Korean REIT nets $31 mn from Tokyo property stake sale
Jan 11, 2019 (Gmt+09:00)
S.Korea's LS Materials set to boost earnings ahead of IPO process
![close](/images/ico/eyes/close.png)
![open](/images/ico/eyes/open.png)
Macquarie eyes its 1st Korean data center valued around $722 mn
![close](/images/ico/eyes/close.png)
![open](/images/ico/eyes/open.png)
Galaxy Ring, new foldables set to steal the show at Samsung Unpacked Paris
![close](/images/ico/eyes/close.png)
![open](/images/ico/eyes/open.png)
SK Inc. in talks to sell Pharmteco’s US CDMO plant to Novo Nordisk
![close](/images/ico/eyes/close.png)
![open](/images/ico/eyes/open.png)
POSCO gears up for carbon-free steelmaking with hydrogen
![close](/images/ico/eyes/close.png)
![open](/images/ico/eyes/open.png)
JR AMC Co. Ltd., a real estate investment trust manager in South Korea, has recently disposed of its stake in a luxury office building in central Tokyo, securing 3.4 billion yen ($31 million) in proceeds from its first overseas property investment.
The REIT manager had bought a 45% equity interest in Akasaka Star Gate Plaza, a 16-story building with a floor space of 17,493 square meters, for 14.18 billion yen in July 2014.
It was the first commercial property investment in a core business district abroad by a South Korean REIT, betting on an economic rebound in the world’s third-largest economy.
With the five-year REIT expiring in 2019, JR AMC sold the stake for 17.55 billion yen to a Japanese institutional investor, according to investment banking sources on Jan. 10.
The investment yielded an average 7.8% return and an IRR of 13.3%, including the sale proceeds.
The sources declined to provide further details about the majority owner of the building and whether the owner still holds its stake.
Orix Insurance and Tokyo Star Bank occupy most of the office space under long-term lease agreements.
For the investment, JR had raised around 73.6 billion won from South Korean institutional investors, including Korea Scientists and Engineers Mutual-aid Association and Korea Specialty Contractor Financial Cooperative. It borrowed the remainder from a Japanese bank at an interest rate of less than 1%.
At that time, it struggled to attract investors because South Korean institutions had focused on US and European real estates.
JR AMC continued to push into Japan’s commercial properties, acquiring a distribution center and an office building in the Tokyo metropolitan area in 2015 and 2017, respectively.
By Daehun Kim
daepun@hankyung.com
Yeonhee Kim edited this article
-
-
Pension fundsKorea’s military fund taps ex-president of Woori Financial as CIO
Jun 28, 2024 (Gmt+09:00)
-
-
Pension fundsKorea's NPS CIO talks with GPIF, GIC execs on asset allocation
Jun 24, 2024 (Gmt+09:00)
-
Foreign exchangeKorea FX authorities, NPS raise currency swap limit to $50 bn
Jun 21, 2024 (Gmt+09:00)