T8 building in Frankfurt, Germany. [Photo by Mirae Asset Global Investments Co.]
South Korea’s leading asset manager Mirae Asset Global Investments Co. has cashed out of a German office building it bought two years ago, earning 120 million euros ($134.6 million) from the investment.
The Korean company said Monday it signed a deal to sell the Taunusanlage 8, a 17-story office building located in the heart of the banking district in Frankfurt am Main, Germany, for 400 million euros.
It is expected to pocket 120 million euros from the investment. It had acquired the building in August 2017 for 280 million euros through a private equity real estate fund.
Its annual return rate is estimated to reach 25 percent when including the mid-7 percent range dividend it gained over the last two years. The fund was set to expire in October 2022 but Mirae Asset decided to make an early sale upon receiving a favorable bid from a creditable buyer.
The Taunusanlage 8 had been two-thirds vacant when Mirae Asset first joined the competitive tender for the office building against German investors. While the Korean company did not offer the highest price, it was able to clinch the deal, having won the credibility of the German market following its investment in the Cologne City Hall in 2016.
Mirae Asset sought both stability and profitability by securing a three-year guaranteed rent arrangement with the seller to receive a fixed rental income even for vacancies. Within a year, it drove up the occupancy rate to 99 percent and the building now houses a number of reputable tenants, including the global law firm Linklaters, the office-sharing giant WeWork and the mutual insurance company FM Global.
Mirae Asset is Korea’s largest player in alternative investments. It has made a series of high-profile acquisitions, starting with the Mirae Asset Tower in Shanghai, China at the core of the Pudong Lujiazui finance and trade zone. It is also the owner of the hotel chains Four Seasons in Sydney and Korea, and Fairmont Orchid in Hawaii and San Francisco. Its headquarters, the two-tower Mirae Asset Center 1 Building, in central Seoul has established itself as a city landmark.
By Kim Je-lim and Kim Hyo-jin
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]