Actis sells South Korean commercial property, Young City21/05/20

Actis, a leading investor of private capital into global emerging markets today announces it has  sold Young City, a grade-A twin tower office building located in southwest of Seoul, Korea to a consortium of local institutional investors.  The deal followed a competitive bidding process involving nearly 50 interested parties and 17 bids.  The sale price is, c. US$ 447.4Mn /KRW 545.8 Bn or KRW c.5.5Mn/m2.  This is the third exit from the Actis Asia Real Estate fund, following the 2018 acquisition of Standard Chartered’s Principal Finance Real Estate business in Asia. 

In 2016, Actis identified a brownfield site, located in a former textile industrial zone, with significant potential for transformation due to its strategic location in Seoul.  Today, the area has become an attractive commercial and residential property district.  As a first mover in this transition, Young City has become the landmark office building in the area and exemplifies Actis’ build to core strategy, which is to create core assets that will appeal to both occupiers and institutional investors seeking quality cash flows, both domestically and internationally.

With a deep understanding of the location’s strategic benefit, close to the major business districts, Actis anticipated a demand for grade-A quality, cost effective, back office space. Young City now offers highly attractive rents relative to other developments in the three well-established major business districts, namely Central Business District (CBD), Gangnam Business District (GBD), and Yeoui Business District (YBD). 

Young City has secured Citibank, SK Telecom and Samsung affiliates as anchor tenants. The office building is currently c. 98% occupied.

Actis partnered with SK D&D a major local developer and a subsidiary of the third largest Korean conglomerate (SK Group). 

Asian real estate is a compelling investment opportunity with scale and supported by secular tailwinds: demographic shifts, digital disruption, deficient supply, and demand for yield.

Brian Chinappi, Head of Actis’ Asian Real Estate activities commented: ”Actis’ build to core strategy continues to capitalise on the mismatch between the demand and the quality and affordability of existing supply. Our local teams are able to spot where this demand is not being met and deliver the desired product at an affordable price and thereby create an attractive core asset.”