Hana Financial buys US REIT’s preferred stocks for $125 mn

Hana Financial Investment Co. Ltd. has bought new preferred shares issued by a US real estate investment trust company for $125 million, ahead of the REIT’s initial public offering tentatively set for early next year.

Hana purchased all five million preferred shares of Griffin Capital Essential Asset REIT for $25 apiece, according to investment banking sources last week.

The brokerage unit of a top South Korean banking group acquired them via a private vehicle of Shinhan BNP Paribas Asset Management Co. Ltd. for resale to domestic institutional investors.

The preferred stocks are expected to yield mid-6% with a term of five and a half years. It would be the first investment in preferred shares of a large US REIT arranged by a South Korean financial services firm.

Griffin Capital Essential Asset REIT is part of Los Angeles-based Griffin Capital Corporation, a real estate investment and REIT manager with $10.3 billion of AUM.

The REIT company, launched in 2008, issued the shares to expand portfolio with new acquisitions.

It has already invested in 74 real estate assets across the US, including the Coca-Cola’s office towner in Atlanta, American Express’s Phoenix Service Center and AT&T office in New York. Ninety percent of the portfolio is made up of office buildings.

Hana plans to bulk up its US REIT portfolio, said one of the sources.

The US REIT market, worth over $3 trillion, has held up well during economic downturns and financial market meltdowns, and about 200 REITs with a market value of $1.1 trillion are traded on the US stock market.

Last year, Hana Asset Management Co. Ltd., an affiliate of Hana Financial, acquired DreamWorks Animation’s headquarters and studios campus in California from Griffin Capital Corporation for 350 billion won.

daepun@hankyung.com