Korea-based investment banking and real estate firm Doran Capital Partners has held a first close on its TRISEAS Korea Property Fund. Details of the close were not disclosed, but press reports have stated that the fund has raised $208 million (€156 million), on its way to a $250-million target. The firm reportedly hopes to announce a final close in June.
After the final close, the fund plans to use 65 percent leverage to invest around $650 million in South Korean property. Targeting European institutional investors, the fund received capital commitments from Dutch pension fund administrator Mn Services and Danish financial groups pension Bankpension.
“Capital flows into real estate continue to be strong and our investors are looking for opportunities on a global basis,” John Boynton, Doran’s Hong Kong-based senior managing partner and fund manager, said in a statement. “Considering this is one of the fastest growing economies in the world, its real estate investment markets should not be overlooked by global players.”
The fund will focus on core-plus properties in the office, retail, residential and industrial sectors of South Korea. The fund has a seven-year life and is targeting IRRs between 15 percent and 17 percent.
Apparently, the firm already has its sights on some projects. The fund is reportedly looking at an office building in the city of Taegu, which it would convert to a hotel. Pietro Doran, the firm’s founder, recently told wire service Reuters it expected few deals in Seoul, where the government has imposed a transaction tax to cool off the real estate markets.
The firm was founded in 2002 by Doran, who was formerly the head of Morgan Stanley’s Korean property program. In addition to its headquarters in Seoul, Doran has offices in London, Tokyo, Washington DC, Hong Kong, Guangzhou, Bangkok and Melbourne. The firm has also launched a pan-Asian real estate fund.