Korea Pension Fund to buy HSBC London HQ
Sunday, 15 November 2009
SEOUL, Nov 14 (Bloomberg): South Korea's National Pension Service, the nation's biggest investor, agreed to buy HSBC Holdings Plc's London headquarters for 772.5 million pounds ($1.29 billion) as the fund boosts overseas assets.
HSBC, Europe's largest bank by market value, will remain at 8 Canada Square, a 656-foot (200-meter) tower in the Canary Wharf financial district, following the sale to Seoul-based NPS, according to a statement yesterday. Officials at the South Korean fund were not available for comment.
The South Korea's state pension fund plans to double its international assets to 15 per cent of its total holdings by 2015, the fund said in July. This will include property acquisitions in the world's major cities, the fund said in a Nov 5 statement when it announced a 350-billion-won ($302 million) purchase of London office buildings.
"The London real-estate market has gone through a price correction since hitting the bottom in the first half of 2007 and profitability for investment has improved considerably," the fund said in the Nov 5 statement.
NPS had 270 trillion won of assets at the end of September, including 3.05 trillion won worth of real estate holdings as of end of August, according to its Web site.
Other sovereign wealth funds have bought commercial properties in London this year, taking advantage of lower prices and the pound's weakness. On Nov 4, Qatar agreed to purchase the US embassy building in Mayfair for an undisclosed amount, while in June a fund controlled by Oman acquired a majority stake in an office building valued at 445 million pounds.
The funds have focused on more expensive buildings on prime sites occupied by tenants with good credit ratings and long leases. The financial crisis has made it harder for real estate investors to obtain debt finance, particularly for larger, costlier properties.
HSBC, Europe's largest bank by market value, will remain at 8 Canada Square, a 656-foot (200-meter) tower in the Canary Wharf financial district, following the sale to Seoul-based NPS, according to a statement yesterday. Officials at the South Korean fund were not available for comment.
The South Korea's state pension fund plans to double its international assets to 15 per cent of its total holdings by 2015, the fund said in July. This will include property acquisitions in the world's major cities, the fund said in a Nov 5 statement when it announced a 350-billion-won ($302 million) purchase of London office buildings.
"The London real-estate market has gone through a price correction since hitting the bottom in the first half of 2007 and profitability for investment has improved considerably," the fund said in the Nov 5 statement.
NPS had 270 trillion won of assets at the end of September, including 3.05 trillion won worth of real estate holdings as of end of August, according to its Web site.
Other sovereign wealth funds have bought commercial properties in London this year, taking advantage of lower prices and the pound's weakness. On Nov 4, Qatar agreed to purchase the US embassy building in Mayfair for an undisclosed amount, while in June a fund controlled by Oman acquired a majority stake in an office building valued at 445 million pounds.
The funds have focused on more expensive buildings on prime sites occupied by tenants with good credit ratings and long leases. The financial crisis has made it harder for real estate investors to obtain debt finance, particularly for larger, costlier properties.