KKR’s fund pays $135m for warehouse facility in South Korea

KKR's fund pays $135m for warehouse facility in South Korea
Mercedes-Benz Parts Distribution Center in Anseong, Korea (approximately 70-min away from Seoul) Image: Courtesy of KREST

KKR’s fund KKR Real Estate Select Trust Inc.(KREST) has made its first international investment with the acquisition of a warehouse facility in Anseong, South Korea for $135 million.

According to a statement by KKR, KREST has acquired the Mercedes-Benz Parts Distribution Center, approximately 353,000 square feet (9,910 py), a build-to-suit warehouse facility located in Anseong, South Korea.

The Mercedes-Benz Parts Distribution Center was purpose built for luxury automaker Mercedes-Benz, which has been using the property as its sole distribution center in South Korea since 2014.

The property is located in a central logistics corridor that provides access to all major areas of South Korea’s central region. LB Asset Management participated in the investment and will continue to operate the property following the close of the transaction.

“We are pleased to purchase this high-quality property for KREST as we continue to expand our portfolio of strategically located, mission-critical industrial assets,” said David Cheong, Managing Director at KKR. “We look forward to closely collaborating with our local partners to continue to be a solutions provider to our tenant, Mercedes-Benz.”

Additionally, KREST has acquired two state-of-the-art warehouses in the Rickenbacker Logistics Park (the RLP warehouses), a Class A industrial park located in Columbus, Ohio, said KKR.

Completed in 2021, the RLP warehouses are located in a master planned industrial park that is adjacent to several major air and rail transportation hubs, including the Rickenbacker Airport and the Rickenbacker Intermodal Terminal. The two single-tenant buildings purchased by KREST total approximately 1,147,000 square feet and feature 36-foot clear heights, 130-foot truck courts and 54 by 50-foot column spacing. The properties are 100% leased with a weighted average lease term of approximately nine years to two high-quality credit tenants. Both tenants have invested considerable amounts of their own capital into their respective warehouses.

“The RLP warehouses are strategically-located, high-quality assets which are a great complement to the existing industrial properties in the KREST portfolio,” said Ben Brudney, a Director in the real estate group at KKR who oversees the firm’s industrial investments in the United States. “We believe Columbus is an increasingly important hub in the national supply chain.”

KREST acquired the assets from a Joint Venture between CT Realty and Walton Street Capital and CBRE was the Seller’s broker on the transaction.

“Our purchases of the Mercedes-Benz Parts Distribution Center and the RPL warehouses grows the total property value acquired by KREST since its launch to over $1.7 billion across a range of differentiated equity and debt strategies, including U.S. and international geographic exposures,” said Billy Butcher, Chief Executive Officer of KREST and Chief Operating Officer of KKR Global Real Estate.

“These two investments are great examples of how KREST is positioned to benefit from the deep expertise and sourcing capabilities from across the global KKR real estate platform.”