IGIS Asia Investment Management, the Singapore-based investment arm of South Korea’s IGIS Asset Management, has teamed up with a leading Korean biopharmaceuticals group to launch a new platform for life science real estate investments across Asia Pacific.
The venture, which will be established in Singapore in partnership with CHA Bio Group, aims to develop and invest in high-quality life science assets, including R&D and manufacturing facilities, medical offices, hospitals and other healthcare centres across the region. The JV will focus on Korea in the initial stages, a representative of IGIS AIM told Mingtiandi.
Although the fund size was not disclosed, an account in Korea’s MTN News states that the new fund is expected to raise a total KRW 810 billion (about $630 million) and will seek investments in Singapore, Japan and Australia as well as Korea.
IGIS Asset Management is Korea’s largest real estate asset manager, with a roughly $45.5 billion portfolio as of year-end 2022. The new fund comes after IGIS AIM said it had closed on its second data centre vehicle with total commitments of KRW 190 billion ($151 million) just last week.
As part of the joint venture with CHA Bio Group, IGIS AIM plans to set up the Korea Life Science Investment Platform, which the company says will be the first Korea-focused investment vehicle targeting life science properties.
While IGIS AIM did not provide any specifics on planned investments, the company spokesperson said that a portion of an IGIS logistics centres has been remodelled as a CGMP (Current Good Manufacturing Practice) facility to be utilized by a multinational life science company. The company has previously partnered with CHA Bio Group on a medical centre in Korea, the spokesperson added.
“The partnership will rely on IGIS’s past track record of real estate transactions and CHA’s expertise in the life sciences industry to gain first-mover advantage in providing life science real estate solutions in South Korea and overseas,” IGIS AIM said in a statement.
Based in the city of Seongnam, south of Seoul, Cha Bio Group is a leading healthcare enterprise that includes CHA Biotech, specializing in cell therapy development, and CHA Healthcare, a global healthcare network provider with medical centres and IVF clinics in seven countries.
The group started construction on a more than $250 million, 710,000 square foot (65,961 square metre) cell gene biobank facility in March of last year. Located in the Pangyo planned city within Seongnam, the project is slated to be one of the world’s largest single facilities for cell and gene therapy manufacturing and advanced stem cell biobanking, with completion expected by the end of 2024.
Korea’s life science industry has undergone rapid growth in recent years, with an abundance of start-ups and established firms looking to expand their labs and manufacturing operations, leading to a shortage of suitable space, according to a report released by UK-based global investment firm Abrdn last August.
Abrdn identified three potential opportunities for life science real estate investment in Korea: the Pangyo Techno Valley innovation park, where a significant number of buildings are over 10 years old and could be redeveloped and upgraded; stabilised core investments in existing assets in Seoul’s Magok Business District and Incheon-Songdo; and ground-up developments of life science properties, which could offer capital growth given the country’s limited new supply of best-in-class labs.
Bullish on Biotech
IGIS AIM’s bet on life science assets follows a string of similar investments by fund managers in Asia as the region’s life science industry is expected to see continued growth over the coming years, boosting demand for specialized spaces including R&D labs and medical offices.
Last June, Australian developer Lendlease partnered with Dutch pension fund and asset manager PGGM in a S$1 billion ($720 million) strategy to invest in innovation and life science properties across Australia, Japan and Singapore.
In the following month, Hong Kong-listed industrial specialist ESR picked up its first-ever life sciences asset by acquiring a business park in the Shanghai biotech cluster known as Zhangjiang Pharma Valley.
Also in July, a joint venture between Dutch pension fund manager APG Asset Management and Singapore healthcare-focused private equity firm CBC Group bought an 80 percent stake in a sprawling life science campus in Beijing’s Daxing district for nearly $180 million.
The venture deepened its commitment to China’s life sciences real estate sector in October by purchasing an industrial site in Shanghai, where it plans to develop manufacturing facilities and R&D office buildings at a total cost of RMB 980 million ($137 million).
Life science companies are poised to expand significantly Asia Pacific through 2025, driving demand for R&D hubs, medical facilities and laboratories as well as related warehouses and offices, according to an industry survey by JLL released in May of last year.
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