KB Securities and LB Asset Management have acquired a logistics center in the United Kingdom now leased to Amazon — an investment expected to generate a stable rate of return of 7% to 8%, the Maeil Business News reported on August 18.
KB Securities and LB Investment Management agreed to set up a real estate fund of 102.5 billion won ($86.4 million) for the acquisition of the logistics center in the U.K. city of Edinburgh. KB Securities has invested about 42 billion won in the form of beneficiary certificates and about half of them are expected to be resold to major Korean insurance companies, pension funds and other institutional investors. The company will finalize the acquisition by raising funds in the form of senior loans from Korean banks operating in Europe.
KB Securities is expecting a stable rate of return of 7% to 8% as Amazon is planning to lease the logistics center for about 11 years from 2020. Industry watchers said that investors are showing great interest in investment in overseas logistics centers as they are expected to make stable rental income due to the growth of the global e-commerce market in the Covid-19 era. The global logistics market is expected to reach $16.4 trillion in 2026, double that of the $8.2 trillion of 2016 according to a study by Transparency Market Research.
Korean pension funds and mutual aid insurance companies are acquiring overseas buildings despite difficulties in carrying out on-site due diligence. Korean Investment & Securities and Tiger Alternative are in the final stages of negotiations to acquire a distribution center in Texas leased by The Home Depot. Kendall Square Asset Management Company also acquired Amazon’s logistics center in Prague, Czech Republic, for $155 million last year.