Hana Fin-led group poised to buy $185 mn Prague office complex

A consortium led by Hana Financial Investment Co. Ltd. and Hana Alternative Asset Management Co. Ltd. has been chosen as the preferred buyer for a three-building office complex in Prague, Czech Republic, which is valued at around 210 billion won ($185 million).

The two units of South Korean banking group Hana Financial Group joined hands with White Star Real Estate, a Europe-based asset manager, to acquire Rustonka Business Center in Karlin, part of Prague 8 municipal district, according to sources with knowledge of the matter on March 12.

They are aiming to close the transaction in April after due diligence study.

The 37,000-square-meter office complex consists of three buildings, two of which were completed in 2017 and 2018 respectively. The third building is scheduled to be completed next month.

Amazon occupies one of the buildings of which the vacancy rate is below 5%.

Other tenants include data management company VEEAM, French asset manager Amundi and China’s Bank of Communications.

A unit of Gramexo PLC owns the property on land formerly occupied by the Rustonka factory, with developer J&T Real Estate taking charge of the construction.

For the acquisition, the Hana-White Star consortium will put a combined 81 billion won into a special purpose company (SPC) in equity investment and borrow the remainder from local lenders.

White Star Real Estate will take 5% of the equity.

The two Hana units will sell down most of their equity in the property to domestic institutional investors through two types of equity securities with a five-year maturity. They are expected to yield 6% and 9% per annum, respectively.

Hana Alternative is also making principal investment in part of the equity.

“Sourcing attractive overseas deals has become harder. We developed a deal structure involving co-investment and principal investment, which would be attractive to institutional investors,” a Hana Alternative source told the Korean Investors.

PARTERSHIPS

With competition for real estate investments in Europe intensifying, a growing number of South Korean asset managers joined hands with local partners to source investment opportunities.

Mirae Asset Daewoo Co. Ltd. recently teamed up with Amundi to buy Tour Majunga, a landmark building in France, for around 1 trillion won.

On March 12, Hana Financial Investment said in a statement that it has signed a partnership agreement with Deutsche Invest Capital Partners (DICP), a German alternative investment firm, to cooperate in sourcing investments in not only Germany, but other parts of Europe.

The investment by the Hana-led group in Prague's real estate market comes just three months year after Shinhan Investment Corp. acquired a KPMG-leased office building in central Prague for 65 billion won ($58 million).

In 2017, the National Pension Service (NPS) co-invested in the River Garden I building in Prague through a real estate fund of LaSalle Investment Management, in a deal reportedly worth €57 million ($64 million).

By Daehun Kim

daepun@hankyung.com