ESR, Korea’s NH Investment & Securities Sell Seoul Square for $870M

ESR’s ARA unit and Korea’s NH Investment & Securities have sold the Seoul Square building in the capital’s central business district for KRW 1.28 trillion ($870 million).

The sale of the landmark office block directly opposite Seoul Station was announced Thursday by JLL, which advised the sellers alongside Savills. Singapore-based ARA, which was acquired by industrial giant ESR in 2022, had teamed with NH in 2019 to buy the 1977-vintage tower for KRW 1 trillion (then $890 million), and the partners reportedly put the asset on the market last year seeking roughly the same price.

The buyer of the 132,806 square metre (1.4 million square foot) building wasn’t disclosed, but Lee Keehoon, JLL’s Korea capital markets head, noted that “a leading financial group with development expertise” had taken part in the deal, and media accounts identified the purchaser as Korea Investment Real Asset Management, a unit of Korea Investment Finance Holdings.

“This means that the prospects for office investment are positive, as the area around Seoul Station is set to be transformed into a modern business district as part of the planned urban environment improvement project,” Lee said. 

Former Daewoo HQ

Seoul Square is a 23-storey office building with underground links to Seoul Station, the capital’s central railway hub serving Metro lines 1 and 4 and multiple commuter and airport lines. The building is distinguished by its 7,722 square metre LED display facade, which is often used to display popular art.

The property previously served as the headquarters of Daewoo Group before being renamed Seoul Square following the conglomerate’s breakup. After undergoing a major renovation in 2010, the building attracted a range of domestic and international tenants and is now occupied by a mix of Korean and multinational companies, according to JLL.

With reference floor plates of 2,975 square metres, Seoul Square offers some of the largest office spaces in the CBD. Korea Investment Real Asset Management is acquiring the property at the equivalent of KRW 9.7 million ($6,586) per square metre of gross floor area.

The megadeal’s stats still place it short of the biggest-ever transaction of a building in South Korea’s office market, a distinction held by Mirae Asset’s $1.4 billion sale of Pangyo Tech One Tower near Seoul to KIS and KakaoBank. That deal closed last year at a consideration equal to KRW 10.1 million per square metre, setting a new mark for tech hub Pangyo on a unit cost basis.

Divestments Continue

The disposal of Seoul Square comes as ESR sharpens its focus on “new economy” projects like data centres and offloads legacy assets, most recently a Shanghai commercial property.

A fund managed by ESR sold The Platinum, an office block next to the Xintiandi entertainment complex in central Shanghai’s Huangpu district, for RMB 1.62 billion ($233 million) in February, according to market sources that spoke with Mingtiandi. The buyer is Jing Fa Industrial Group, a Shenzhen-based family-led property development and investment firm, the sources said.

ESR put The Platinum on the market about a year ago for an asking price of RMB 2.3 billion as the California Public Employees’ Retirement System, a primary backer of the fund, was said to seek an exit from the investment.

In October of last year, ESR announced the sale of its remaining 30 percent stake in Kenedix to SMFL Mirai Partners for an undisclosed price, giving the unit of Sumitomo Mitsui Finance and Leasing full control of the Japanese real estate fund manager. The transaction followed ESR’s sale of the ARA Private Funds business to SMFL Mirai and Kenedix in 2024 at an enterprise value of $270 million.