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Pension funds

NPS, LaSalle jointly buy UBS Group London HQ for £1.3 bn

The pension fund is expanding its global real estate portfolio, including Goldman Sachs' European HQ

By Dec 06, 2021 (Gmt+09:00)

UBS Group AG's London headquarters
UBS Group AG's London headquarters

South Korea’s National Pension Service (NPS) and global real estate investment firm LaSalle Investment Management Inc. have agreed to acquire UBS Group AG’s London headquarters for £1.3 billion ($1.7 billion).

The building is currently owned by Hong Kong-based asset manager CK Asset Holdings Ltd., which acquired it for £1 billion in 2018. CK Asset reportedly decided to sell off the building early this year and has been in discussions with potential buyers since then. The asset manager is run by Victor Li, Hong Kong conglomerate CK Hutchison Holdings founder Li Ka-shing’s son.  

As one of the 59 asset managers NPS has hired for real estate investment, LaSalle acquired Goldman Sachs’ European headquarters in London in 2018 for £1.2 billion on behalf of the Korean pension fund. Marking its single biggest investment in overseas real estate, NPS was picked as the preferred buyer of the Goldman Sachs building, beating the other two shortlisted bidders CK Asset Management and Spanish property Pontegadea Inversiones SL.

The Korean pension fund also bought HSBC’s London headquarters for £772.5 million in 2009 and sold it to Qatar Investment Authority, making 960 billion won ($811.5 million) in profit, in 2014. Also, NPS and global asset manager Investco LLC jointly acquired Helmsley Building in Manhattan, New York for reportedly around $770 million in 2011 and sold it to US real estate asset manager RXR realty for $1.2 billion in 2015.  

In November of this year, NPS and global real estate investment manager Tishman Speyer Properties LP announced they had created NPS-Tishman Speyer Thematic Platform, a $1.5 billion separately managed fund focusing on US real estate assets. With NPS as the anchor investor in the platform, the partnership targets affordable housing in supply-constrained neighborhoods, especially in lagging or suburban areas in the US.

The pension fund and global real estate investor Hines set up a $1.5 billion joint venture for a build-to-core portfolio at the end of 2020 and acquired the headquarters complex of Pacific Gas & Electric Company (PG&E) in San Francisco for $800 million in September of this year.

NPS added New York-based private equity firm Warburg Pincus LLC to its pool of 58 global real estate investment managers in the third quarter of this year. With 918.7 trillion won of total assets under management as of the end-third quarter, the world's third-largest pension fund allocates 34.7 trillion won to real estate investment. Overseas real estate accounts for 79.7% of its real estate portfolio.

Write to Jong-woo Kim at jongwoo@hankyung.com

Jihyun Kim edited this article.
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