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Alpharium Tower in Pangyo, so-called Korea's Silicon Valley South Korea’s landmark office Alpharium Tower sale has been completed for 1.02 trillion won ($827.3 million), marking a record-high price per unit area of office deals in Pangyo, so-called Korea’s Silicon Valley. Korea Teachers’ Credit Union (KTCU), which invested 110 billion won to become the largest shareholder with a 39.6% stake in the property in 2017, has gained 285.3 billion won of cumulative returns, real estate industry sources said on May 29.Singapore-based ARA Asset Management’s Korea unit acquired the property from real estate project financing vehicle (PFV) Alphadom City for 527.9 billion won in 2017. KTCU, which invested 110 billion won in ARA Asset’s 277.8 billion won REIT for the deal at the time, has earned an aggregate of 285.3 billion won. The earnings comprise the 110 billion won of principal, 142.7 billion won in gain on sale and 32.6 billion won in dividends. The net internal rate of return (IRR) reaches 21.9%. Other Korean investors in the REIT include NongHyup Life Insurance Co., Pine Tree Investment & Management Co. and ARA Asset Management. The exit took place as the five-year period of investment terminated in March.ARA Asset sold the two buildings, Alpharium Tower I and II, to Seoul-based Mastern Investment Management Co. in January. The sales reached 9.09 million won per square meter, the highest-ever price per unit in office deals in Pangyo, a tech hub in 15 kilometers southeast of Gangnam District, Seoul. The following record is 7.88 million won per square meter in Pangyo H Square, which Korea Real Estate Investment & Trust (KOREIT) purchased for 700 billion won last year.The two buildings of Alpharium Tower were constructed in November 2015. The buildings have 13 floors above ground and three underground with a combined floor area of 112,254 square meters. The tenants include Korea’s leading game developer NCSOFT Corp. and information tech services provider Samsung SDS Co., which together use around 80% of the rentable floor area. In 2020, the KTCU-led consortium bought a 50% stake in Pangyo Alphadom City’s 6-1 block the Public Officials Benefit Association (POBA)-led consortium for around 1 trillion won. The sale price was 8.2 million won per square meter.KTCU, a retirement fund for Korean school teachers and employees, manages 41.8 trillion won in assets as of end-2021. It earned an 11.3% return from investment in 2021, the highest return since 2009. Its alternative investments make up 62% of the AUM.By Tae-Ho Leethlee@hankyung.comJihyun Kim edited this article.
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