Korea’s Hanwha Asset Management has sold an office tower in Seoul’s Gangnam business district for $242 million as the Korean capital continues to rank among Asia’s regional hotspots for commercial property transactions.
The Seoul-based investment manager agreed last month to sell T412, a 26,389 square metre (284,047 square foot) tower along the city’s Teheran-ro commercial strip, to local bedding manufacturer Allerman, with the pricing, as well as the identities of the buyer and seller confirmed by property consultancy Colliers, which represented Hanwha in the disposal along with Savills and Hanwha Hotels and Resorts.
The T-412 sale is the third major disposal announced in the last few weeks along Teheran-ro, a Gangnam street sometimes referred to as ‘Teheran Valley’ due to the proliferation of tech firms along the route running east from Gangnam Station to Samseong Station and the COEX convention and exhibition centre at the World Trade Center Seoul.
“Due to its efficient business infrastructure, excellent accessibility, and nearby facilities such as COEX, Hyundai Department Store and various branded hotels, the Teheran-ro strip is a highly sought after location by many companies,” Dr Jisang Ahn, director of capital markets and investment services at Colliers in Seoul said in a statement.
Seoul Commercial Strip
Located on the south side of Teheran-ro, T412 is within a few minutes’ walk of Seolleung Station, a key hub connecting the Bundang Line with Line 2 of Seoul’s subway network.
With the area home to a number of multinational IT and financial firms, the 19-storey tower is now nearly 87 percent occupied by tenants including Samsung Financial Affiliates and game developer Nexon Korea, as well as local financial institution KB Bank and German FMCG giant Henkel.
Local news reports had identified Allerman, which is known for producing hypo-allergenic bedding, as Hanwha’s preferred bidder in December of last year, with reports at the time naming Hana Asset Trust, Gravity Asset Management and Leading Asset Management as also having made offers for the property.
A report in Dealsite.co.kr in January had priced the transaction at around KRW 330 billion with the $242 million price cited by Colliers on Monday equivalent to over KRW 334 billion, or KRW 12.7 million per square metre.
Completed on a 1,672 square metre site in August, 2000, the tower was known as Samsung Life Insurance Daechi 2 Building when it was previously owned by the Korean insurer, with Hanwha said in a local report to have acquired the asset for KRW 190.5 billion in 2018.
Korea Stays Hot
Hanwha is selling its Teheran-ro trophy after effective office rents in Seoul rose by an average of 15 percent in 2023, according to CBRE. At the end of 2023 Gangnam had the lowest average vacancy rate in the Korean capital at 0.7 percent, with the city-wide figure standing at 1.5 percent.
Four of Asia Pacific’s largest commercial property transactions last year were in Seoul, including KB Asset Management purchasing the Samsung SDS Tower in a $630 million deal which closed in November as the country’s largest property transaction of 2023.
Along Teheran-ro, Blackstone announced in late March that it had sold Arc Place, with local fund manager Koramco leading the purchase at a price of just over KRW 792 billion. M&G followed up less than two weeks later with a statement that it had sold the Icon Yeoksam office building in Seoul for KRW 204.3 billion, with Mingtiandi identifying the buyer as local investment manager Capstone AMC.
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