Morgan Stanley will buy a Seoul office building from South Korea’s Daewoo Engineering and Construction Co for US$1 billion in the Wall Street bank’s latest big deal in the booming Asian property market.
Morgan Stanley has joined a slew of foreign investors buying Asian property assets, which are yielding stable returns on the back of tight supply in a region which has been chalking up blistering economic growth.
The US bank said in June it has raised the biggest property fund ever, an US$8 billion warchest, and earmarked 60 per cent of the money for Asian deals, including Japan, China and India.
In South Korea’s biggest deal for a single office building, Morgan Stanley’s real estate investment fund, AHI Holding BV, has signed a 960 billion won (S$1.58 billion) contract with Daewoo, the South Korean builder said yesterday.
According to property service firm Jones Lang LaSalle, South Korean office building prices rose 20-25 per cent in the past year.
The former head office of the now-defunct Daewoo Group has been up for sale by the new owner of Daewoo Engineering, Kumho Asiana Group, to pay down debt and improve financial conditions of the builder.
The property fund beat other bidders including Australia’s Macquarie Bank Ltd and South Korea’s Kookmin Bank in the race for the Daewoo building, located in the heart of downtown Seoul.
Morgan Stanley’s recent big deals include the US$3.9 billion acquisition of Australia’s Investa Properties Ltd in May and the US$2.4 billion purchase of hotels and two property management units from Japanese airline All Nippon Airways in April.
An analyst of a foreign property advisory firm said conditions in South Korea’s commercial buildings market will continue to favour owners over the next two to three years, because of limited supply and lower vacancy ratios.
‘Limited supply will continue until 2010 before supply turns up, now that construction companies started building office buildings,’ he said, asking not to be named.
The Government of Singapore Investment Corp (GIC) broke ground for Korean property investment as an institutional investor, when it bought Seoul Finance Center for 355 billion won in 2000.
Now the building, located in the capital’s financial hub, houses a number of global banks and brokerages in central Seoul, including Merrill Lynch and asset manager Fidelity.
GIC also bought Star Tower building from US private equity house Lone Star for a reported 900 billion won in 2004. Morgan Stanley could not immediately be reached for comment.
Land prices in Seoul and its outskirts on average have risen 15-20 per cent a year over the past three years, according to construction ministry data.
Source: The Business Times, 10 July 2007
Showing posts with label Morgan Stanley Real Estate. Show all posts
Showing posts with label Morgan Stanley Real Estate. Show all posts
Thursday, July 12, 2007
Morgan Stanley set a record for real estate purchases in South Korea with its agreement to buy Daewoo Engineering & Construction Co’s Seoul HO
Morgan Stanley set a record for real estate purchases in South Korea with its agreement to buy Daewoo Engineering & Construction Co’s Seoul head office for 960 billion won (S$1.58 billion), brokers said.
The Government of Singapore Investment Corp (GIC) set the previous record in December 2004 by paying about 880 billion won to buy Star Tower in Seoul from Dallas-based Lone Star Funds, said Steven Craig, from Jones Lang LaSalle Inc, the world’s second-largest commercial real estate broker.
The purchase extends a global acquisition spree in which Morgan Stanley has bought offices, hotels and residences. Morgan Stanley, the biggest real estate investor among Wall Street banks, is buying into a market where demand for office space is likely to outstrip supply for the next three years, driving up rents.
‘Rent escalation for office buildings in Seoul has been 3 per cent to 5 per cent per annum for more than five years, and we expect it to continue,’ said Sean Kim, associate director of Colliers International’s Korea office, in a telephone interview.
The price per square metre paid for the Daewoo building is about 75 per cent higher than that paid for the Star Tower, according to local real estate brokers. At 23 storeys and 132,560 square metres, the Daewoo building is roughly half the size of the 45-storey Star Tower, which has 212,500 square metres.Morgan Stanley is paying about 24 million won per pyung, compared with the 13.7 million won per pyung that GIC Real Estate paid for Star Tower, said Mr Craig at Jones Lang LaSalle. One pyung equals 3.3 square metres.
‘One wonders what Star Tower would go for if it came back onto the market today,’ Mr Craig, a Seoul-based member of Jones Lang LaSalle’s investment sales department, said via e-mail. ‘With market vacancy touching 1.3 per cent, it would definitely be a lot more than US$1 billion.’
Mr Craig said the price Morgan Stanley is paying excludes a reserve for capital expenditures to refurbish the Daewoo building. ‘It will be a very substantial number because a very large renovation programme is required,’ he said.
Morgan Stanley spokeswoman Alyson D’Ambrisi didn’t immediately respond to a request for comment placed after regular New York business hours. Lay Choon Mah, a spokeswoman for GIC Real Estate, declined to comment.
JPMorgan Chase & Co arranged the transaction for seller Daewoo Engineering.
Source: The Business Times, 12 July 2007
The Government of Singapore Investment Corp (GIC) set the previous record in December 2004 by paying about 880 billion won to buy Star Tower in Seoul from Dallas-based Lone Star Funds, said Steven Craig, from Jones Lang LaSalle Inc, the world’s second-largest commercial real estate broker.
The purchase extends a global acquisition spree in which Morgan Stanley has bought offices, hotels and residences. Morgan Stanley, the biggest real estate investor among Wall Street banks, is buying into a market where demand for office space is likely to outstrip supply for the next three years, driving up rents.
‘Rent escalation for office buildings in Seoul has been 3 per cent to 5 per cent per annum for more than five years, and we expect it to continue,’ said Sean Kim, associate director of Colliers International’s Korea office, in a telephone interview.
The price per square metre paid for the Daewoo building is about 75 per cent higher than that paid for the Star Tower, according to local real estate brokers. At 23 storeys and 132,560 square metres, the Daewoo building is roughly half the size of the 45-storey Star Tower, which has 212,500 square metres.Morgan Stanley is paying about 24 million won per pyung, compared with the 13.7 million won per pyung that GIC Real Estate paid for Star Tower, said Mr Craig at Jones Lang LaSalle. One pyung equals 3.3 square metres.
‘One wonders what Star Tower would go for if it came back onto the market today,’ Mr Craig, a Seoul-based member of Jones Lang LaSalle’s investment sales department, said via e-mail. ‘With market vacancy touching 1.3 per cent, it would definitely be a lot more than US$1 billion.’
Mr Craig said the price Morgan Stanley is paying excludes a reserve for capital expenditures to refurbish the Daewoo building. ‘It will be a very substantial number because a very large renovation programme is required,’ he said.
Morgan Stanley spokeswoman Alyson D’Ambrisi didn’t immediately respond to a request for comment placed after regular New York business hours. Lay Choon Mah, a spokeswoman for GIC Real Estate, declined to comment.
JPMorgan Chase & Co arranged the transaction for seller Daewoo Engineering.
Source: The Business Times, 12 July 2007
Friday, April 13, 2007
Morgan Stanley Real Estate to buy 13 ANA properties in Japan
Morgan Stanley Real Estate to buy 13 ANA properties in Japan
Apr 13, 2007
H&MM Week In Review
Singapore - April 13, 2007 - Jones Lang LaSalle Hotels ("Firm") as joint advisor to All Nippon Airways Co., Ltd ("ANA") is pleased to announce the JPY281.3 billion (approximately USD2.36 billion) sale of ANA's 13 owned and leased hotels in Japan ("Portfolio") to Morgan Stanley Real Estate Fund.
Said Mr Scott Hetherington, Managing Director of the Firm in Asia, who jointly led the transaction with Mr Tomohiko Sawayanagi, the Firm's Executive Vice President in Japan, "This is the largest hotel transaction in Asia Pacific and one of the biggest real estate sales the region has experienced. The sale underlines the strength of the region's capital markets and in particular, investors' desire for real estate in the world's second largest economy."
Mr Hetherington commented that global investors were approached for the Portfolio which has a total of approximately 5,000 rooms located throughout Japan and includes market leading properties such as the ANA-InterContinental Tokyo and its sister property on Manza Beach in Okinawa. "Through a highly competitive process, bids were received from investors not only in Japan but also from Asia and North America. The level of interest was reflective of the scarcity of opportunity to buy a portfolio of this size and the desire of international investors to consider hotel investments," Mr Hetherington added.
According to Mr Sawayanagi the sale is the culmination of four years' work by the Firm which started when ANA began to review whether hotels were a core business for the airline. "We were appointed to conduct a tender process to seek an international management company to form a joint venture with ANA to manage the 33 hotels it owned, leased and operated in Japan and internationally. Critical to the success of this joint venture was finding a partner who would not only provide career opportunities for the staff but also deliver international best practice, operational expertise and marketing to all the hotels. InterContinental Hotels Group were the successful party and on December 1, 2006, IHG ANA Hotels Group Japan was founded," Mr Sawayanagi said. Subsequently on the April 1, 2007 the ANA Hotel Tokyo was re-branded as the ANA-InterContinental Tokyo and over the coming months the remainder of the owned and leased hotels in the Portfolio will be re-branded under the ANA-InterContinental, ANA-Crowne Plaza and ANA-Holiday Inn flags. The Portfolio was offered for sale with the benefit of long term operating agreements with IHG ANA Hotels Group Japan. Mr Hetherington explained, "Historically the hotel investment market in Asia has been driven by owner operators but we have seen a profound change in this view over the past few years with investors being happy to acquire hotels which are encumbered by operating agreements that fairly share the risks and rewards between owners and operators." Mr Hetherington noted the sale by the Firm of the Swissotel Merchant Court and the Intercontinental Hotel in Singapore last year as further evidence of this trend. Mr Sawayanagi added, "The Portfolio presented a tremendous opportunity for the purchaser to work with the new operating joint venture to reposition and refurbish the hotels and to benefit from an ever strengthening domestic consumer market in Japan."
Apr 13, 2007
H&MM Week In Review
Singapore - April 13, 2007 - Jones Lang LaSalle Hotels ("Firm") as joint advisor to All Nippon Airways Co., Ltd ("ANA") is pleased to announce the JPY281.3 billion (approximately USD2.36 billion) sale of ANA's 13 owned and leased hotels in Japan ("Portfolio") to Morgan Stanley Real Estate Fund.
Said Mr Scott Hetherington, Managing Director of the Firm in Asia, who jointly led the transaction with Mr Tomohiko Sawayanagi, the Firm's Executive Vice President in Japan, "This is the largest hotel transaction in Asia Pacific and one of the biggest real estate sales the region has experienced. The sale underlines the strength of the region's capital markets and in particular, investors' desire for real estate in the world's second largest economy."
Mr Hetherington commented that global investors were approached for the Portfolio which has a total of approximately 5,000 rooms located throughout Japan and includes market leading properties such as the ANA-InterContinental Tokyo and its sister property on Manza Beach in Okinawa. "Through a highly competitive process, bids were received from investors not only in Japan but also from Asia and North America. The level of interest was reflective of the scarcity of opportunity to buy a portfolio of this size and the desire of international investors to consider hotel investments," Mr Hetherington added.
According to Mr Sawayanagi the sale is the culmination of four years' work by the Firm which started when ANA began to review whether hotels were a core business for the airline. "We were appointed to conduct a tender process to seek an international management company to form a joint venture with ANA to manage the 33 hotels it owned, leased and operated in Japan and internationally. Critical to the success of this joint venture was finding a partner who would not only provide career opportunities for the staff but also deliver international best practice, operational expertise and marketing to all the hotels. InterContinental Hotels Group were the successful party and on December 1, 2006, IHG ANA Hotels Group Japan was founded," Mr Sawayanagi said. Subsequently on the April 1, 2007 the ANA Hotel Tokyo was re-branded as the ANA-InterContinental Tokyo and over the coming months the remainder of the owned and leased hotels in the Portfolio will be re-branded under the ANA-InterContinental, ANA-Crowne Plaza and ANA-Holiday Inn flags. The Portfolio was offered for sale with the benefit of long term operating agreements with IHG ANA Hotels Group Japan. Mr Hetherington explained, "Historically the hotel investment market in Asia has been driven by owner operators but we have seen a profound change in this view over the past few years with investors being happy to acquire hotels which are encumbered by operating agreements that fairly share the risks and rewards between owners and operators." Mr Hetherington noted the sale by the Firm of the Swissotel Merchant Court and the Intercontinental Hotel in Singapore last year as further evidence of this trend. Mr Sawayanagi added, "The Portfolio presented a tremendous opportunity for the purchaser to work with the new operating joint venture to reposition and refurbish the hotels and to benefit from an ever strengthening domestic consumer market in Japan."
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