Mirae Asset to be named Korea Post’s core real estate fund operator

Key Takeaways:

• Mirae Asset chosen to manage Korea Post’s new 600 billion won real estate fund.
• Fund targets a 7% internal rate of return through strategic investments in Seoul.
• Investments will focus on office buildings and logistics centers in key areas.
• Mirae Asset previously managed Korea Post’s 400 billion won fund in 2022.
• The fund has an investment period under two years and matures in less than 12 years.

Korea Post Selects Mirae Asset as Preferred Fund Manager

Korea Post has picked Mirae Asset Global Investments Co. as the preferred bidder to manage its new core real estate fund exceeding 600 billion won ($416.8 million). The national postal service is set to officially name Mirae Asset as the fund operator following due diligence and investment council meetings.

Fund Aims for 7% Returns Through Seoul Investments

The agency plans to allocate about 500 billion won to establish the fund, which targets an internal rate of return (IRR) of approximately 7%. The investment strategy focuses on acquiring office buildings in key areas of Seoul, spending more than half of the fund on these assets. The remaining capital will be invested in logistics centers within the Seoul metropolitan area.

Short Investment Period and Fund Maturity

With an investment period of less than two years and a fund maturity of under 12 years, the fund aims to capitalize on market opportunities within a defined timeframe. This structure allows Korea Post to potentially realize returns promptly while managing long-term investment risks.

Continued Partnership with Mirae Asset

This new mandate follows Mirae Asset’s management of Korea Post’s previous core real estate fund in 2022, to which the agency allocated 400 billion won. The ongoing partnership underscores Korea Post’s confidence in Mirae Asset’s capabilities in the real estate sector.

Competitive Selection Process

Earlier this month, Korea Post shortlisted three firms for the fund operator role: Mirae Asset, Koramco REITs Management and Trust Co., and Hana Alternative Asset Management Co. Mirae Asset emerged as the preferred bidder, pending final approvals.

Strategic Move in Korea’s Real Estate Market

By channeling significant investment into Seoul’s prime real estate, Korea Post aims to strengthen its portfolio and leverage growth in the property market. This move reflects the agency’s proactive approach since it began searching for a fund manager in March.