National Pension Service boosts overseas real estate investments


National Pension Service chairman Jun Kwang-woo said he sees investment opportunities in Europe as major state properties, such as Spain’s Madrid Airport, are to be privatized.

In an interview with the Yonhap news agency after his Europe trip for an industry forum Sunday, the head of the world’s fourth-largest pension fund said NPS will be “actively eying” the undervalued properties expected in the market as some states enter debt restructuring.

“There is no need to hurry to increase overseas assets but NPS is looking at prime real properties to purchase,” Jun said.

“Some European governments will be forced to privatize their assets as part of their debt restructuring program, and we will be able to grab them at a bargain price like the way Korean assets were sold dirt cheap during the 1997-8 Asian Financial Crisis,” Jun said.

He said NPS would be particularly interested in public infrastructure like Spain’s Madrid Airport Barajas suitable for its long-term investment portfolio. Referring to Spain as “major player in tourism industry,” Jun said the airport is an investment target as demand for airport use is likely to stay stable regardless of the country’s economic conditions.

His comments come as the pension is boosting overseas real estate investments. Since 2008, it has made its overseas properties portfolio 10-times bigger. Its overseas property investments now exceed 5 trillion won ($4.4 billion), up from 564 billion won in 2008.

NPS last year spent 2.6 trillion won on overseas property investments, including the 180 billion won purchase of a 12 percent state in the U.K.’s Gatwick Airport. Another 1.14 trillion won was spent on the deal with Kohlberg Kravis Pipeline, the largest refined-products pipeline in North America. It also owns the HSBC headquarter building in Canary Wharf, KDX Toyosu Grandsquare in Tokyo and Aurora Place in Sydney. NPS currently manages 340 trillion won and its overseas portfolio takes up about 12.6 percent.

By Cynthia J. Kim (cynthiak@heraldcorp.com)