ARA Asset Management Ltd., a property management company part-owned by billionaire Li Ka-shing, agreed to take over the Korean property operations of Macquarie Group Ltd. to expand into the north Asian nation.
ARA plans to buy Macquarie Real Estate Korea Ltd., which manages 588.4 billion won ($555 million) of properties in two privately held property trusts, the Singapore-based company said in a regulatory filing without disclosing a price. ARA will also buy a 10.02 percent equity stake in one of the REITs, it said.
“The acquisition of this platform adds to ARA’s current REITs platform and bolsters ARA’s REIT management presence in the Asia-Pacific region,” ARA Chief Executive Officer John Lim wrote in the statement. It enables the company “to capitalize on the tremendous real estate opportunities in Asia’s fourth largest economy.”
ARA is seeking to double assets under management over five years, focusing on retail and office properties, after attracting U.S. pension investors. South Korea’s growth is poised to accelerate to the fastest pace since 2010 next year, driven by improvement in Seoul and in mid and southwest areas of the country, the Bank of Korea said last month.
Macquarie hasn’t made a statement about the transaction, Fiona McDonald, a Hong Kong-based spokeswoman said in a telephone message.
ARA’s equity stake will make it an investor alongside one of Korea’s largest pension funds, which is also the sole investor in the second REIT, the company said in today’s statement. One of the two trusts, the Macquarie NPS REIT, is a single account mandate with the National Pension Service of Korea, according to Macquarie briefing documents.
ARA shares were unchanged at S$1.85 as of 10:44 a.m. in Singapore. Macquarie shares fell 0.4 percent to A$54.60 in Sydney.
Li is Asia’s richest man with a net worth of $29.7 billion, according to the Bloomberg Billionaires Index. Through Cheung Kong Holdings Ltd. he oversees a real-estate portfolio that includes residential and commercial properties, as well as hotels and industrial space.