Korea’s POBA to invest $322 million in German property

15 August 2014   Category: News, Asia, Global, Korea, Europe, Germany, Canada   By Daniel Shane

Korea’s Public Officials Benefit Association (POBA), the pension manager with 6 trillion won (US$4.65 billion) in assets, is to invest approximately $322 million into prime German real estate via a Canadian REIT.

The long-term joint venture with Toronto-based Dream Global REIT will see POBA acquire a 50% interest in seven properties owned by the former. The properties are: ABC Bogen in Hamburg; Löwenkontor in Berlin; Werfthaus and K26 in Frankfurt; doubleU in Düsseldorf; Z-Up in Stuttgart, and Marsstrasse 20-22 in Munich.

The deal is expected to close in stages through the third and fourth quarters of this year. Dream Global REIT said that it would reinvest the net proceeds from the transaction into high-quality office properties in its target markets.

"This strategic joint venture and significant acquisition of a high quality office portfolio in Germany allows us to expand into one of the most highly sought-after real estate markets in the world. With Dream, we have found a partner on the ground who is not only an experienced owner and operator of real estate but also understands our unique requirements," commented Eunghan Park, executive managing director of POBA, in a statement.

Jane Gavan, president and chief executive officer of Dream Global REIT, added: “This joint venture offers us the opportunity to diversify our sources of capital, to leverage our REIT operating platform by generating joint venture management income and to continue to take advantage of the attractive investment environment.”

Founded in 1975, POBA has grown from around 79,000 members to more than 235,000 last year. Its investment portfolio includes commercial real estate assets in England, China and Brazil.