Keppel likely to buy three Seoul buildings in $400 mn package deal

  • 2019-02-28

The South Korean unit of Singapore-based asset manager Keppel Capital was picked as the preferred buyer for three Seoul office buildings in a package deal worth an estimated 450 billion won ($400 million), in what appears to be value-add investment.

Among seven to eight bidders for the three small and medium-sized offices, only Keppel and Seoul-based IGIS Asset Management Co. Ltd. expressed intentions to buy them in a lump, according to sources with knowledge of the matter on Feb. 25.

Samsung SRA Asset Management Co. Ltd. put the commercial properties up for sale last year to exit the investment in 10 years.

It acquired them one after another in 2009 on behalf of its single shareholder Samsung Life Insurance Co. Ltd. reportedly for 295.5 billion won in aggregate.

If the sale goes through, Samsung is expected to secure 155 billion won in proceeds, or 50% return on the property investment.

“They need value-add investments by filling them with more tenants, or refurbishing them,” said one of the sources.

Details of the three offices up for sale:

table

Keppel Capital, with assets of $22 billion under management, is also expected to participate in the acquisition as an equity investor, according to the sources.

For Keppel, the expected deal will be its first property investment in South Korea since its South Korean arm was launched in April 2018.

Last year, it pulled out of a joint deal worth 985 billion won to acquire Seoul Square with NH Investment & Securities Co. Ltd. because of controversy over a conflict of interest.

The seller of the 132,806-square-meter building is Alpha Investment Partners Ltd., a wholly-owned unit of Keppel Group.

Instead, NH Investment is teaming up with another Singapore-based ARA Asset Management Ltd. to close the acquisition this year.

By Daehun Kim

daepun@hankyung.com

<Edited by Yeonhee Kim>

(Photo: Getty Images Bank)