UK-based private equity firm Actis has divested a twin-tower office building in southwest Seoul, South Korea, to a consortium of local institutional investors for $447.4 million.
The sale of Young City, a complex of two 13-storey towers, marks the third exit for the Actis Asia Real Estate fund after its 2018 acquisition of Standard Chartered’s Principal Finance Real Estate business in Asia, the PE firm said in a statement.
The tender process lured nearly 50 interested parties and 17 bids, it added.
Actis said it partnered with SK D&D, the real estate development arm of Korean conglomerate SK Group, for the disposal.
According to a report in Korea Herald, D&D Investment, an affiliate of SK D&D, will establish a real estate investment trust called Young City REITs by securitising the properties. The report added that Actis earned a 280 billion won ($227.2 million) return before taxes from the sale, citing a Cushman & Wakefield Korea statement.
Young City was completed in 2017 and has more than 99,000 square metre floor area, which is larger than comparable new projects in Seoul.
The development is located in close proximity to major business districts in the city and has secured Citibank, SK Telecom and Samsung affiliates as anchor tenants. The office building is currently 98 per cent occupied.
“Asian real estate is a compelling investment opportunity with scale and supported by secular tailwinds: demographic shifts, digital disruption, deficient supply and demand for yield,” the UK-based asset manager said.
“Actis’ build to core strategy continues to capitalise on the mismatch between the demand and the quality and affordability of existing supply,” added Brian Chinappi, head of Actis’s Asian Real Estate business.
Actis’s Asia real estate business invests across Greater China, India, South Korea and Southeast Asia. Last year, the firm launched its second property fund for the region that will explore all segments including residential, commercial and logistics. Its first Asia real estate fund was a $750-million vehicle closed in July 2018.
In August 2019, Actis closed its debut $1.23 billion infrastructure fund to invest in emerging markets of Asia, Africa and Latin America.
In total, the firm has raised over $15 billion since inception and deployed capital across the real estate, private equity, energy and infrastructure asset classes.