M&G makes first Retail Acquisition in South Korea

Posted on 16 August, 2015 by Jodee Redmond

M&G Real Estate has made its first retail acquisition in South Korea by purchasing three assets at a combined value of US $230 million (£147.3m). The acquisition, which represents an average yield of 6.5 per cent, was managed by Singapore-based Erie Spratt.


Under the deal’s terms, M&G is now the owner of two hypermarkets. The first is located in Daejeon, South Korea’s fifth largest city and the second is in Jeju, the capital of Jeju Province and the nation’s leading tourist destination.

The third asset acquired under the deal is an outlet mall in Incheon City, the country’s third largest urban centre after Seoul and Busan. All three assets are highly sought after retail outlets in prime locations and are currently leased to South Korea’s largest retailer Lotte Shopping.

Hyesik Ryu, M&G Real Estate’s Managing Director for Korea, said, “We were one of the first non-domestic institutional investors to invest in South Korea when we bought into the country’s commercial office sector in 2004.

“M&G Real Estate has developed a deep understanding of the market, enabling us to make this latest investment in the retail sector, which will strengthen the strategy’s long term income stream.”

Stefan Cornelissen, M&G’s head of institutional business, Benelux, Nordics and Switzerland, says: “The Asia Pacific real estate market is now the second largest in the world and rivals the US and Europe in terms of its maturity, transparency and liquidity.

“European investors in search of diversification can now benefit from Asia’s strong economic growth and attractive long term returns without growing higher up the risk curve.

“We have recently had a significant commitment from Dutch investor, Blue Sky Group, which has invested on behalf of its recently launched Core Asia Pacific Fund.

“We expect further capital to follow from other UK and European investors. Asian real estate has come of age and is earning itself a strategic place in a diversified core real estate portfolio.

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