Korea Post speeds up real assets allocation with $300 million of investments
Korea Post has hired US private equity giant Blackstone and UK real estate investment firm Tristan Capital Partners for its €200 million (US$228.96 million) real estate mandate focusing on developed markets in Europe.
The government postal agency announced the appointment in a statement on February 3. As proposed, the investment is structured as an open-ended commingled fund, and adopts core and core-plus strategies.
It has been Korea Post’s second real estate tender in less than a year. The agency appointed Korean firm KDB Infrastructure Investment Asset Management for a 100 billion won ($83.83 million) domestic logistics real estate fund mandate in November, part of ambitions to add more alternative assets in general.
The latest moves are in line with the growing investment opportunities in certain markets within the segment.
“The Greater Seoul logistics market will continue to see rental growth this year, supported by strong leasing demand and the addition of new prime assets. Large e-commerce and 3PL players will remain the primary sources of demand,” according to a CBRE Korea research team.
"Especially in the Grade A logistics market, we will see rental growth this year, which is expected to increase 2% year-on-year at least," the real estate data firm told AsianInvestor.
Another report published by Knight Frank also noted that all real estate sectors across Europe are set to see increased cross-border investor interest.
With the office investment market lively and 2022 expected to be a bumper year for activity, the highest demand is expected from income-focused investment managers and institutions within Europe targeting the UK, Germany, France, and the Netherlands. .
The research house also expects the residential sector to shine across the investor spectrum.
Korea Post manages about 130 trillion won ($108.7 billion) of assets, with real assets accounting for about 5% of the portfolio.
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While Korea Post began its alternatives journey years ago, it has only recently begun to seriously ramp up its exposure to property. In January last year, the fund said it wanted to add $4 billion of real asset exposure by 2025, mostly overseas and in debt deals via mid-cap fund managers, head of global real assets Lee Jinho told AsianInvestor during an online event.
He noted at that time “the plan is to grow our international investment portfolio steadily but as 2020 was abnormal [because of Covid-19 travel restrictions], we were more focused on domestic investments.”
Over the past three years, Korea Post has committed $700 million to six US infrastructure funds; $400 million for the savings unit and $300 million for the $50 billion insurance arm. That includes $200 million that the savings arm will hand to two US infrastructure specialists – Argo and Stonepeak – that it picked in December 2021 to manage mid-market core-type equity strategies.
Lee also told AsianInvestor in last September that by early 2022, the investment arm of Korea Post is to set up a separately managed account (SMA) for real estate debt so it can make more timely and competitive investment decisions in the crowded property markets in the US, Europe and Australia.
ALSO READ: Korea Post Savings to double real asset allocation to 10%