South Korea’s leading asset manager Mirae Asset Global Investments Co. has cashed out of a German premium office building it bought two years ago, earning 160 billion won (US$134.74 million) from the investment. Its annual internal rate of return (IRR) is estimated to reach 25 percent.
The company said on June 17 that it has signed a deal to sell the Taunusanlage 8, a 17-story office building located in the heart of the banking district in Frankfurt am Main, Germany, for 400 million euros (US$448.68 million or 532.81 billion won).
Mirae Asset Global Investments had acquired the building in August 2017 for 280 million euros (US$314.08 million or 372.97 billion won) through a private equity real estate fund. South Korea’s major pension funds and institutional investors participated in the fund as an investor (LP) at that time. They gained a profit of 160 billion won (US$134.74 million) in less than two years. The annual IRR rate is more than 25 percent when including the mid-7 percent range dividend it gained over the last two years.
Mirae Asset Global Investments was able to make a huge profit with its excellent deal sourcing capability and batting eye. The Taunusanlage 8 had been two-thirds vacant when Mirae Asset first joined the competitive tender for the office building against German investors. Global law firm Linklaters was the only tenant when Credit Suisse completed construction of the building.
Mirae Asset Global Investments sought both stability and profitability by securing a three-year guaranteed rent arrangement with the seller to receive a fixed rental income even for vacancies. Within a year, it drove up the occupancy rate to 99 percent and the building now houses a number of reputable tenants, including the global law firm Linklaters, the global office-sharing giant WeWork and the global mutual insurance company FM Global. Mirae AssetGlobal Investments was planning to own the building for five years, but it decided to make an early sale upon receiving a favorable bid from a creditable buyer.
Mirae Asset Global Investments has made a series of high-profile acquisitions, starting with the Mirae Asset Tower in Shanghai, China, in 2006.It is also the owner of the hotel chains Four Seasons in Sydney and South Korea, and Fairmont Orchid in Hawaii and San Francisco.
Mirae Asset Global Investments is diversifying its investment assets, ranging from premium office buildings to hotels and logistics centers at home and abroad.