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IGIS consortium submits higher bid than Mirae Asset for IFC Seoul How to finance bid is key with potential participation by NPS in spotlight

Translated by Ryu Ho-joung 공개 2022-04-26 08:09:16

이 기사는 2022년 04월 26일 08:03 더벨 유료페이지에 표출된 기사입니다.

A consortium led by IGIS Asset Management has submitted a higher bid than that of Mirae Asset Global Investments for the International Finance Center Seoul, taking an advantageous position in the bidding war for the city's iconic multi-use complex.

The consortium, which includes IGIS and Shinsegae Property, offered around 4.4 trillion won ($3.5 billion) in the third round of bidding earlier this month, versus a 4.2 trillion won bid submitted by Mirae Asset Global Investments, sources said. Eastdil Secured, which is managing the sale, is expected to name a preferred bidder as soon as the end of April.

Mirae Asset Global Investments failed to reach an agreement on a possible partnership with Hanwha Galleria. In contrast, IGIS teamed up with Shinsaegae Property, which operates shopping mall brand Starfield.

Given the small price difference between the two offers, how to finance a bid will be the key to winning the race, industry watchers said – especially as domestic institutional investors are showing lukewarm interest in the property in a higher interest rate environment.

IGIS has reportedly raised approximately 1 trillion won from domestic and international institutional investors. Mirae Asset Global Investments has access to 800 billion won that China’s Anbang Insurance Group gave back to Mirae Asset Securities after the US hotels deal between the two companies was scrapped.

Many industry experts say a potential participation by the National Pension Service (NPS), South Korea’s biggest institutional investor, as an anchor investor in the complex could help turn the atmosphere.

What’s noteworthy is that former NPS executive Yoo Sang-hyun leads the private equity team at Mirae Asset Global Investments. An investment professional, Yoo previously held several leadership roles for alternative investment at the pension fund.

However, IFC Seoul may not be attractive to NPS, some observers said. The complex, which is in the city’s major financial district Yeouido, is owned by Canada-based Brookfield Asset Management.

NPS’ participation in the investment in the complex could lead to criticism that the state-controlled pension fund is using its assets only to help the foreign asset manager exit its investment, especially given that the higher price tag has lowered the property’s expected rate of return. Industry experts said the complex's price tag over 4 trillion won would likely mean a cap rate of below the interest rate for senior loans.

The multi-use complex comprises three office towers, the five-star Conrad Seoul Hotel and IFC Mall, with a total floor space of about 507,273 square meters. It was completed in August 2012, with its tenants including Deloitte Anjin, Meritz Securities Group and IBM.

“It is true both IGIS and Mirae offered over 4 trillion won bids, and IGIS has an advantage in terms of price,” a source said. (Reporting by Min-kyu Sin)
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