A consortium of South Korea’s Meritz Securities Co. Ltd. and Capstone Asset Management Co. Ltd. will acquire a new office building of German online retailer Zalando in Berlin at 240 billion won ($215 million) for expected annual returns of 6 to 7%.
Meritz will invest about 100 billion won in equity stakes in the seven-story building under construction, for resale to other domestic institutional investors, according to a Meritz source on March 31.
The consortium will borrow the remaining 140 billion won from financial institutions.
Zalando will lease the new campus, once completed in 2018, under a long-term contract to house around 5,000 employees. Zalando is a fast-growing online store company with over 1,500 brands.
Meritz expects the building with an office space of 100,000 square meters to attract other domestic investors because of its good location in a trendy part of Berlin, easy access to public transportation and the credible tenant. It is within the Friedrichshain/Kreuzberg district.
Including the German deal, the value of Meritz’s overseas real estate investments exceeds 1 trillion won in total.
Since beginning cross-border real estate investments last year, the South Korean brokerage house has been selling them down to other institutional investors.
By Daehun Kim
<Edited by Yeonhee Kim>