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Logistics

KB Securities buys Amazon’s Edinburgh logistics center for $86.5 mn: report

Aug 18, 2020 (Gmt+09:00)

KB Securities Co. has reportedly acquired Amazon’s logistics center in Edinburgh, Scotland, for 102.5 billion won ($86.5 million), which the online retailer has leased for at least 11 years.

For the acquisition, KB invested around 42 billion won via a fund jointly launched with Seoul-based LB Asset Management Co., the Maeil Business Newspaper reported on August 18. KB plans to sell down about half of the investment to domestic institutional investors, a move that is expected to generate a rental yield of 7-8% per annum.

The South Korean brokerage firm will also take out senior loans from domestic banks with operations in Europe to fund the remainder of the acquisition cost.

Korean institutional investors have restarted cross-border investment, which had been suspended due to the spreading coronavirus. To do so, they have relaxed due diligence, replacing on-site visits with video conferences and drone pictures, or postponed due diligence until after completion of the investment.

Last month, Seoul-based IGIS Asset Management Co. joined forces with Australia’s real estate investment firm Cromwell Property Group to buy seven logistics centers in Italy for 52.5 million euros ($62.5 million), according to investment banking sources.

The portfolio of the seven distribution centers are leased to DHL, Germany’s shipping and delivery services company. This will be the first investment by Cromwell’s new European logistics fund, which is seeking to raise 500 million euros. Its remaining lease term is 16 years on average.

Logistics centers have been attracting Korean institutional investors. In particular, the facilities leased to Amazon have been among the most sought-after targets.

Last year, IGIS Asset acquired three logistics centers leased to Amazon in Paris, Barcelona and Bristol for a combined 595 billion won ($502 million).

Early this year, NH Investment & Securities Co. took a 50.1% stake in an Amazon distribution center in Japan for around 150 billion won ($130 million) in a joint purchase with US-based Nuveen Real Estate.

Yeonhee Kim edited this article

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