib facing a potential jail term.

New Prime Minister Mahathir Mohamad has announced a planned high-speed rail link between Kuala Lumpur and neighboring Singapore will not go ahead as he seeks to reduce the country’s huge national debt.

The project was in its early stages and had not yet received any Chinese funding as part of “One Belt, One Road.” But Chinese companies were favorites to build part of the line, which would have constituted a link in a high-speed route from China’s Yunnan province to trading hub Singapore, along which Chinese goods could have been transported for export.

Work has already started in Malaysia on another line seen as part of that route, with Chinese funding — the $14-billion East Coast Rail Link, running from close to the Thai border to a port near Kuala Lumpur.

Mahathir has said that agreement is now being renegotiated.

Other Chinese-funded initiatives include a deep-sea port in Malacca, near important shipping routes, and an enormous industrial park.

It is not clear yet which projects will be amended but experts believe axing some will be positive.

Alex Holmes, Asia economist for Capital Economics, backed canceling some initiatives, citing “Malaysia’s weak fiscal position and that some of the projects are of dubious economic value.”

The Chinese foreign ministry did not respond to request for comment.

Decoder

What is the "ne Belt, One Road" initiative?

The “One Belt, One Road” initiative, started in 2013, has come to define the economic agenda of President Xi Jinping. It aims to revive ancient Silk Road trading routes with a network of ports, roads and railways.