Korean pension fund completes A$685m Australia buy

Having declared its intent to invest heavily in major international city offices in September last year, Korea’s largest pension fund has reportedly continued its spending program with a large outlay for an office in Sydney.

The National Pension Service (NPS), Korea’s $200 billion pension fund, has continued its investment strategy of directly buying large offices in major international cities with the A$685 million ($626 million; €436 million) purchase of Sydney’s Aurora Place.
The pension fund stated in September that it would purchase assets on a direct basis, through one-off deals or on a separate account basis, in Sydney as well as in London, New York and Tokyo.

According to a report by Bloomberg, NPS signed an agreement to acquire the 44-story Sydney Harbour office from the Commonwealth Property Investment Trust, a fund managed by Colonial First State Global Asset Management, last week. The fund had owned the building since 2000.

Quoting an agent from Richard Ellis, the report said the transaction was the largest in the Australian real estate market since December 2007.

NPS, which was formed in 1988 to provide pensions for Korea’s private sector and the self-employed, is expected to make further sizeable acquisitions this year. Since formulating the strategy, it has spent heavily in London already, including the £772 million ($1.29 billion; €863 million) acquisition of HSBC’s London headquarters in Canary Wharf. It has also hired London-based Rockspring to source further purchases on a separate account basis.

The pension fund also teamed up with The Carlyle Group to buy the KDX Toyosu Grandsquare office for $362 million from Tokyo-based Kenedix.