Korean Pension Service Acquires 51% Interest in Paris Shopping Center

(August 19, 2010) — The National Pension Service (NPS) of Korea, the fifth-largest pension fund in the world that manages nearly 300 trillion won in assets, has acquired a 51% stake, worth $278 million, in the O’Parinor Shopping Centre in Paris.

The deal is in line with NPS’ plans to boost investments in real estate, infrastructure and private equity funds to 6.4% this year, from 4.5% at November 30, 2009.

The stake was acquired from property company Hammerson, which said it planned to use the proceeds from the sale to invest in the UK and France. Under the deal, NPS will be able to purchase an additional 24% interest in Autumn 2011 from Hammerson for an estimated $136 million. Some of the funds would also be reinvested into assets such as Silverburn, in Glasgow, and future developments such as Les Terrasses du Port, in Marseille, Reuters reported.

“This transaction is in line with our strategy of investing in high quality global real estate,” Hee Seok Kim, head of global investment at NPS, said in a release. “Working alongside Rockspring, we are very pleased to be creating a new joint venture partnership with Hammerson, one of Europe’s foremost managers of retail property.” Our strategy is to improve the growth prospects of the portfolio by releasing capital from mature assets where we have created value, such as O’Parinor, reinvesting into assets such as Silverburn in Glasgow and future developments such as Les Terrasses du Port in Marseille,” added David Atkins, chief executive of Hammerson.

As of June 30, 2010, the O’Parinor Shopping Centre, held in co-ownership with Carrefour and Redevco and acquired by Hammerson in 2002, was valued at $554 million. Net income from the property in 2009 was $28 million.