KKR puts Coupang-leased logistics facility up for sale Warehouse in Incheon expected to be completed next year and fetch $485 mil or more

Translated by Ryu Ho-joung 공개 2022-04-21 08:10:34

이 기사는 2022년 04월 21일 08:07 더벨 유료페이지에 표출된 기사입니다.

Private equity firm KKR has issued a request for proposals seeking a sale adviser to run an auction process for a logistics center in Incheon, South Korea, leased by Coupang, according to industry sources.

Most of the major real estate consulting firms are said to be considering submitting proposals. The deadline for proposals is April 22.

The discussion to build the logistics facility in Incheon’s Seongnam-dong began in 2018. KKR signed a memorandum of understanding with Incheon Metropolitan City and SK Incheon Petrochem in the same year to construct the warehouse, estimated at 300 billion won ($243 million) in total. The MOU ceremony was attended by many officials including John Pattar, head of real estate for Asia Pacific at KKR.

The US firm decided to invest 100 billion won in the form of foreign direct investment and raise the remaining 200 billion won from domestic institutions. In June 2019, a special purpose vehicle (SPV) for project financing was formed to fund the construction.

KKR provided equity funding. Other participants in the syndicate included the Korean Federation of Community Credit Cooperatives (195 billion won), Hanwha Life Insurance (90 billion won), Shinhan Alternative Investment Management (47 billion won) and DB Life Insurance (45 billion won).

Of the total 377 billion won in project financing, only 41.8 billion won was drawn down at the end of 2021. The logistics center, which is under construction, is expected to be completed in May 2023.

The eight-story warehouse will be entirely leased by Coupang, a South Korean ecommerce giant that successfully went public in New York last year. The company invested about 25.5 billion won in the SPV in 2020.

The sale is expected to attract strong interest due to a stable tenant profile and growing demand for logistics property investment. Domestic asset managers and global real estate investment firms have been mentioned as potential buyers.

Given the typical time necessary to prepare an auction process, the seller is expected to receive bids for the property in the first half of this year. The price tag is estimated to be a little below 600 billion won, while many expect that strong interest from potential buyers could drive up the sale price. (Reporting by Gyoung-tae Kim)
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