Anbang Life-backed fund buys Seoul building for $225 mn

A fund led by a South Korean unit of China’s Anbang Life Insurance Co. Ltd. has bought a prime office building in Seoul for 240 billion won ($225 million) from New York-based investment firm Angelo, Gordon & Co.

Tongyang Life Insurance Co. Ltd., 75% owned by Anbang Life, committed an undisclosed amount to the fund, run by South Korea’s ANDA Asset Management Co. Ltd., as the largest investor in the acquisition deal closed on Dec. 27.

The transaction was first reported by ChosunBiz, an online news outlet of South Korea’s Chosun Ilbo daily and industry sources with knowledge of the matter confirmed the report.

Another South Korean insurer ABL Life Insurance Co. Ltd., which Anbang Life took over in 2016 from Germany’s Allianz Group, leases part of the 39,908-square-meter property, Metro Tower, located near the Seoul Station.

Other major tenants include Korea Public Finance Information Service under the Ministry of Strategy and Finance and Lotte Non-Life Insurance Co. Ltd.

The acquisition came after Anbang Insurnace Group, the parent of Anbang Life, had injected reportedly a combined 2 trillion won into two South Korean life insurers – Tongyang Life and ABL Life., formerly Allianz life – since 2015 for the acquisitions and buying their new shares aimed at bolstering financial conditions.

ANDA Asset plans to renovate part of the 21-story building by adding retail facilities to improve its asset value. Nearby prime office buildings have been benefiting from rising inflows of pedestrians and shoppers since the overpass above the Seoul Station was transformed into a pedestrian road in May.

The vehicle, the first real estate fund for ANDA, is expected to generate a pre-tax annual return of around 7%.

Angelo, Gordon bought the property for about 170 billion won in 2013 from a South Korean conglomerate. It was built in 1970 and renovated twice.

The US investment firm had put the office building on the market since late 2016, but its two previous sale attempts fell through.

A South Korean asset manager, selected as a preferred buyer in December 2016, walked away after failing to attract domestic investors.

In June, another domestic asset manager, then a preferred buyer, abandoned the deal after a key foreign investor in its vehicle backed out at the last stage of negotiations, citing geopolitical risks on the Korean peninsula.

ANDA Asset, with 1.3 trillion won in AUM at end-June, had invested in three US office buildings since 2015. It had focused on hedge funds before setting up an alternative investment division in August.

By Daehun Kim

daepun@hankyung.com