The securities firm pays $170 million for the building joining the rush by the Korean brokerage firms to invest in real estate and infrastructure abroad to make up for slowdown in equity market at home
Korea Investment & Securities Co. purchased a skyscraper in Belgium for 210 billion won ($170 million), joining the rush of Korean brokerages into overseas alternative investments like real estate and infrastructure amid falling profits in their traditional equity investments.
Korea Investment & Securities and FG Asset Management inked a deal last year to buy the Astro Tower in Brussels, Belgium, marking the first-ever investment in Belgium-based property by a South Korean institutional investor. Korea Investment & Securities is said to be preparing to invest half of the funds using its own capital while raising the other half through loans. The investment is expected to generate a stable return of 6 percent to 7 percent per annum, according to financial sources.
The Astro Tower, built in 1976, is located in the northeast of Brussels. The tower that has been under extensive remodeling will reopen around July to be 107 meters tall, one of the tallest buildings in the country. The tower is situated nearby subway stations in a busy district.
After the completion of the refurbishment, Korea Investment & Securities is known to be considering reselling its stakes in the skyscraper to local institutional investors like public funds. It is reported that negotiations are currently underway with potential buyers.
Korea Investment & Securities has been expanding its investments into overseas real estate since late last year in a move to seek new investment sources.
It partnered with the nation’s asset management firms to purchase overseas buildings including Louisa Lawson Building in Canberra, Australia (about 207 billion won); a tax office building in Philadelphia, the U.S. (about 400 billion won); and Amazon’s logistics center in Poland (about 93 billion won). The total acquisition value is estimated at 900 billion won.
Korea Investment & Securities Co., Ltd. was re-formed in June 2005 when the company was merged with Dongwon Securities. Before the merger, Korea Investment & Securities Co., Ltd. (KITC) was Korea's leading distributor of investment trust products, mainly those of its wholly owned subsidiary; Dongwon Securities was one of Korea's main securities brokerages.
Both of these companies previously played important roles in the development of the Korean capital market and the Korean economy.
KITC was a major institutional investors specializing in asset management and sales of Korean funds, while Dongwon Securities was a specialist in securities brokerage, investment banking and derivatives trading.
KITC was originally launched in 1974 as the first investment trust company in Korea.
As a leader of the investment trust industry and a major institutional investor specializing in asset management, KITC helped customers to manage their assets effectively and made a great contribution to the development of the Korean capital market and economy. Dongwon Securities was established in 1968 and as a member of the Dongwon Group had also played a part in developing the Korean securities markets and the national economy by providing differentiated services and securing global competitiveness.
Since the merger, Korea Investment & Securities has become a major financial firm within Korea Investment Holdings and has secured first position in Korea for initial public offerings (IPOs). The new company is now one of the major securities firm in Korea with 92 branch offices, six overseas corporations, two overseas offices and 2,390 employees.
The new Korea Investment & Securities aims to win the trust of customers, create significant synergy effects by nurturing corporate financing and asset management, and further consolidating its already sound financial structure, it says. Through these achievements, Korea Investment & Securities aims to become a representative merchant bank in Korea and one of Asia's leading financial institutions.
A view of Astro Tower in Brussels, Belgium, which KIS bought last year for $170 million.(Photos: KIS)
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