Korea Investment Management Co. will acquire a 99-year ownership of an office building in Brussels for 146 million euros ($165 million) in its second such investment in the capital of Belgium.
AXA Belgium is selling the long-term ownership of Le Toison d’Or which is mainly leased to Regie Des Batiments (RDB), a Belgian government agency for real estate management, until the end of 2030, Korea Investment said in a regulatory filing last week.
RDB accounts for 99.8% of rents of the 31,000-square-meter building.
To fund the transaction, Korea Investment plans to raise 68 million euros ($76 million) from domestic institutional and individual investors between June 10-14, and borrow 87.6 million euros in a five-year loan.
The deal, sourced by its affiliate Korea Investment & Securities Co. Ltd., costs 156 million euros, including fees and other expenses, according to the company filing. It is expected to close on June 26.
For a long-term ownership acquisition, the buyer pays a purchase tax of just 2%, compared with 12.5% for a property acquisition, according to edaily, a South Korean news provider.
Since 2017, Korea Investment has raised a total of 330 billion won through domestic funds to finance overseas real estate investments ranging from Belgium to Milan and Tokyo.
They were fully subscribed within a few days, luring individual investors with higher target returns than other investment funds.
For the new Belgium property investment fund, it charges 1.16% as fees, including management fees it will pay to a foreign property manager of the Brussels building.
It is 13 basis points more than that for last year’s public fund launched for two Brussels buildings, according to a MoneyToday report.
Separately, Korea Investment is seeking to raise 62 billion won from domestic individual and institutional to acquire a Tokyo office building.
<Edited by Yeonhee Kim>
(Photo: Getty Images Bank)