Macquarie Bank, the Australian investment bank, yesterday listed a real estate in South Korea investment trust on the Korea Stock Exchange, expanding its business in Asia's fourth-largest economy.

The Reit, the first in Korea to be wholly owned by a foreign company, plans to invest aggressively in office buildings in the central business district of Seoul.

It has bought the Kukdong Building for about A$180m (US$139m) as its first asset and raised A$95m through a rights offering, Macquarie said. The acquisition makes Macquarie the third biggest foreign manager of commercial property in Korea, managing about A$500m in office properties in Seoul.

"This new fund will be a very exciting addition to the Macquarie funds management platform in Asia," said David Schaefer, head of Macquarie Bank's Asian real estate business. "We have targeted the Seoul central business district market as an opportunity because of the low vacancy rates, the lack of new supply and the anticipated recovery in the Korean economy."

South Korea's property market has enjoyed a boom over the past few years, after the government encouraged property transactions as a way of boosting the economy in the wake of the 1997-98 financial crisis.

"We believe there is an opportunity to add considerable value through intensive asset management to reposition the building in the market by minor refurbishment and reorganising the leases," Mr Schaefer said.

Macquarie is one of the key investors in the trust, contributing about A$18.5m of the A$95m. The bank, together with some major South Korean institutions, controls about 54 per cent of the equity. The remainder was taken up by South Korean retail investors and small financial institutions.

The listing of a Reit follows several investments by Macquarie in South Korea. Last March, the bank, together with South Korea's Shinhan Financial Group, bought 28-year concession rights to a 5.6-km toll road in Kwangju. It also operates an equity derivatives business with Woori Bank.

The latest move is expected to strengthen Macquarie's position in the expanding property funds management business in Asia. It has A$23.2bn of real estate, infrastructure, airports and utility funds under management worldwide.