IGIS, KKR to buy Shinhan Investment HQ for $487 mn

A consortium led by South Korea’s IGIS Asset Management Co. and US private equity giant KKR & Co. is set to acquire Shinhan Investment Corp. headquarters in Yeouido, Seoul for 639.5 billion won ($487.2 million).   

Shinhan Investment, the securities unit of Shinhan Financial Group in Korea, said on Monday it has signed an agreement to sell the property and will complete the sale process by end-July. The securities firm will rent the property for a while via sale and leaseback, given the tight office supplies in the Yeouido Business District (YBD), Seoul’s financial hub.    

The headquarters was built in May 1995 by Korea’s Ssangyong Engineering & Construction Co. The property has 30 floors above ground and seven underground, with 70,169 square meters of gross floor area.

The property was originally used by now-defunct Ssangyong Investment & Securities Co., which was acquired by US venture investment firm H&Q and was renamed Good Morning Securities in 1998. Shinhan Financial Group bought Good Morning Securities in 2002 and has used the property since then. The building was rebranded as Shinhan Investment headquarters in 2009. 

The property’s sale price is 3.6 times its 180 billion won book value. As the whole capital gain via the sale will add to Shinhan Investment’s capital, the securities firm’s capital on a consolidated basis is forecasted to increase from 5.02 trillion won as of end-March to the mid-5 trillion won range. 

Based on the capital gain, Shinhan Investment will boost profits from investment banking, retail banking, wealth management and digital financial services and invest in the firm’s future growth engines.

IGIS and KKR have tied up for real estate investment in Korea. The two firms are setting up a 50:50 joint venture in Seoul during the second half of this year, which will be the first JV between a Korean real estate firm and an overseas investment manager. IGIS will spin off its Value-add Investment Part to found the JV. 

Write to Seok-Cheol Choi at dolsoi@hankyung.com
Jihyun Kim edited this article.