One of North America’s best-known private equity firms goes Gangnam-style to lead today’s list of Asia real estate headlines, by leading the acquisition of a $1.9 billion project in the posh area of Seoul with two of South Korea’s biggest investors. Back in Hong Kong, the hunger for office space in the Asian financial capital is enough to make the Mandarin Oriental Group shut down the Excelsior Hotel for conversion into a $3.8 billion office project and Colliers International says it is keeping the faith with a jumbo collective sale in Singapore. Read on for all these stories and more.
US private equity giant KKR has teamed with IGIS Asset Management and the National Pension Service of Korea to acquire a mixed-use real estate project in Seoul’s Gangnam business district expected to cost approximately KRW 2.1 trillion (US$1.9 billion).
The project, currently under construction at the intersection of Teheran-ro and Eonju-ro on Seoul’s former Renaissance Hotel site includes prime grade office space, amenity retail space and a five-star hotel. With an aggregate gross floor area of 239,188 square meters for the project, a 20-year master lease agreement for the 263-room hotel has already been signed with hospitality manager Shinsegae Chosun. Read more>>
The Excelsior, the iconic waterfront hotel built on the very first plot of land sold during the British colonial era, will shut at the end of March for redevelopment into an office tower, according to its owner.
Mandarin Oriental International will tear down the four-star hotel and erect a commercial office tower on the site, which will take about six years to complete. The total development is budgeted at US$650 million, according to the company’s announcement on Tuesday morning. Read more>>
Colliers International, the marketing agent for Tulip Garden, has quashed speculation that the S$906 million en bloc sale of the Farrer Road project has hit a speed bump.
Its managing director Tang Wei Leng said: “There is no basis to the market speculation. The Tulip Garden collective sale is proceeding and we are working towards the completion of sale.” Read more>>
Singapore’s Royal Group disposed of two hotel assets — Hilton Garden Inn North and Hilton Garden Inn South — in Jalan Tuanku Abdul Rahman, Kuala Lumpur, to Thailand-listed Strategic Hospitality Extendable Freehold and Leasehold Real Estate Investment Trust (SHREIT) last month, less than three years after acquiring them.
Royal Group managed to flip the assets, which have a total of 532 rooms, for an estimated RM240 million ($57.8 million) or RM451,128 per room. At that price, observers say, the group made a handsome profit of about RM65 million after deducting its initial investment and renovation cost. Read more>>
Less than a year after it went on the market, the Hotel Indigo Glasgow (Scotland) has new ownership.
Maven Property, the property arm of Maven Capital Partners, has completed the £14.5-million sale of the 94-bedroom hotel to Heeton Holdings, a Singapore-listed real estate conglomerate as well as property investment group KSH and construction group Lian Beng. Heeton holds an effective interest of 60 percent while KSH and Lian Beng have effective interests of 20 percent each. Read more>>
Investors should take a fresh look at Tokyo’s office towers for their superior return yield over Hong Kong, where prices and borrowing costs eat into profits, said asset manager TH Real Estate.
“Tokyo can provide a strong equity yield. With an eye to the 2020 Olympics, infrastructure spending and rising tourism have also underpinned above-trend growth for a number of years. It is currently a principal city which attracts income-driven investors like us,” said Harry Tan, head of research, Asia-Pacific, at TH Real Estate. Read more>>