South Korea’s cash-strapped companies are seeking to sell their headquarters one after another to secure cash amid the prolonged recession

August 16, 2013 Leave a comment

Cash-strapped companies sell headquarters

기사입력 2013.08.15

South Korea’s cash-strapped companies are seeking to sell their headquarters one after another to secure cash amid the prolonged recession. The companies increasingly sell head offices and lease them back for a long term, a deal called sale-and-leaseback, which ensures investors to gain profit from property lease. Builders and financial companies are especially rushing to sell their headquarters. Daewoo Engineering & Construction (E&C) sold its head office at 390 billion won ($349.0 million) and GS E&C at 170 billion won, with Doosan E&C following suit. Mirae Asset Securities is working on selling its head office in Gangnam, Seoul, and Hyundai Capital plans to make an offshore investment with cash it earned from the sales of headquarters in Yeouido in April. In the securities sector, Tongyang Securities and Daishin Securities sold their respective headquarters. Press and media companies have joined the sales as well. YTN has recently decided to sell its head office in Namdaemun, Seoul, at a price between 200 billion won and 250 billion won. MBC, meanwhile, has been looking for a potential buyer for its headquarters building in Yeouido since last year. The head offices put on the market are being acquired by big investors such as pension funds, who have been struggling to look for suitable investment vehicles as the key rate has remained low. Property developers, real estate investment trusts (REIT), and private equity funds started a process to acquire the buildings, followed by pension funds, mutual aid societies and life insurance companies.

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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