Singapore’s GIC Sells Seoul Office Tower to Korean NPS, Koramco for $180M

Singapore sovereign fund GIC has completed the sale of a central Seoul office tower to an investor group including South Korea’s National Pension Service and Koramco Asset Management for KRW 247.7 billion ($180 million).

The deal value for The Exchange Seoul in Jung district includes more than KRW 190 billion for the office section and over KRW 50 billion for the retail component, according to registry records. GIC had acquired the 1980-vintage building from investment banking giant Morgan Stanley in 2004 for KRW 76 billion, according to Maeil Business Newspaper.

A Koramco fund purchased the property for KRW 270 billion, with local firms GS Engineering & Construction and City Core joining the NPS in investing in the vehicle, according to information from property consultancy Colliers. “The Koramco consortium plans to redevelop the asset into a new prime office with a total floor area of 62,016 square metres (18,760 pyeong),” said Judy Jang, an associate director with the Colliers research team in Seoul. “The building is expected to be a large-scale office with seven underground floors and 26 floors above ground.”

The NPS is investing KRW 250 billion into the 10-year fund managed by Koramco, which together with City Core and GS Engineering & Construction will commit the remaining KRW 20 billion, according to local news reports. The deal is said to be the NPS’s first investment in domestic real estate development in three years.  At the purchase price, the new owners are paying the equivalent of KRW 4.4 million per square metre of future built area for the site of their new project. The 15-storey Exchange Seoul spans 29,461 square metres (317,116 square feet) of floor area.

Expanded Project Eyed

The unsuccessful bidders for The Exchange Seoul included D&D Investment, Eden Asset Management, Blue Cove Asset Management, Kiwoom Investment Asset Management and Pebblestone Asset Management, the Maeil paper said.

CBRE Korea and Deloitte Anjin acted as advisors to GIC during the sale process, which was first reported by local media late last year. The Singaporean investor is also said to be seeking an exit from another investment, the nearby Seoul Finance Center, amid a red-hot office market in the Korean capital.

GIC recently signalled a renewed effort in the local real estate market with the July appointment of Jasmine Loo as head of real estate for Korea. Loo most recently served as a senior vice president in the $801 billion fund’s London office for more than five years, focusing on real estate investment and asset management in Europe.

GIC plans to move its Seoul office from the Seoul Finance Center to the Gangnam Finance Center, which it also owns, and expand the Korean affiliate, according to a KED report.

Big Investors Swoop

Seoul’s office market helped boost the city’s volume of income-generating property investment to $7.4 billion in the first half of 2024, trailing only Tokyo’s $10.1 billion, according to MSCI’s latest Asia Pacific Capital Trends report.

The Korean capital recorded KRW 4 trillion in office trades in the first half of the year, down slightly from the KRW 4.5 trillion in transactions during the same period a year earlier, according to a July report by Cushman & Wakefield.

Last week Mingtiandi reported that US developer and fund manager Hines had acquired the Seoul headquarters building of Hanssem, a local furniture maker, through a vehicle of Gravity Asset Management in a September deal valued at KRW 320 billion ($235 million).

Earlier this month, a private REIT under South Korean fund manager Koramco sold The Asset Gangnam office tower in Seoul to Samsung SRA Asset Management for KRW 1.1 trillion ($820 million). That deal came a month after Singapore’s CapitaLand Investment completed its KRW 440.8 billion ($330 million) purchase of the Golden Tower office building in Seoul’s Gangnam business district from the NPS on behalf of a new private fund.

In March, Blackstone’s $588 million sale of Arc Place on Seoul’s Teheran-ro to Koramco ranked as Asia Pacific’s largest transaction of a single property in the first quarter, according to MSCI.