Mirae Asset buys $48 mn mezzanine debt backed by FedEx-leased warehouses

Mirae Asset Global Investments Co. Ltd. invested 54 billion won ($48 million) last week in mezzanine debt secured on two warehouses leased to FedEx Corporation on behalf of South Korean institutional investors, in its second investment in the logistics facilities used by the US delivery services company.

The debt was issued for refinancing by a US real estate developer that owns the two warehouses in Florida and Massachusetts respectively. They are used by FedEx under long-term contracts.

The debt investment is expected to deliver annual returns of 8% to 9% through 2023 after currency hedging costs, according to investment banking sources on Sept. 21.

MetLife, a US insurer, acquired the senior tranche of the debt facility.

South Korean investors in the mezzanine debt include Mirae Asset Life Insurance (25 billion won), Korea Fire Officials Credit Union (12 billion won), Mirae Asset Capital (10 billion won) and Mirae Asset Daewoo (4 billion won).

Earlier last year Mirae Asset Global, South Korea's leading mutual fund house, had invested 200 billion won in mezzanine debt secured by six warehouses of FedEx via its first blind-pool fund for global real estate investment. The fund, closed at 450 billion won in 2015, also bought the Cologne City Hall building in Germany, and achieved an annual return of the 9% range up to date.

“For property equity investment, institutional investors are looking to Europe rather than the US where prices have jumped,” a real estate industry source told the Korean Investors. “In the US, the booming ecommerce is whetting investor appetite for logistics facilities, instead of large-size office buildings.”

By Daehun Kim

daepun@hankyung.com

Photo: Getty Images Bank