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Friday, July 11, 2008

Abu Dhabi fund buys Chrysler Building

NEW YORK: The cash-rich Abu Dhabi Investment Council has bought one of New York's best-known skyscrapers, the Chrysler Building, for US$800 million, sources close to the deal said on Wednesday.

Despite a sharp downturn in the US housing market in recent years, bidding for landmark New York properties has remained skyhigh, showing investors still covet prestigious Manhattan properties.

The deal's price tag means the Middle East fund paid over US$10 million for each floor of the iconic 77-story Art Deco skyscraper which is situated in "Midtown" opposite Grand Central station.

Media reports had said the Abu Dhabi Investment Council, an investment fund based in the United Arab Emirates (UAE), had been holding negotiations with a subsidiary of Prudential Financial Inc over its 75 per cent stake in the Chrysler Building.

"We have sold our stake of 75 per cent on Tuesday," Prudential spokeswoman Theresa Miller said.

The remaining 25 per cent stake in the skyscraper is owned by Tishman Speyer Properties, a privately- held New York real estate firm.

"It's certainly a very healthy sign for the commercial real estate market in the US," said Dan Fasulo, a property analyst at Real Capital Analytics.

"Many of the oil-rich nations in the Middle East who (are) just flushed with capital from their oil profit are targeting or looking at our trophy real estate assets," Fasulo said.

The Abu Dhabi Investment Council is intensely secretive about its operations, but investment analysts say it controls over US$800 billion (US$1=RM3.24) of assets and is one of the world's biggest so-called sovereign wealth funds.

The fund made a US$7.5 billioninvestment in Citigroup, one of America's largest financial institutions, last November.

The Chrysler Building was designed by the architect William Van Alen and erected between 1928 and 1930.


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