GLOBAL - Seoul-based pension scheme the Public Officials Benefit Association (POBA) is to invest approximately £170m (€193.4m) in prime London property over the next few months.
The scheme has hired ING REIM to scout City property for what will be its first real estate investment outside its domestic market.
ING REIM head of acquisitions Gary Moore told IP Real Estate: "If you're sitting in an office in Seoul, London is the only city they will understand. We've talked about Manchester, but London is the only city they're interested in."
He added: "It's an immature fund that can't invest any more in its local market. The first ports of call in this situation will be Singapore and Hong Kong, Los Angeles and New York, or London. Although London is some way through the cycle and the market is tightening, pricing is more attractive in London."
Apart from targeting properties with long-term income prospects, the pension scheme is focusing on the City, rather than the rest of central London.
The fund has a minimum income return target, and investing in central London assets would cost it 5-5.25%.
"Basically, they can't afford to invest in the West End," said Moore.
He added that the fund manager had already drawn up a shortlist of potential acquisitions, with a view probably to selecting one of them.
This is the fund manager's second pension scheme separate account mandate for UK property after it was awarded one to build a UK property portfolio for Malaysia's first-pillar pension scheme last year.
