KB Asset buys Belgian office towers for $654 million

KB Asset Management Co., the investment arm of KB Financial Group in South Korea, said on Friday it has completed a 100% acquisition of North Galaxy Towers in Brussels from Denmark's ATP Real Estate. The Danish investment manager is the property unit of Denmark’s largest pension fund ATP, which manages around $119.6 billion in assets.

The deal reached €630 million ($653.9 million), marking the biggest single real estate transaction in the Danish pension fund’s history. ATP bought the tower complex for €475 million in 2014 via its joint venture with AXA Belgium.

For the acquisition, KB injected 400 billion won ($311.6 million) in addition to the loan from the local banks, the Korean asset manager stated.

The tower complex comprises twin 28-story towers and a smaller six-story building in the Northern Quarter business district of Brussels. The main tenants are some branches of the Belgian Ministry of Finance and other Belgian government organizations.

KB has acquired a 100% stake in the tower complex via its private real estate investment trust (REIT) subsidiary. The asset manager is planning to hold pre-IPO funding round for the REIT in July.

With the capital raised in the pre-IPO, KB will acquire Samsung Electronics Co.’s London headquarters through the REIT and push for its listing. Dubbed KB Star Global REIT, it will be the first public REIT of the asset manager.

KB Start Global REIT is set to reach 500 billion won. It is aimed to invest 90% of the fund in North Galaxy Towers and the remaining 10% in Samsung Electronics' London headquarters. The two assets have 10 and 15 years of remaining rental periods, respectively.

As the lease agreement bans termination for convenience, the two properties are expected to generate stable dividends, KB said. Also, the lease can reflect price hikes through yearly negotiations with tenants, KB added.

Write to Tae-Hoon Lee at beje@hankyung.com
Jihyun Kim edited this article.