Mirae Asset, Korea Post Buy Seoul Tower From ADIA and CBRE GI for KRW 589B

A unit of Korea’s Mirae Asset Financial Group has agreed to purchase the State Tower Namsan in Seoul for KRW 588.6 billion ($507 million), according to a statement last week from a brokerage representing the seller of the 24-storey office tower.

A fund managed by Mirae Asset Global Investment, a private equity fund management division of the Korean financial giant, is purchasing the commercial building in Seoul’s central business district from a joint venture between the Abu Dhabi Investment Authority (ADIA) and CBRE Global Investors. The Mirae fund is invested by the Korean financial group’s investment banking division, Mirae Asset Daewoo, and Korea Post, the $112 billion pension fund for the east Asian nation’s postal workers.

The trade for the eight-year-old asset was agreed to within days of Singapore’s Keppel Capital revealing that it had purchased the T Tower a few kilometres away on behalf of Keppel REIT as investors continue to be drawn to the South Korean capital’s office market.

ADIA and CBRE GI Exit Seoul Investment After Four Years

The Korean investors have agreed to purchase the 67,000 square metre (721,182 square foot) tower for the equivalent of KRW 8.78 million ($7,577) per square metre some seven months after the building’s owners were first reported to have put the asset on the market at an asking price then said to be at least KRW 550 billion.

ADIA and CBRE GI had purchased the office building in the city’s central Jung-gu district during 2015 for KRW 503 billion, according to local media accounts, with the tower having lost one of its primary tenants at the beginning of this year.

After the owners first put State Tower Namsan on the market in August 2018, in December of last year 10 investors had submitted bids for property with Korea’s Igis Asset Management and Capstone Asset Management of the US said to have been among Mirae’s rivals for the building.

On 18 January of this year JLL and Cushman & Wakefield, which were representing the building owners in the disposal, were reported to have chosen the Mirae bid as the preferred offer for State Tower Namsan. At the KRW 588.6 billion price, ADIA and CBRE GI will have achieved a capital gain of over 17 percent on the investment in less than four years.

The grade A property is currently home to tenants including BMW Korea, Korea Investment Corporation and BNP Paribas. The transaction was concluded despite Korean law firm Shin & Kim having relocated to the D Tower in Seoul’s Jongno-gu district earlier this year, vacating around one-third of the tower’s office space.

Seoul Office Deals on the Rise

The State Tower Namsan transaction is among a growing number of Seoul mega-deals as the volume of commercial real estate investments rose 68 percent quarter-on-quarter during the first three months of this year.

Total investment transactions in Seoul and the adjacent Bundang district reached KRW 1.9 trillion during the period from January through March this year, according to a recent report by Cushman & Wakefield.

KRW 1 trillion of that volume came from ARA Asset Management’s agreement to purchase the Seoul Square building in February. ARA’s compatriots from Keppel Capital then announced their KRW 252 billion purchase of the T Tower on behalf of Keppel REIT on 23 April.

Just this afternoon Keppel Capital added to that deal flow with by announcing that, through its Alpha Asia Macro Trends Fund III (AAMTF III), it had agreed to acquire three more grade A office buildings in Seoul for a total of KRW 430 billion.