M&G Said Close to Buying $1B Seoul Complex After KKR Drops Out

M&G Real Estate is poised to scoop up South Korea’s most expensive single property, as the arm of British insurer Prudential Plc will reportedly soon strike a deal to buy a new twin tower office complex in downtown Seoul for about 1.1 trillion won ($1 billion).

The London-based property investment firm is stepping up to buy Centropolis Towers, according to an account in The Korea Economic Daily citing sources with knowledge of the matter, after a bid by a KKR-led group to acquire the property fell through. Owner and developer CTCore had selected the KKR consortium as the preferred buyer at the end of March, but recently broke off talks after the parties failed to reach a final agreement.

The public auction for the prime asset is set to be completed next month, and the estimated price would value the 134,310 square metre property at around $7,600 per square metre. When contacted by email, an M&G representative told Mingtiandi the company does not comment on market speculation.

M&G Angling for Korea’s Most Expensive Property

Located at 5-1 Gongpyeong-dong in the downtown Jongno district, nearby the Jonggak station of metro line 1, Centropolis Towers is slated for completion this coming June. Domestic commercial developer CTCore began the sale process for the 26-storey twin tower property in January.

The consortium of US private equity firm KKR and Korea’s IGIS Asset Management initially trumped the other shortlisted bidders, including M&G and a consortium of Korean firms NH Investment & Securities and LB Asset Management. The property had also attracted bids from Blackstone Group and Korea Post.

M&G approached CTCore again after negotiations with the KKR-led group stalled out, according to the Korean media account. M&G reportedly offered a higher bid and scored higher on financing abilities than KKR. The firm is understood to have partnered with LB Asset Management, which will execute the deal on behalf of M&G.

The sale of Centropolis Towers, which will account for some four percent of grade A office supply in the downtown business district of Jongno upon its launch, would rank as the biggest single-asset property deal in South Korea in terms of total value.

Purchase Could Boost M&G’s Asia Portfolio 26%

M&G Investments, the investment management arm of Prudential in the UK, Europe and Asia, manages over £351 billion ($474 billion) in assets globally as of year-end 2017. The firm’s real estate unit has £30.1 billion ($42.2 billion) in assets under management worldwide as of March, with nine percent of its portfolio located in Asia.

Australia accounts for over 37 percent of M&G Real Estate’s portfolio in the region, and the firm also has significant exposure to Korea, Japan and Singapore, trailed by Hong Kong and other markets. M&G Real Estate Asia purchased a grade A office tower in Brisbane for A$119.1 million last July.

M&G has invested in logistics centres and retail assets in Korea, including buying Upsquare, the largest shopping complex in the Korean port city of Ulsan, for $131 million in November 2016. Last year, M&G reportedly teamed up with Singaporean sovereign wealth fund GIC to place a failed bid for a new office building in Pangyo Techno Valley near Seoul.

Alex Jeffrey leads M&G Investments in Asia Pacific, based in Singapore, with Ng Chiang Ling reporting to him as CEO of M&G Real Estate Asia.