November 16, 2009 10:38
The National Pension Service (NPS) has bought HSBC headquarters in London, it said Sunday. The NPS signed a contract to purchase the HSBC Tower for 772.5 million pounds (US$1.29 billion). HSBC was the world's largest financial group in terms of market capitalization and assets last year but has been overtaken by the Industrial and Commercial Bank of China.
HSBC also ranked first in the Forbes list of the world's top 2000 companies in 2008. Mainly functioning as a commercial rather than an investment bank, HSBC now has 8,500 branches in 86 countries.
An emblematic structure in London's Canary Wharf district, the HSBC building was erected in 2002, has 45 floors above the ground and four floors below and accommodates up to 8,500 people. The building was sold to a Spanish developer for 1.1 billion pounds in October 2007 and bought back for 838 million pounds by HSBC in December last year as the price fell right after the global financial crisis. Now HSBC has sold the building to NPS to secure funding.
It is the largest purchase of overseas real estate by a Korean investor, nine times more than the $150 million for which a consortium led by Woori Finance Private Equity Fund and Kumho Investment Bank bought AIG headquarters on Wall Street in June.
"The London real-estate market has been recovering since hitting the bottom in the first half of 2007 and profitability for investment has improved considerably," the NPS said in a statement. HSBC agreed to lease the building back for 17 years. With the current annual lease of 46 million pounds, the NPS will be able to recoup its investment with the lease income alone, it said.
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