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SOFAZ buys first property in Asia-Pacific region

2 April 2014 11:39 (UTC+04:00)
SOFAZ buys first property in Asia-Pacific region

By Aynur Jafarova

Azerbaijan's state oil fund SOFAZ acquired its first property in the Asia-Pacific region.

The fund acquired the prime office complex, Pine Avenue Tower A in Seoul, South Korea, for $447 million, it said on April 1.

The purchase of the property was realized through a competitive auction process organized by Mirae Asset Management on behalf of the four owners-NongHyup Bank, NongHyup Life Insurance, Woori Bank, and KDB Life Insurance.

Seoul is one of the most attractive investment destinations in Asia, having provided steady gains across the office sector for many years. It is reinforced by a strong domestic economy and a well-capitalized financial sector.

Pine Avenue Tower A is located in Seoul's central business district (CBD), a sought-after area by leading Korean and international tenants. The property was built in 2011 and is one of the very few trophy assets recently completed in the Seoul CBD area.

The property's Class A specifications position it well to cater to the needs of discerning tenants, generating long term value. The gross floor area (GFA) of the property is approximately 65,000 square meters. The asset is solely leased to S&K Group, one of the largest conglomerates of South Korea. Net rental income of the asset is $23.4 million per year.

Commenting on the fund's latest acquisition, SOFAZ Executive Director Shahmar Movsumov said Azerbaijan will continue to look for similar investment opportunities in the Asia-Pacific region.

"We have sought investment opportunities in key gateway Asian capitals for over a year, and today I am delighted to announce that we have finally made our first acquisition in Seoul. This is a large transaction and shows our belief in the continued strength of major Asian real estate markets which have shown stable returns historically," he said.

SOFAZ, an entity that accumulates and manages Azerbaijan's oil and gas revenues, was established in 1999 with assets worth $271 million.

The main purposes of the fund are the accumulation of funds and placement of assets abroad to minimize negative impacts on economy, prevent the 'Dutch disease', ensure savings for future generations, and maintain the current social and economic standards in the country.

The assets of SOFAZ totaled $36.319 billion as of March 1, 2014.

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