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Real estate

NPS acquires $2 bn US logistics portfolio with Stockbridge

Dec 04, 2020 (Gmt+09:00)

NPS acquires  bn US logistics portfolio with Stockbridge

The National Pension Service has teamed up with the US-based Stockbridge Capital Group to acquire a $2 billion portfolio of logistics facilities in the US, in the largest industrial property transaction by value since the coronavirus struck.

The portfolio is comprised of Class A logistics centers across the US with 14.3 million square feet, including recently completed and soon-to-be-completed properties. They are under long-term leases to major e-commerce tenants, Stockbridge said on Dec. 3.

For the transaction, they formed a joint venture and brought in an additional institutional investor. Further details such as the seller and the financial terms were not disclosed.

“This is an extraordinary-quality core portfolio considering its modern construction, high-credit and e-commerce tenant base, and long-term leases,” Nicole Stagnaro, Stockbridge's managing director, said in a statement. 

With 2020 the average year built the facilities adopted high technology to be designed to meet the demand for faster e-commerce delivery.

“This acquisition will be an excellent addition to our real estate portfolio. Additionally, our local presence in New York has allowed us to quickly underwrite the portfolio and manage partner relationships to successfully form this venture,” Scott Kim, head of NPS' real estate investment division, said in the statement.

PGIM Real Estate Finance and Nuveen Real Estate provided debt financing for the transaction.

The latest deal marked the second joint investment between NPS and Stockbridge since they acquired an 8.7 million-square-foot logistics facility in the US in November 2019.

Stockbridge is a San Francisco-based real estate investment firm, with $18.4 billion of assets under management.

As the coronavirus pandemic drove e-commerce growth even higher, South Korea’s boutique asset manager Vestas Investment Management Co. recently pooled 300 billion won ($272 million) from four pension and retirement funds in the country to launch a Europe-focused logistics fund.

Mirae Asset Global Investments Co., Hana Alternative Asset Management Co. and IGIS Asset Management Co. have also invested in logistics centers in the US and Europe, along with the Korean Teachers’ Credit Union and other Korean institutional investors.

By contrast, NPS is struggling to exit from a portfolio of 10 discount stores in South Korea due to cooled interest in offline stores. NPS invested 195 billion won in the portfolio through a domestic real estate investment trust in 2006.

Meanwhile, NPS reported a provisional 4.17% return on investment this year as of the end of September, down from 5.07% posted as of the end of August. Domestic equities and global fixed-income led the gains, driven by interest rate declines on the back of expansionary fiscal policies.

With 785.4 trillion won ($724 billion), NPS plans to boost alternatives investments to 15% of its total assets by 2025 from the current 12%.

Write to Jung-hwan Hwang at jung@hankyung.com

Yeonhee Kim edited this article.

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