SC Capital Sells Seoul Education Building for $38M

Singapore’s SC Capital Partners on Monday announced the sale of an education-focused commercial building in Seoul for KRW 54 billion ($37.7 million), as the fund manager continues to divest learning-related assets under the firm’s core-plus SCORE strategy.

SC Capital had acquired the six-storey Daechi Building in the Korean capital’s Gangnam district in October 2016 for KRW 26 billion, the company said in a release.

The Singaporean firm led by founder and chairman Suchad Chiaranussati upgraded the ground-floor retail space from a discount store to an Artbox stationery gift shop to complement the building’s existing educational tenant, ILE Language Institute, and boosted rental income through proactive leasing initiatives, according to the announcement.

“This successful exit reflects our conviction in education as a long-term structural theme and our ability to generate value through active asset management,” Suchad said.

Robust Location

The fully occupied Daechi Building has a gross lettable area of 4,189 square metres (45,090 square feet) and enjoys stable rent growth underpinned by a concentration of schools, tutoring academies and upscale residential developments in the surrounding Daechi neighbourhood, said SC Capital, which is 40 percent owned by Temasek-controlled CapitaLand Investment.

An undisclosed domestic buyer picked up the property for the equivalent of KRW 12.9 million ($8,986) per square metre of gross lettable area. The transaction reflects a net operating income yield below 3 percent based on the sale price, according to SC Capital.

The Korean disposal follows the SCORE fund’s exit earlier this year from another 2016-era investment, a 233-bed student housing complex east of downtown Sydney.

SC Capital sold the facility in Kensington to the University of New South Wales at a significant premium to the acquisition price and a 19 percent mark-up to book value, Mingtiandi reported in March. SCORE had acquired the Australian asset nine years ago for A$57 million (then $44 million) as one of the strategy’s first investments.

Shifting Sands

SC Capital has turned its attention to the Middle East in recent days, with the firm earlier this month revealing the creation of a UAE industrial development fund co-sponsored with SGX-listed CapitaLand Investment.

SC GCC Real Estate Industrial Development Fund, which is targeting a minimum equity raise of $500 million, will support development of an industrial project in the UAE’s northernmost Ras Al Khaimah emirate spanning 300,000 square metres of land and expected to attract more than 50 tenants.

The fund’s launch came four months after the announcement that Thai financier Suchad would back a newly established boutique advisory firm headquartered in Abu Dhabi with a focus on real assets including commercial properties, hotels and data centres.

Elaeo Partners won the support of the SC Capital boss and Andrew Pettit, co-founder of London-based fund manager Revcap, as the firm seeks to profit from the growing stream of cross-border institutional capital flows between Asia, Europe and the Middle East.