HONG KONG, June 5 (Reuters) - KKR & Co LP has struck its first real estate deal in South Korea, acquiring a commercial property in Seoul with Hong Kong-based hedge fund LIM Advisors in a deal which local media valued at around 500 billion won ($489 million).
KKR invested in the 83,800 square metre K Twin Towers office and retail complex in Seoul’s central business district (CBD), as the U.S. private equity firm looks to deepen its real estate portfolio in Asia.
Private equity firms globally have expanded from an original model of buying out companies to turn around and sell for profit. They now invest through a range of alternative asset management products, including infrastructure, real estate, hedge funds and credit.
KKR last year hired Bryan Southergill from JP Morgan Chase & Co’s Global Special Opportunities Group to lead its real estate operations in Asia, where compatriot Blackstone Group is the dominant private equity force.
KKR previously set up a $140 million fund to invest in Chinese real estate with listed developer Sino-Ocean Land Holdings Ltd in 2011. (link.reuters.com/quj89v)
KKR's latest investment is the second private equity real estate deal in Seoul's CBD in a month. In May, Gaw Capital Partners said it had invested in the Dongja 8 building, a deal local media reported at around $224.51 million. (link.reuters.com/kab39v)
Local media reported the value of the K Twin Towers acquisition at 20 million won for one pyeong. A pyeong is around 3.3 square metres.
KKR and LIM acquired 100 percent of the equity in a trust managed by Vestas Investment Management.
LIM Advisors is one of Asia’s oldest hedge funds. (Reporting by Stephen Aldred in HONG KONG and Hyunjoo Jin in SEOUL)