CPPIB makes first Korean investment

The Canadian pension plan has purchased a 50 percent stake in Samsung SRA’s fourth real estate fund, investing $116 million in a Seoul office development.

The Canada Pension Plan Investment Board (CPPIB) has acquired a 50 percent interest in the Samsung SRA Private Real Estate Investment Fund IV for an equity commitment of KRW 126 billion ($116 million).

Fund IV is a single-asset vehicle run by the asset management subsidiary of Samsung Life Insurance. The development site comprising that fund is located at 7-13 Sincheon-Dong in Jamsil, a growing submarket near the Gangnam business district in Seoul. Upon completion, which is scheduled for May 2014, the property will serve as the headquarters of Samsung SDS, South Korea's largest IT services company, which has pre-leased the entire building. The finished Class A office will comprise 30 floors with a gross leasable area of approximately 1.1 million square feet, including underground parking.

The commitment represents the C$188.9 billion pension plan’s first real estate transaction in South Korea. “We see this investment as an attractive entry point into the Korean market,” said Graeme Eadie, senior vice president and head of real estate investments of CPPIB, in a statement. “As Asia's fourth largest economy, South Korea is a key market with stable long-term growth prospects.”

CPPIB has been making big strides to expand its Asian real estate portfolio this year, namely by increasing its joint venture in China with the Goodman Group by $500 million last month and by upping its joint venture in Japan with Global Logistic Properties to $1.132 billion in February.