Korean pension fund earns $871 bil. by selling HSBC tower

The National Pension Service of Korea said on Sunday that it recently sold HSBC’s global headquarters building in London, which it bought in 2009, to Qatar Investment Corp. and earned a total of 960 billion won (871 million U.S. dollars) in return on investment.

HSBC’s global headquarters building is a 45-story building sitting in Canary Wharf, London’s financial center, and was completed in 2002. Spanish real estate company Metrovacesa purchased the building for 1.09 billion pounds (1.71 billion dollars) in 2006, and resold it to HSBC when the company encountered a financial crunch amid the deepening global financial crisis in 2008. The National Pension Service bought the building for 772.5 million pounds (1.21 billion dollars) in November 2009.

Korean pension fund NPS reportedly sold the building to Qatar Investment Corp. on Dec. 5 for 1.1 billion pounds (1.726 billion dollars), the highest price ever for a single building in Britain, raking in 327.5 million pounds (514.10 million dollars) in net yield alone. NPS has earned a total of 960 billion won (871 million dollars) in combined income, a 64 percent rate of earnings for five years, including 419 billion won (380 million dollars) in rent income, and 541 billion won (491 million dollars) in net income from the sale.

Hong Wan-seon, head of fund management division at NPS, said, “If it were before the global financial crisis, Middle East countries and Singapore would have fiercely competed to invest and Korea could not have a chance for investment,” adding, “Following the global financial crisis, NPS was the first to enter London where realty prices were recovered sooner than other cities, and we were able to generate high yield on investment.”