Blackstone Linked to $2.1B in Potential Korean Property Acquisitions

Blackstone could be on the verge of acquiring $2.1 billion in Korean real estate assets, if two reported deals come through for the US alternative investment giant.

Already the biggest landlord in the US, Blackstone is said to have been named the preferred bidder for a 24-storey office tower in Seoul, which is reported to be selling for 470 billion won ($430.9 million).

The Manhattan-based private equity investor is also said to be competing with Canada’s Brookfield and a consortium composed of Invesco Asset Management from the US and China’s CIC sovereign wealth fund, to take over the mixed-use International Financial Centre in Seoul from AIG. The deal is expected to transact at 2 trillion won ($1.7 billion).

Blackstone Favored in Office Tower Sale

According to investment banking industry sources cited in the Korean press, Mirae Asset Management, which owns the Capital Tower office building in Seoul’s Gangnam financial district, has named Blackstone as the preferred bidder for the 63,000 square metre project.

Should Blackstone’s bid be successful, it would mark the second time in the last few weeks that it has closed a deal with Mirae, after the Korean firm purchased the Hyatt Regency Waikiki Beach Resort and Spa in Hawaii from Blackstone for $780 million during the first week in June.

The Capital Tower deal, which was first reported earlier this month, was followed this week by accounts of Blackstone, along with Brookfield and Invesco, being shortlisted for the 501,000 square metre (5.4 million square foot) IFC complex.

The IFC, which opened its office space of occupation in 2011, includes three office towers (one of 29 stories, another of 32 stories and a third at 55-stories), a shopping mall, and the Conrad Seoul Hotel.

US-based real estate investment brokerage Eastdil Secured is said to be managing the sale for AIG, and a preferred bidder is expected to be named this month. Blackstone has not commented publicly on the reported deals.

Global Investors Getting Interested in Korea

Either of the two properties would be Blackstone’s first commercial real estate acquisitions in Korea – a market that has begun drawing increasing attention from global institutional investors in the last few years.

Hong Kong-based Gaw Capital bought an office building in Seoul’s Yongsan District in 2014 for an undisclosed amount, while Shanghai-based Greenland Group has been setting up a resort on Korea’s Jeju island. Mainland warehouse development startup e-Shang Redwood has also expanded into Korea after setting up a joint venture logistics company there with backing from Dutch pension-fund manager APG and Canada’s CPPIB.