Mastern Sells Seoul Office Tower to Apparel Giant for $261M

Korea’s Mastern Investment Management sold a nearly-completed office building in Seoul’s Gangnam business district late last month as Korea’s office market continues to defy a global slowdown.

The real estate fund manager, which manages over 150 assets worldwide, announced in a LinkedIn post in the closing days of 2023 that it has agreed to sell Centerpoint Gangnam to local apparel giant F&F. A local media report said that the asset, which measures 28,707 square metres (309,000 square feet) according to Mastern’s website, changed hands for KRW 343.6 billion ($261 million).

“This deal is particularly significant as it is the last contract signing of 2023, which was concluded amid internal and external uncertainty in the domestic commercial property market due to the persistence of the triple bottom line (high-interest rate, high exchange rate, and high prices),” Mastern said in the statement.

F&F, which produces sportswear emblazoned with US baseball logos under the MLB brand, and which recently ventured into the K-Pop universe, is said to have agreed to acquire the 14-storey building in October and paid for its purchase in cash before the end of last year, according to a separate local report.

Prime Location

Centerpoint Gangnam is located within a 10 minute’s walk of the Gyeongbokgung Royal Palace, and is scheduled to be completed in the second half of this year, and has six below-ground floors in addition to its fourteen above-ground storeys. Mastern developed the project on the site of the former Hongeun-dongju building.

At the reported compensation, F&F is paying the equivalent of just under KRW 12 million per square metre for more space to churn out clothing including golfwear under the TaylorMade brand and sportswear named after US TV network Discovery Channel.

Describing the property as having virtually no vacancies, Mastern said that it sold the asset before interior construction began to allow the future owners the opportunity to implement their own designs.

The alternative asset manager funded the office’s construction via its Mastern No. 99 Project Financing Vehicle, with the Korean Teachers’ Credit Union reported to hold a 48 percent stake in the vehicle.

The deal took place as occupiers continue to snatch up more office space in Seoul, with vacancy in the Gangnam business district falling to 0.8 percent at the end of September, from 0.9 percent in June, according to a report from Colliers.

With corporate cultures which have kept teams in the workplace and a strong domestic capital environment, Seoul has been the world’s strongest office markets this year, largely propelled by leasing and investment by local firms.

“Amid concerns about a slowdown in corporate growth due to slower global economic momentum witnessed since last year, demand for office expansion from tenants in Seoul’s Grade A office market has increased compared to previous years,” CBRE said in a report published last month.

The Korean capital saw some of Asia Pacific’s largest office investments last year, including locally driven acquisitions such as the $453 million June purchase of the Tower 8 building in the Seoul central business district by a Mirae Asset Management joint venture, according to MSCI Real Assets.

In September Mastern had sold an office property in the Euljiro 3-ga area of Seoul’s central business district to local insurer Kyobo Life for $395 million, with the transaction for that project, which is expected to be completed in 2026, also taking place on a forward purchase basis.

Seoul Office Devotee

Before its recent Gangnam disposal, Mastern had bought up a number of Seoul office assets, including acquiring a property at 279 Seongsu-dong 2-ga in eastern Seoul’s Seongdong district  last November under a forward purchase agreement. Scheduled to be finished in 2026, the 36,000 square metres asset in Seongsu district traded hands for around KRW 360.

In another Seongsu deal, Mastern in October purchased the 10-storey Musinsa Campus N1 office building for KRW 111.5 billion.

In April, the company had acquired the Concordian Building in Seoul’s Gwanghwamun from Deutsche Bank’s DWS Asset Management for KRW 629.2 billion. Located three minutes from the district’s train station, the 37-storey building spans 60,600 square metres of floor area.

Besides offices, Mastern’s Singapore-based unit last month announced a bet on the spending power of Korea’s rapidly ageing population when it revealed plans to raise a $150 million fund to invest in senior housing in Asia’s fourth largest economy through a partnership with STS Development.