Nuveen Buys Seoul Tower From IGIS for $250M to Enter Korean Office Market

Nuveen Real Estate has made its first splash in Asia’s hottest office market with the purchase of a central Seoul building for a reported KRW 350 billion ($250 million).

The Chicago-based fund manager acquired the Jeongdong Building in the South Korean capital’s Jung business district from a private REIT of locally based IGIS Asset Management, according to an account by Maeil Business Newspaper. IGIS had put the tower at 21-15 Jeongdong-gil up for sale in January and hired CBRE and Savills to market the 20-storey building, Maeil said.

The deal is understood to have been made under Nuveen’s Asia Pacific Cities core fund and marks the firm’s maiden office investment in South Korea after acquiring a last-mile logistics facility south of Seoul and a warehouse northeast of the capital.

Nuveen, an affiliate of US financial giant TIAA, had not issued a statement about the deal by the time of publication.

Embassy HQ

Located opposite Jeongdong Park near Deoksugung Palace and City Hall in Jung district, the Jeongdong Building houses tenants including the Kim & Chang international law firm and the New Zealand, Norwegian and Dutch embassies, according to Maeil.

IGIS had acquired the tower from Samsung SRA Asset Management in 2014 for a reported KRW 280 billion. A bidding exercise for the building conducted in May of this year saw Nuveen overcome local players including Kyobo AIM Asset Management, Vestas Asset Management and Mastern Investment Management, the newspaper said.

The US firm’s reported acquisition price translates to KRW 8.9 million ($6,400) per square metre for the Jeongdong Building’s 39,343 square metres (423,485 square feet) of floor area.

Across the river in Yeouido financial district, another big-ticket office asset is expected to change hands soon, with Koramco Asset Management having agreed to buy the NH Nonghyup Capital Building from KREITs Asset Management for a price in excess of KRW 200 billion, Maeil said in a separate report.

Located near the Yeouido and Saetgang subway stations, the 10-storey office block is trading at more than KRW 7.4 million ($5,300) per square metre based on its floor area of 27,000 square metres.

Deal Momentum

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.

News broke last week that Singapore sovereign fund GIC had completed the sale of The Exchange Seoul in Jung district to an investor group including South Korea’s National Pension Service and Koramco Asset Management for KRW 247.7 billion ($180 million).

A week earlier, 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).