Shinhan buys KPMG-leased Prague building for $58 mn: report

Shinhan Investment Corp., a brokerage arm of South Korea’s leading banking group, has bought a KPMG-leased office building in central Prague for 65 billion won ($58 million), which marked the first property acquisition in the Czech Republic by a South Korean financial institution, according to a media report.

The acquisition closed on Dec. 18 came just after two small South Korean financial services firms sealed a 183-billion-won purchase of an office property in Poland in search of niche markets.

“Prague in Czech has strong economic fundamentals and meets conditions for a niche market. Because it has a top global company as tenant, we will be able to earn stable incomes like investing in fixed-income products,” he added.

Shinhan, part of Shinhan Financial Group, targets mid-7% annual returns from the acquisition for an expected investment period of three and a half years.

KPMG, an accounting and consulting firm, fully occupies the property located in the central business district of Prague under a 10-year lease term.

Of the 65-billion-won cost, Shinhan pumped 30 billion won of its own capital into the transaction and borrowed the rest from local banks in the Czech Republic.

It will sell down part of its equity interest to a few institutional investors.

The building is within a five-minute walk from a subway transfer station and a bus terminal connecting other cities of Europe.

“This transaction will serve as an important springboard for Shinhan Investment to lead forward in overseas real estate investment. We will continue to search good assets with the same strategy,” another Shinhan source told the edaily.

Photo: KPMG website