Hana Alternative to buy $366 mn London building from Blackstone

  • 2018-11-24

Hana Alternative Asset Management Co. Ltd. is set to acquire a Blackstone-owned office building in London for 285 million pounds ($366 million) to become the first South Korean institution investing in a UK government-leased property.

Hana will sign a share purchase agreement on Nov. 30 with Blackstone Group to buy Sanctuary Buildings in Westminster leased to the Department for Education for another 15 years.

The deal was first reported by Yonhap Infomax last week and confirmed by a Hana Alternative source on Nov. 23.

Blackstone is expected to rack up 110 million pounds ($141 million) in proceeds from the sale, four years after it acquired the eight-story building for 175 million pounds in 2014.

Hana Alternative, an investment arm of South Korea’s Hana Financial Group, will raise 110 million pounds from two domestic brokerage firms, including affiliate Hana Financial Investment Co. Ltd., to fund the acquisition.

It will borrow the remainder of the cost from life insurance companies and others in the UK, according to Yonhap Infomax.

The Department for Education has used the Sanctuary Buildings, built in 1991, for 27 years and recently extended the lease for another 15 years.

As Blackstone has been offloading London real estate since late last year, it sold 20 Old Bailey in London to Mirae Asset Financial Group for 340 million pounds in May, and Cannon Bridge House to a consortium of Mirae Asset Daewoo Co. Ltd. and NH Investment & Securities Co. Ltd. for 242 million pounds in March.

The three properties, including Sanctuary Buildings, sold to South Korean institutions were bought between 2013 and 2015.

A weak pound against other major currencies and expectations of a soft Brexit are attracting South Korean investors into properties in London.

“In Europe, asset prices in Germany, in particular, has risen too much to generate returns,” an asset management industry source told the Yonhap Infomax. “But in the UK, there are still some assets coming to the market that can meet expected returns of investors.”

By Daehun Kim


<Edited by Yeonhee Kim>

Photo: Getty Images Bank