The 1965-era building was renovated as recently as 2004
Two private funds of Singapore’s Keppel Corp have acquired an office tower in the Seoul CBD for an undisclosed amount, increasing the conglomerate’s South Korean assets under management to nearly KRW 2.6 trillion ($2 billion).
The Bank of Korea’s Sogong Annex Facility is a 13-storey office building with a gross floor area of 15,750 square metres (169,532 square feet), Keppel said Thursday in a release.
Under the deal, Keppel Asia Macro Trends Fund IV (formerly known as Alpha Asia Macro Trends Fund IV) and a co-investment programme committed by a “leading Korean financial institution” will each hold an effective 50 percent interest in the property. KAMTF IV previously partnered with KB Bank Discretionary Fund to acquire the Samhwan Building in Seoul’s Jongno district.
“Keppel is excited to continue contributing to the renewal of Seoul’s urban landscape,” said Louis Lim, head of real estate at the corporation, whose largest shareholder is state-owned Temasek Holdings. “Similar to how we are refurbishing Samhwan Building, acquired last year jointly with Keppel’s private funds, we will leverage digital technologies to retrofit and future-proof the Sogong Annex Facility.”
New Financial Landmark
Situated at the intersection of Myeongdong and Namdaemun in Seoul’s Jung district, the Sogong Annex Facility was built in 1965 as the headquarters of Korea Commercial Bank. The property was revamped in 2004 and is surrounded by offices of various large enterprises and financial institutions, including the Bank of Korea.
Louis Lim, real estate CEO at Keppel Corp
Keppel’s refurbishment project is to incorporate features such as a high-performance facade, efficient cooling/heating systems and LED lighting to enhance sustainability and indoor environmental quality.
According to a local media report, Keppel plans to rename the building as K Finance Tower to signify its status as a new landmark in the traditional financial centre.
Keppel’s South Korean portfolio includes the 15-storey Samhwan Building, acquired from Hana Alternative Asset Management late last year for $170 million, and waste management firm Eco Management Korea Holding.
“South Korea is a market with strong fundamentals and where Keppel sees tremendous opportunities,” said Robert Sung, the corporation’s chief representative in the country. “We expect to invest some S$3 billion ($2.3 billion) over the next three years across real estate, particularly where we can leverage Keppel’s value-add capabilities, as well as infrastructure assets.”
Deals Evaporate
After soaring to record levels in 2021, investment volume in South Korea’s commercial property market fell 25 percent last year to $32.7 billion, according to MSCI.
The pain continued in the first quarter of 2023 as deal volume tumbled 78 percent year-on-year to $2.7 billion, the data provider said.
One of the few notable deals was announced in early January with Seoul-based EDN Investment Management’s sale of a pair of mid-rise office towers in the capital’s Pangyo Techno Valley to North American investor BentallGreenOak for $297 million.
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