Keppel Capital fund scoops up Seoul office portfolio for $370m

Seoul, South Korea. Photo by Sunyu Kim on Unsplash

Singapore-based Keppel Capital’s Alpha Asia Macro Trends Fund III (AAMTF III) has entered into an agreement with an unnamed Korean asset management company to acquire a 100 per cent stake in three Grade A freehold commercial buildings located in major business districts in Seoul for an aggregate price of 430 billion won ($370 million).

Commenting on the latest deal, Alpha CEO Alvin Mah said in a statement, “The acquisition of the portfolio is in line with AAMTF III’s strategy of creating value and driving returns for our investors. Their addition to AAMTF III also aids in the diversification of the fund’s portfolio.”

AAMTF III is managed by Alpha Investment Partners Limited (Alpha), the private fund management arm of Keppel Capital.

In January this year, Alpha Investment Partners announced the final closing of the Alpha Asia Macro Trends Fund (AAMTF) III at $1.1 billion including co-investments.

AAMTF III is the third value-add pan-Asian fund in the Alpha Asia Macro Trends series. The series, launched in 2007, focuses on megatrends driving long-term growth in the Asia-Pacific, which include urbanisation, growing consumerism and intra-regional tourism.

AAMTF III targets to invest in multi-asset classes across key gateway cities in the Asia-Pacific region, including Singapore, Shanghai, Beijing, Tokyo, Sydney, Melbourne, Brisbane and Seoul. When fully leveraged and invested, it will have assets under management of about $2.4 billion.

Keppel Investment Management CEO Robert Sung said, “Driven by both foreign and domestic investors, real estate investments have been strong in Seoul. The office sector is expected to see limited supply over the next few years while leasing demand is projected to remain steady. We will continue to build on this traction and actively pursue quality opportunities to strengthen our product offerings in South Korea.”

The portfolio comprises Yeouido Finance Tower, located in the Yeouido business district (YBD); Nonhyun Building, located in the Gangnam business district (GBD); and Naeja Building, located in the Gwanghwamun central business district (CBD).

The acquisition of the three buildings is expected to be completed in the second quarter of 2019.

The acquisition comes on the heels of Singapore-listed Keppel REIT – a Keppel affiliate – entering an agreement with PGIM Real Estate to purchase a Seoul office building, T Tower, for 252.6 billion won ($220 million).