South Korea’s Public Officials Benefit Association (POBA) has allocated an additional €200m to its European real estate separate account with CBRE Global Investors and IGIS Asset Management.
The mandate, which was initially focused on offices, has also been widened to include residential, logistics and alternative sectors such as life sciences and data centres, as well as listed real estate securities.
CBRE Global Investors said the latest commitment – the third tranche since the mandate was set up in 2016 – would provide an additional investment capacity of more than €400m when factoring in leverage.
Je wook Joung, portfolio manager at CBRE Global Investors, said it was “a strong vote of confidence for the enduring appeal of European real estate”.
He said: “Our mandate from POBA is the first discretionary separate account for direct real estate investments in Europe from a South Korean institutional investor, which gives us the unique ability to deploy capital quickly on their behalf, with certainty of execution.
“Expanding our investment focus to include other sectors, we are actively seeking investments to build a well-diversified portfolio producing secure cashflow for our client and its members.”
Bas Tiemstra, the head of separate accounts for continental Europe and APAC inbound at CBRE Global Investors, said: “We are seeing increasing demand from investors such as POBA for more holistic investment solutions across both regions and sectors.
“This ranges from direct real estate mandates to closed and open-ended funds as well as separate accounts for global listed real estate and infrastructure strategies.”
Joseph Lee, joint managing CEO of IGIS, told IPE Real Assets that the market had changed since POBA awarded its previous mandates and would now invest in residential assets, as well as logistics, data centres, and medical and healthcare offices.
“Residential has proven to be a defensive asset class, even during and after COVID,” he said.
According to Lee, the mandate in 2016 was given €200m to invest in core office assets in gateway cities, and in 2018 a further €100m was allocated for core-plus and value-add assets in markets that included Hamburg, Brusssels, Prague and Barcelona.
The new mandate can look additional cities, including Copenhagen and Vienna, and can also invest in public real estate.
“We are able to invest in listed REITs, so this is a hybrid direct and indirect strategy,” Lee said.