South Korean portfolio grows to almost KRW 2.6 trillion of real estate and infrastructure assets under management
Keppel’s private funds, Keppel Asia Macro Trends Fund IV (KAMTF IV) and a Co-investment Programme (CIP) committed by a leading Korean financial institution, have acquired the Bank of Korea’s Sogong Annex Facility (the Property) in Seoul’s CBD. With this latest acquisition, Keppel has closed over KRW 1.4 trillion (S$1.5 billion) worth of deals in South Korea since 2021, among other prime real estate and infrastructure assets, bringing Keppel’s South Korean assets under management to almost KRW 2.6 trillion (S$2.6 billion).
KAMTF IV and the CIP will each hold an effective interest of 50% in the Bank of Korea’s Sogong Annex Facility, which comprises a 13-storey office building with adjacent parking facilities, spanning a total gross floor area of about 15,750 sm. Originally built as the headquarters of Korea Commercial Bank, the Property is strategically located at the intersection of Myeongdong and Namdaemun in Seoul’s CBD, and is surrounded by offices of various large enterprises and financial institutions, including the Bank of Korea. The Property is highly accessible via public transportation, and is a stone’s throw from the City Hall and Myeongdong subway stations.
To create value and drive returns for its investors, Keppel will implement asset enhancement initiatives, which include upgrading the office building’s façade and interior spaces, as well as undertaking active lease management to optimise occupancy and achieve higher rents. In addition, Keppel will leverage its Real Estate Division’s sustainable urban renewal (SUR) expertise to improve the asset’s operational efficiencies and performance.
Mr Louis Lim, CEO of the Real Estate Division of Keppel Corporation, said, “Keppel is excited to continue contributing to the renewal of Seoul’s urban landscape. Similar to how we are refurbishing Samhwan Building, acquired last year jointly with Keppel’s private funds, we will leverage digital technologies to retrofit and future-proof the Sogong Annex Facility. We will also be incorporating features such as a high-performance building facade, efficient cooling and heating systems, as well as LED lighting systems to enhance the building’s sustainability performance and indoor environmental quality. We are confident that the attractiveness and overall value of the asset will be greatly enhanced when refurbishment works are completed.”
Mr Robert Sung, Chief Representative (Korea) of Keppel Corporation, said, “Keppel has established itself as a premier asset manager in South Korea, having cumulatively managed about S$5.3 billion of assets in the country since 2004, and realising robust returns that exceeded our targets for the assets that were divested.
“Keppel is renowned in the market for its value-add investments and strong management capabilities, exemplified through the successful execution of initiatives for various landmark assets, including Jongno Tower, Yeouido Finance Tower and D-Cube Sheraton. These projects involved extensive asset enhancements works, including renewing lobby areas, refurbishing and repositioning of retail floors, enhancing tenancy, expanding floor areas, converting spaces, as well as implementing energy-efficient and water-saving features.
“We are excited to continue our expansion in South Korea through the acquisition of the Bank of Korea’s Sogong Annex Facility. South Korea is a market with strong fundamentals and where Keppel sees tremendous opportunities. We expect to invest some S$3 billion over the next three years across real estate, particularly where we can leverage Keppel’s value-add capabilities, as well as infrastructure assets.”
Keppel currently manages a diverse portfolio of close to KRW 2.6 trillion in assets in South Korea, including the latest Sogong Annex Facility, as well as the 15-storey Samhwan Building in Seoul, and waste management company, Eco Management Korea Holdings, which were acquired in 2022.
With an experienced team, comprising over 15 investment and asset management professionals in South Korea, deep operating capabilities, as well as innovative value creation strategies, Keppel is well-positioned to seize opportunities in South Korea to create value and drive returns for its investors.
The abovementioned transaction is not expected to have any material impact on the earnings per share and net tangible assets per share of Keppel Corporation for the current financial year.
Keppel Corporation (SGX:BN4) is a global asset manager and operator with strong expertise in sustainability-related solutions spanning the areas of infrastructure, real estate and connectivity. Headquartered in Singapore, Keppel operates in more than 20 countries worldwide, providing critical infrastructure and services for renewables, clean energy, decarbonisation, sustainable urban renewal and digital connectivity.
Keppel creates value for investors and stakeholders through its quality investment platforms and diverse asset portfolios, including private funds and listed real estate and business trusts. At the end of 2022, Keppel had $50 billion of assets under management.