KKR-Led Consortium Buys South Korea Real Estate for $1.9 Billion

(Bloomberg) -- A group led by KKR & Co. bought property in South Korea’s Gangnam business district for 2.1 trillion won ($1.9 billion), the private equity firm’s third investment in the country’s hot real estate market.

The consortium, which includes National Pension Service of Korea and IGIS Asset Management, South Korea’s largest real estate fund manager, bought the property from engineering firm Daor E&C, KKR and IGIS said in a statement Wednesday. The cost includes the purchase price and funds needed to complete the development but specific terms weren’t disclosed. KKR’s portion is being funded from its Asian Fund III.

Near record-low interest rates and massive development plans by Seoul Mayor Park Won-soon, who is considered a potential presidential candidate, have fueled speculation in the city’s real estate market. When completed, KKR’s property will include offices, shops and a 263-room five-star hotel. The purchase follows KKR’s sale in January of the K-Twin Towers it had bought in 2014, for which it received $660.5 million, according to Bloomberg data.

KKR will continue to make “quality real estate investments in South Korea and throughout Asia Pacific more broadly,” John Pattar said in the statement. KKR hired Pattar from CLSA in May to head its Asia-Pacific property business, as the firm expands beyond leveraged buyouts in the region by adding assets in strategies such as credit and real estate.

KKR said it has committed about $2 billion in equity and debt across almost 50 property transactions in the Asia-Pacific region since 2011. IGIS manages real estate assets valued at more than $20 billion.

©2018 Bloomberg L.P.