Daishin Securities to invest $110 mn to buy two Manhattan buildings

Daishin Securities Co. Ltd., a small-sized South Korean brokerage firm, is set to buy two buildings in Manhattan with an equity investment of 122.7 billion won ($110 million), one of which will be jointly owned by a US property investment company and a South Korean investor.

The two properties located at 378 West End Avenue (378 WEA) and 400 Madison Avenue (400 MA) respectively are valued at a combined $300 million, including debt, according to a Daishin source.

The acquisitions, to be completed within this month, are aimed to secure steady rental incomes from dollar assets and provide attractive alternative investment products to retail customers, Daishin said in a regulatory filing on Sept. 5.

Its board of directors approved the principal investments. But it has yet to decide whether to resell the equity interests to domestic institutional investors.

For the building at 378 WEA, Daishin will pour 56.9 billion won ($50.8 million) to own 80%.

The other unidentified co-investors – a US property investment firm and a South Korean investor – will have the remaining 20%.

Located in an upper-class residential area and transportation hub, it was owned by a collegiate school.

Daishin plans to renovate the building into a luxury condominium for public sale in a value-add investment.

It will raise capital from South Korean investors in a separate account to fund the renovation, but no further details were disclosed.

As for the office building at 400 MA, Daishin will acquire the whole equity interest for $59.3 million. The 22-story building in Midtown was owned by a US real estate investment company.

The cash investments come on the heels of its 30-billion-won equity investment in an attached building of Times Square in Manhattan in August, 2017.

Daishin Securities formed a global real estate investment team within its research center in January and opened a New York subsidiary in June to ramp up global real estate investments.

By Donghyun Kim and Daehun Kim

3code@hankyung.com