KOREA - Morgan Stanley is to boost its property investments in the Korean market with the acquisition of Daewoo Engineering Headquarters in the capital, Seoul, for 960bn won (€0.76bn).
AHI Holdings, a real estate fund managed by the bank, will acquire the 23-story building after winning chief-bidder status last month against bidders, including Macquarie.
Under the deal, Daewoo will be responsible for remodelling the building and sourcing tenants – a risk-mitigating element on the part of the buyer.
The Daewoo deal is the Korean property market’s largest to date by value but scale has characterised several of Morgan Stanley’s recent regional moves as in April, for instance, it paid All Nippon Airways ¥281bn (€1.6bn) for 13 Japanese hotels.
The US investment bank has refused to comment on the deal but Hong Kong-based spokesman Nick Footitt pointed to the bank’s Asia acquisition strategy, which has included both mature markets such as Hong Kong and Japan, and emerging markets such as China.
Recent acquisitions, including the A$550m (€3.4m) acquisition of the Australian Grand Hotel group, have been made by MSREF funds – fund managed by Morgan Stanley but open to outside investors.
Morgan Stanley launched the largest ever real estate fund in June with $8bn (€5.8bn) in equity to invest in mature markets such as Japan and emerging markets such as China, India, Russia, Turkey and Latin America.
Its fund manager has already invested 20% of the equity raised from institutional investors in Europe, the US and the Middle East.