Shinhan REITS To Acquire HSBC’s Seoul Headquarters

The two parties are expected to finalise the transaction for the deal at the end of November

Shinhan REITs Management Co., a real estate investment arm of South Korea’s Shinhan Financial Group, is poised to acquire a 65.8% stake in the Seoul headquarters of the Hongkong and Shanghai Banking Corporation Ltd. (HSBC) at around 180 billion won ($134.9 million).

Seoul-based Kclavis Asset Management, which created a fund at the end of 2019 for the stake in the property, selected Shinhan REITs as the preferred bidder, sources said. The two parties are expected to finalise the transaction for the deal at the end of November, when the fund matures, according to sources. Kclavis has picked S-1 Corp., Samsung Group’s real estate security and management affiliate, and Jones Lang LaSalle (JLL) as financial advisors for the deal. The bidders included overseas investment firms, real estate investment trust management companies and real estate fund managers, sources said.

Constructed in 1992, the building has 19 stories above ground and six underground, with 37,708 square meters of gross floor area. The property is near the Korea Chamber of Commerce and Industry (KCCI) office and is located between City Hall and Seoul Station.

The deal covers the higher stories of the building, from the ninth to 19th floors measured at 25,000 square meters. HSBC owns the rest of the building for the Seoul business operation and also for leasing out to a pension service unit of state-run Industrial Bank of Korea (IBK). The lease rate is 100% as of August.

Kclavis acquired the stake at 150 billion won from local investment firm Pebblestone Asset Management Co. in December 2019. Prain Global Inc., a Korean public relations agency, was among the major limited partners at the time.