Amidst the possibility of military conflict with North Korea, the Employees Provident Fund (EPF) has cancelled the purchase of a stake in an office building in Seoul, South Korea for around 150 billion won (RM564.46 million), reported The Korea Economic Daily.
The Malaysian state fund was supposed to be a part of a consortium led by South Korea’s Pebblestone Asset Management Co that would purchase the Metro Tower for a total of 240 billion won (RM903.14 million) after the party was chosen as the buyer in June.
The group had already completed the due diligence and legal reviews of the purchase. But it temporarily stopped the deal after North Korea conducted a test for an intercontinental ballistic missile in July.
Consequently, EPF backed out in the last stage of negotiations and delayed its plan to invest a total of 500 billion won (RM1.88 billion) in South Korean properties this year.
It has also set back Angelo, Gordon & Co’s sale of the building spanning 39,908 sqm after it bought it from South Korean builder GS E&C Corporation in 2013. The property’s current major tenants include Allianz Life Insurance, Lotte Non-Life Insurance and South Korea’s Ministry of Strategy and Finance.
The New York-based firm had initially picked another South Korean asset manager as the preferred bidder. But it scrapped talks with the firm as it was unable to attract local institutional investors to support the purchase.
Meanwhile, the EPF has recently closed an investment in a South Korean warehouse via local firm ADF Asset Management for about 30 billion won (RM112.89 million).
Notably, the fund has selected ADF, Pebblestone and IGIS Asset Management to carry out its 500 billion won (RM1.88 billion) worth of investments in South Korean properties in 2017.
Image sourced from Rojak Daily
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