Korea Teachers’ Pension (KTP) has become the latest Korean investor in Australian real estate, with the purchase of a Brisbane office tower for AUD206m (€145m).
The pension fund bought the Green Square office building from Australia’s Industry Superannuation Property Trust (ISPT).
John Marasco, managing director of Colliers International capital markets and Investment services, told IPE Real Estate that the deal was carried out by AXA Investment Managers-Real Assets.
He said the main criteria for the investor was the length and quality of the long-term lease on the building, adding that KTP likes to invest in buildings that have government or semi-government agencies as tenants.
Brisbane City Council has an 11-year lease on the building, which is on a site originally owned by the council.
The tower was developed and owned by ISPT, a fund manager for the Australian superannuation industry.
Marasco says Korean capital had been coming to Australia over the past decade, with investments in offices, hotels and shopping centres.
“The South Koreans look for investment-grade assets with long-term lease covenants which offer stable annuity-style income,” he said.
Korean groups, he added, are in the market for assets in the range of AUD200m to AUD500m.
A year ago, a Korean consortium acquired retailer Woolworths’ headquarters in Sydney’s northwestern suburbs in a landmark deal worth AUD336m.
It is believed KTP competed against another Korean group for the Brisbane office building.
Since September 2015, KTP has been pursuing overseas real estate assets as part of wider move into alternatives to boost flagging returns in its domestic market.
The fund’s chairman, Kim Hwa-jin, said then: “We are planning to raise our overseas and alternative investment ratio from 25% to 37% by 2017.”
As with other Korean pension funds, KTP is also known to be looking for opportunities in the debt market, including in Australia.