Blackstone Said to Choose Hana as Preferred Bidder for $1.1B German Complex

Blackstone is preparing to sell Germany’s largest office building to a Korean investor, with Hana Financial Investment said to have entered into exclusive negotiations to purchase a Frankfurt property from the US investment giant for KRW 1.3 trillion (1.1 billion).

The Seoul-based investment manager, along with London-based asset manager AGC Equity Partners, has been named as the preferred bidder for The Squaire, a 140,000 square metre (1.5 million) square foot) office facility near the Frankfurt airport, according to a report in Korean media outlet Pulse News.

Should the negotiations result in a sale, the resulting transaction would be the latest in a growing series of cross-border real estate acquisitions by Korean buyers, as institutions from the North Asian nation climb the ranks of global real estate investors.

Koreans Turn From Towers to Groundscrapers

The target of Hana Financial Investment’s talks with Blackstone is a nine-storey tall office block built above a train station which links Frankfurt to Cologne. Termed a groundscraper for its limited height, the 660-metre-long building is home to accounting firm KPMG and a pair of Hilton Hotels. Earlier this year, tire maker Michelin also agreed to lease 6,000 square metres in the building, which was completed in 2011.

Connecting directly to Terminal 1 of Frankfurt Airport and designed by Frankfurt design firm JSK, the primary investor in the project’s development was Bonn-based IVG Immobilien.

Funds managed by Blackstone purchased IVG’s OfficeFirst business for an enterprise value of €3.3 billion (then $3.65 billion) in 2016, acquiring the Squaire as part of that 1.4 million square metre portfolio of German offices.

The Frankfurt deal has been revealed just ten months after another Hana business, Hana Alternative Asset Management, agreed to buy the Sanctuary Buildings in London’s borough of Westminster for £285 million ($366 million) in November last year.

A Taste for European Assets

Hana has continued to buy properties in Europe this year as part of South Korea’s growing wave of cross border investments.

In April of this year Hana Financial Investment teamed up with its compatriots from Vestas Investment Management to close on a €145 million purchase of the Charlemont Exchange in Dublin from local Irish developer Marlet.

That Dublin deal was followed four months later by Hana joining a consortium of Korean investors, including asset manager Mastern Investment Management, Meritz Securities and NH Investment & Securities, as well as Munich-based Wealthcore Investment Management, in purchasing the Hilton Parkview Hotel in Vienna for €370 million.

According to research by JLL, Korean investors made their biggest total investment in overseas real estate assets ever in the first half of 2019, spending $5.3 billion to buy up properties over the period.

During this month, Mirae Asset Management is reported to have agreed to buy a portfolio of US luxury hotels from China’s Anbang Insurance for $5.8 billion, and a consortium backed by Korea’s Meritz Securities is said to have entered exclusive negotiations to buy the 36-storey Finance Tower in Brussels for more than €1.3 billion.

In July, Mirae Asset Daewoo, a stock brokerage unit of the financial conglomerate, completed its KRW 1.08 trillion ($925 million) acquisition of the Jean-Paul Viguier-designed Majunga Tower in Paris.