KKR, IGIS Asset Management and Korean real estate developer SK D&D have paid an undisclosed sum to buy the Namsan Square office tower in Seoul.

The 75,00sqm building is currently held in a real estate investment trust operated by KOREIT.

IPE Real Assets understands that the owner is Korea’s largest pension fund, NPS, and the purchase price was around KRW500b (€370m).

Sources said KKR had an 80% of common equity interest with the remaining 20% split between IGIS balance sheet and other Korean partners.

It is also understood IGIS, South Korea’s largest asset manager, is arranging the preferred equity capital and third party financing package which would include the cost of capital expenditure on the building, totalling KRW570bn.

David Cheong, a director on KKR’s Asia Real Estate team, said: “South Korea holds terrific potential for real estate investment, and the market is a core part of KKR’s regional real estate strategy.”

Junho Pok, head of real estate development at IGIS, said Namsan Square was located at the “gateway” to Seoul central busioness district, and would be upgraded and renovated.

Namsan Square is KKR’s fourth real estate investment in Korea.

Previous investments include The-K Twin Towers, a prime office complex located in Seoul’s Gwanghwamun district; Renaissance Parc, a mixed-use real estate development project in Seoul’s Gangnam business district; and the BLK Pyeongtaek Logistics Center development in Pyeongtaek.

KKR had committed more than US$1.4bn (€1.3bn) in equity to its pan-regional real estate strategy as of 31 December 2019.