Page last updated at 05:02 GMT, Thursday, 10 July 2008 06:02 UK

Abu Dhabi buys into NY landmark

Chrysler Building
The iconic Chrysler Building dominates the New York skyline

The majority stake in one of New York's most famous landmarks, the Chrysler Building, has been sold to a business arm of Abu Dhabi's government.

Prudential Financial confirmed it had sold its 75% stake in the Manhattan art deco skyscraper to the Abu Dhabi Investment Council (ADIC).

The council, which has not commented on the deal, was reported to have paid about $800m (400m) for the stake.

The remaining 25% of the building is owned by property firm Tishman Speyer.

Tishman Speyer will continue to manage the building.

Prudential spokeswoman Theresa Miller confirmed that ADIC had bought its share of the skyscraper, according to the Associated Press.

Sovereign investments

In recent months, a number of iconic buildings on Manhattan's skyline have been the target of Middle Eastern investors.

The investment has often come from sovereign wealth funds, which are established by governments who have large surpluses of money - typically earned from oil and gas revenues - which they wish to invest abroad.

In June, a Dubai fund, Boston Properties and Goldman Sachs paid $2.8bn for the General Motors Building.

Last November, another investment arm of the Abu Dhabi government, the Abu Dhabi Investment Authority (ADIA), made a $7.5bn investment in US banking giant Citigroup.

The ADIA is one of the world's richest sovereign funds, with an estimated $800bn of assets under management.

But governments in France, Germany, and the US have raised concerns that these funds could use their wealth to buy up key strategic assets or exert political leverage on Western companies and governments.

The International Monetary Fund's working group on sovereign wealth funds met in Singapore on Wednesday to try and address those concerns and to draw up a voluntary code of conduct for the industry.

Analysts say energy-rich governments in Abu Dhabi, Kuwait and other Gulf countries are taking advantage of falling prices to invest in property and financial firms around the world.

Middle Eastern investors have spent $1.8bn this year on commercial US property, according to research firm Real Capital Analytics.

The Chrysler Building at 405 Lexington Avenue was designed by William Van Alen and completed in 1930 for car maker Chrysler.

At 319m (1,046ft) high, the building was the world's tallest skyscraper before it was surpassed by the Empire State Building a year later.

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27 Nov 07 |  Business

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