US private equity giant KKR has teamed up with South Korea’s IGIS Asset Management and National Pension Service (NPS) to buy a $1.9bn (€1.65bn) real estate project in Seoul.

The trio are buying the mixed-use project under development in the Gangnam business district from a consortium led by local engineering firm Daor E&C.

The property will primarily consist of prime grade office space, amenity retail space and a five-star hotel, with a gross floor area of 239,188sqm and net leasable area of 121,707sqm.

KKR said a 20-year master lease agreement for the 263-room hotel has been signed with Shinsegae Chosun, a hotel operator.

John Pattar, a member and head of real estate Asia at KKR, said: “We are thrilled to be investing in what we believe will be an iconic property in an excellent location, and to be teaming up with outstanding partners including IGIS and NPS to do so.

“We look forward to continue building on our global real estate platform by making quality real estate investments in South Korea and throughout Asia Pacific more broadly.”

KKR said its investment is being funded from KKR Asian Fund III.

The latest investment is KKR’s third real estate investment in South Korea. The private equity firm previously invested in The K Twin Towers in June 2014 which was sold to Samsung SRA in January.

Sock-woo Jung, president of domestic investment at IGIS, said: “We are excited to make this investment along with world-class investment firms KKR and NPS.

”We expect to develop the property not just as the best real estate asset in South Korea, but also as a landmark building in the global real estate market.”

Additional terms of the transaction were not disclosed.