‘The One,’ an 85-story Toronto skyscraper, funded by Korean institutions

September 9, 2019 | News, Real Estate
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South Korean institutions lend C$560 million ($423 million) to IGIS Asset Management

IGIS will onward lend the funds to Mizrahi Developments, which is developing the skyscraper in Toronto, Canada.

Dubbed ‘The One,’ the mixed-use building will cost an estimated $1 billion. Once completed, it will be the tallest building in Canada.

Low-risk alternative investment

“Skyscrapers in main shopping streets in Toronto are emerging as safe-haven assets because of their locations and the low risk [of divesture],” said an alternative investment industry insider.

Korean investors are seeking to diversify their real estate investments away from the US, Europe, and Australia.

Canada is, therefore, an attractive destination given its boom in skyscraper construction.

Funding arrangements

Meritz Securities Co. Ltd. committed C$226.6 million out of the total debt of C$560 million. It executed the arrangement based on a principal repayment guarantee.

The tenure of the debt is three years with an option to extend for a further 12 months.

Finally, Meritz is a Korea-based company specialized in the provision of securities and financial services. However, the details of the other participants in the funding are not available. Further, with much of Europe suffering negative yields, there is increasing competition for lucrative real estate deals.

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