From Brookfield Asset Management of Canada
Mirae Asset Group has decided to acquire International Finance Center (IFC) Seoul in the Yeouido financial district in Seoul for 4.1 trillion won, beating Aegis Asset Management and Shinsegae Consortium.
Currently, IFC Seoul is owned by Brookfield Asset Management, a Canadian real estate investment company. The deal is expected to bring more than 1.5 trillion won in profits to the Canadian investor.
Mirae Asset Management announced on May 11 that it has been chosen as a preferred bidder by Brookfield Asset Management. Mirae Asset Management plans to complete the transaction within the third quarter of this year.
IFC Seoul is a large commercial complex consisting of three office buildings, Conrad Hotel, and IFC Mall. Its total floor space stands at about 506,000 square meters. It is home to many Korean and foreign financial and multinational companies, including Deloitte Anjin, AIG, CLSA, IBM Korea and Sony.
Mirae Asset Management has lowered the IFC Seoul acquisition price by about 300 billion won to 4.1 trillion won in consideration of rising interest rates.
Brookfield acquired IFC Seoul from AIG Group of the United States in 2016 for 2.55 trillion won and will make about 1.5 trillion won in profits in about six years. In 2016, AIG earned about 900 billion won in profits by selling IFC Seoul to Brookfield.
Mirae Asset Management plans to establish a new private REIT to finance the acquisition. In this case, a pension fund or mutual aid association must secure at least a 50 percent stake in the company that will buy IFC Seoul.
Mirae Asset Group will have to mobilize institutional investors such as domestic pension funds and mutual aid associations to raise about 900 billion won. In Korea, institutional investors that can attract large-scale funds worth around 1 trillion won are limited to the National Pension Service, so it remains to be seen whether the National Pension Service will take part in the deal.
Mirae Asset Group is expected to boost IFC Mall’s profitability by remodeling it and increase lease rates of the office buildings.