South Korean investors snap up US skyscrapers

Seoul

SOUTH Korea's institutional investors are putting money in debt to buy Manhattan and San Francisco skyscrapers as they flee record-low bond yields and falling shares at home.

A group of Korean insurance companies is investing about US$220 million in a mezzanine loan, which is repaid after senior debt in case of a default, for the 54-storey AXA Equitable Center at 787 Seventh Avenue in Manhattan this month, people familiar with the matter said last week.

The Teachers' Pension is underwriting a combined US$100 million mezzanine debt along with other domestic funds for the 32-storey Westin St Francis hotel in San Francisco, the fund's first investment abroad in such loans.

South Korea, with an ageing population and a national pension fund with 507 trillion won (S$580.2 billion) in assets, was the fourth-biggest foreign investor in US offices last year, according to Jones Lan…