South Korea’s brokerage firm Mirae Asset Daewoo Co. Ltd. was selected as a preferred buyer of the office tower of Vodafone Group in Dusseldorf, Germany on Feb. 20 which the British telecom operator will continue to lease for the next 15 years.
The prospective acquisition, estimated to be worth 350 billion won ($303 million), is expected to deliver an annual return of around 5%, according to investment banking sources on March 5.
Mirae Asset Daewoo, an affiliate of Mirae Asset Global Investments Co. Ltd., will use its own capital of about 150 billion won for the deal, and raise the remainder through senior debts.
The brokerage house is considering reselling part of its equity stake in the building complex to a public real estate fund in the form of preferred stocks. It is now is conducting due diligence on the property.
Mirae Asset Daewoo is aiming to close the German deal around April, after selecting an asset management firm which will run the real estate fund at home.
The real estate deal will be the first cross-border acquisition sealed by Mirae Asset Daewoo, since it was launched as a combined entity of the former Mirae Asset Securities and Daewoo Securities late last month.
It also comes shortly after Mirae Asset Global Investments was picked as a preferred buyer of a 12-story office building in Canberra, Australia, in a deal worth A$320 million ($245 million), earlier this year. To finance the acquisition, Mirae also plans to launch a public real estate fund.
With South Korean retail investors joining pension and savings funds in investing in overseas real estate through public funds, asset management firms are keen to secure decent assets for resale to the public.
Last September a public closed-end property fund, launched by Mirae Asset Global to finance its purchase of State Farm Insurance’s office complex in Texas, was fully subscribed in just 10 days after it came to the market, raising the planned 300 billion won.
Vodafone Campus in Dusseldorf, built in 2012, covers a floor area of 86,000 square meters and consists of three buildings, including a parking building. It accommodates about 5,000 employees.
Once the initial lease term expires, Vodafone can extend the lease for another 10 years. Rents will increase in line with Germany’s consumer inflation.
By Dowon Lim
<Edited by Yeonhee Kim>