Kiwoom Asset sets up $56 mn retail funds to buy Amsterdam office

Kiwoom Asset Management Co. Ltd. plans to raise 50.7 million euros ($56.2 million) from individual investors in South Korea in August to buy an office complex in Amsterdam, the Netherlands, for 130 million euros ($144 million).

The South Korean asset manager launched four retail funds this week with a term of five and a half years to acquire Queens Towers from Maxima Holdco, Kiwoom said in a regulatory filing on August 16.

The retail fund launch comes as Kiwoom Asset is separately in talks to buy another Amsterdam office building for reportedly 250 billion won. Kiwoom declined to comment on the negotiations, citing a confidentiality agreement.

Constructed in 2001, Queens Towers consists of three office buildings with a combined floor space of 28,020 square meters.

It is almost fully leased. Key tenant UWV, the employee insurance agency of the Netherlands, occupies 79% of the complex as its headquarters through September 2028.

Kiwoom did not provide an expected return from the property investment.

If it fails to raise the target amount by August 26, it will set up a private fund to cover the shortfall, it added.

Kiwoom will borrow 78 million euros in a five-year loan, or about 60% of the acquisition price.

Amsterdam's office market will be underpinned by buoyant economic growth and job market, compared with other parts of the Netherlands and other countries in the euro zone, the company said in the filing.

West Axis, where Queens Towers is located, is emerging as a new business district.

South Korean asset managers and brokerage firms have launched a string of retail funds at home to finance their overseas property investments in recent years.

Despite worries about their excessive competition for global property deals and higher acquisition prices, those retail funds have attracted yield-hungry individual investors and were fully subscribed within a few days.