Mirae Asset, NH Investment join $134 mn Slovakia office deal

Mirae Asset Daewoo Co. Ltd. and NH Investment & Securities Co. Ltd. have participated in a 120-million-euro ($134 million) acquisition of an Amazon-leased building in Slovakia as limited partners, which marked the first entry by South Korean capital into the Slovak real estate market.

London-based Valesco Group and Seoul-based AIP Asset Management Co. Ltd. recently teamed up to buy the Twin City Tower in Bratislava, the capital of Slovakia, from HB Reavis, a real estate developer.

Online retailer Amazon is the main tenant under a 10-year lease.

Mirae Asset Daewoo and NH Investment have committed undisclosed amounts to a fund launched for the purchase for expected annual returns of 8%, according to real estate sources on June 18.

The expected returns for a five-year investment period include currency hedging premiums.

In the vicinity of the 34,752-square-meter building in central Bratislava are pharmaceutical company Bayer, Swiss RE and auditing firm PwC located.

South Korean investors have been expanding into central and eastern European real estate markets in search of better returns.

The average commercial rental yields in downtown Bratislava are 3% points higher than those in Vienna, Austria, which is 40 minutes from the Slovak capital.

The sources said that borrowing costs for the acquisition were between 1% and 1.5% per year. But it was not disclosed how much the Valesco-AIP consortium borrowed to fund the acquisition.

Last year Valesco Group and AIP Asset joined forces to acquire Microsoft’s headquarter office in Britain for 100 million pounds on behalf of South Korean institutional investors.

hiuneal@hankyung.com