In a deal likely to be completed late this month, GIC will pay around 77 billion yen (S$1.02 billion) for The Westin Tokyo - for the building and the land it stands on, the newspaper said. The hotel, located in the central Ebisu district, is expected to carry on its operations while GIC tries to boost its value as a long-term investment, the paper added.

A GIC spokesman contacted by Reuters could not immediately comment on the report.

The purchase indicated that Japan's real estate market is still relatively attractive, the Nikkei said. Last year, GIC acquired Hawks Town, a commercial complex in Fukuoka prefecture in western Japan.

Singapore government funds have also been acquiring stakes in Western financial institutions, taking advantage of the fallout from the sub-prime mortgage crisis in the United States.

Last month, GIC, which manages well over US$100 billion (S$142 billion), bought US$6.88 billion worth of Citigroup convertible stock and raised its stake to around 4 per cent, just a month after it had injected nearly US$9.75 billion in UBS for a 9 per cent stake.

REUTERS, AGENCE FRANCE-PRESSE