Mirae Asset’s unit buys Morgan Stanley’s new Scotland head office building

  • 2018-01-16

Multi Asset Global Investments Co. Ltd., wholly owned by South Korea’s Mirae Asset Global Investments Co. Ltd., has acquired Morgan Stanley’s new headquarters building in Glasgow, Scotland, in a proprietary deal on behalf of South Korean institutional investors.

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The alternative investment firm had directly contacted Scottish property developer HFD Group at the development stage of the nine-story building and closed the acquisition early this month, without going through an auction process, according to investment banking sources on Jan. 14.

They declined to give any estimation of the acquisition price and expected investment returns.

Multi Asset Global launched an investment vehicle in September 2017 for the purchase, on expectations that a limited supply of new prime office space in Glasgow will underpin rental incomes and investment returns from the property built in December 2017, compared with other major cities in Europe.

Armed with a deeper pool of investor capital and extended global networks, South Korean asset managers and brokerage houses are trying to source deals outright from the sellers and enter direct negotiations as part of efforts to secure decent assets and save commission fees.

The 30 to 40 basis-point premiums that South Korean investors currently receive in one-year won-pound currency swap trade boost the expected returns from the UK asset. The South Korean won climbed to an over-three-year high against the US dollar in January, after the Bank of Korea lifted the benchmark interest rate by 25 basis points to 1.50% in November.

Morgan Stanley UK Ltd. will occupy the whole building as its new head office building and global transaction center under a 15-year lease agreement.

Its parent Morgan Stanley UK Group guaranteed 15-year rent payments for what is its second largest office in Europe after London.

The property has a rentable space of 14,400 square meters on the Waterloo Street, Glasgow’s commercial business district and is one of the city’s largest office buildings.

HFD built it on the formerly Holiday Inn hotel site, with borrowings from Royal Bank of Scotland and other institutions.

British asset manager Knight Frank Investment Management LLP (KFIM) will manage the property.

Glasgow is a preferred location for global transaction centers of financial services companies because it uses Greenwich mean time and has highly-educated populations.

Mirae Asset, one of the most aggressive South Korean alternative investment firms, has been snapping up office buildings, hotels and warehouses, expanding its presence into the US, Europe and Australia.

Multi Asset Global was formerly KDB Asset Management Co. Ltd. and Mirae Asset took it over from the state-run Korea Development Bank in 2016.

By Daehun Kim

daepun@hankyung.com

<Edited by Yeonhee Kim>