Deals

Korea elects Rockspring for London leg of $3bn spree

The $200bn National Pension Service of Korea has mandated London-based Rockspring to buy London assets as part of a $3bn investment programme aimed the mature markets of London, New York and Sydney.

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The National Pension Service of Korea (NPS) has continued to expand its real estate investment strategy by awarding an investment mandate to London-based Rockspring Property Investment Managers to purchase assets in the capital city.

Rockspring will invest in individual lot sizes of £150 million ($245 million; €172 million) or more as part of a wider plan by NPS to invest $3 billion in London, New York and Sydney this year.

According to an announcement by Rockspring today, the firm is to invest in “typically prime landmark assets” located from the West End to the City, which benefit from long leases with strong tenants in the office and retail sector.  Investments can be made using debt or without debt.

Robert Gilchrist, chief executive of Rockspring, said: “Given the level of equity available to the fund and its ability to be flexible on gearing for each transaction, we believe the fund will stand out as an attractive potential purchaser in a market that still has limited availability of debt.”

Rockspring’s mandate is the latest in a series of joint ventures formed by NPS to take advantage of attractive investment opportunities in mature markets thrown up by the current global economic downturn.

In July, for example, the pension fund teamed up with The Carlyle Group for the $362 million purchase of the KDX Toyosu Grandsquare office building in central Tokyo. It is understood that the two parties may invest together again in the future.

In addition, last year, NPS agreed a memorandum of understanding with The Blackstone Group to invest in its home country in sectors including real estate and infrastructure.

NPS is the fifth largest pension fund in the world. The pension fund was established in 1988 and has since grown its capital reserves to $200 billion. According to the announcement by Rockspring, with whom NPS was an investor in its TransEuropean IV real estate fund, the pension fund plans to grow its reserves to $440 billion by the end of 2012.

Rockspring currently manages approximately €4.7 billion of in assets and undrawn commitments. It has invested in the UK and 13 other European countries.