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E-Mart headquarters in Seongsu sold for 1.2 trillion won
The office building deals in Seoul and neighboring Bundang Business District (BBD) reached 3.1 trillion won ($2.5 billion) during the first quarter of 2022, up 45% from the same period of the last year, according to real estate firm Cushman & Wakefield plc’s report on April 26. The transactions are more than triple the deals in the fourth quarter of 2021, which amounted to 1 trillion won. The seven office deals include one from Gangnam Business District (GBD), two from BBD and four from ‘other areas’ in Seoul except for the three key business districts -- GBD, Central Business District (CBD) and Yeouido Business District (YBD). Of the seven deals, the two major transactions were Alpharium Tower I and II in Pangyo, Korea’s so-called Silicon Valley in BBD, and Shinsegae Inc.’s supermarket chain E-Mart Inc. headquarters in Seongsu, Seoul.In February, Korea’s Mastern Investment Management Co. acquired Alpharium Tower I and II from ARA Asset Management Korea for around 1 trillion won. The sale price was 9.1 million won ($7,214.2) per square meter, the highest-ever office price per unit area in Pangyo. Alpharium Tower is a core asset and has game developer NCSOFT Corp. and Samsung Group's tech service unit Samsung SDS Co. as the key tenants.The second-highest record in the area is 8.2 million won ($6,493.8) per square meter of Pangyo Alpha Dome City’s 6-1 block in 2020, when Korea Teachers' Credit Union (KTCU)-led consortium bought a 50% stake in the block from Public Officials Benefit Association (POBA)-led consortium. Tech giants Kakao Corp. and Naver Corp. will begin to use the block in May.
The E-Mart headquarters in Seongsu, which is classified as one of the 'other areas' in Seoul, was sold by the Krafton Inc.-Mirae Asset Global Investments Co. consortium for 1.2 trillion won. The buyer is considering demolition and redevelopment of the building, The Korea Economic Daily understood. (Courtesy of Cushman & Wakefield Korea Research) *Closed transactions over $10 millionIn GBD, Korea's Koramco REITS Management and Trust Co. purchased Gangnam P Tower, with a flooring area of 44,073 cubic meters, for 424.5 billion won via its blind pool fund from Hangang Asset Management Co. More offices in Seoul and BBD are acquired through blind pool funds and REITs, Cushman & Wakefield stated.A full-year office deal volume of 2022 will be similar to that of 2021, the real estate firm said. Some landmark offices in Seoul kicked off the sales process at the end-2021, including Jongno Tower and Jongno Place in CBD and Multicampus Yeoksam and Apro Squre in GBD. The deals are scheduled to be completed in the second half of this year.Also, the bidding price of International Finance Center (IFC) in YBD is expected to reach the mid-4 trillion won, marking the largest deal of this year, the report added.The selling prices of offices in 2022 will be similar to those in the past years as effective rent is rising due to increased demand for offices, declining vacancy rates and interest rate hikes, the report said. The average vacancy rate of grade-A offices in Seoul and BBD was 3.5% during the first quarter, down 170 basis points from the fourth quarter of 2021.The increase in rental prices support the offices’ capitalization rate despite the steep hikes in interest rates, and some office deals this year will break the previous records, the real estate firm said in the report.
By Tae-Ho Leethlee@hankyung.comJihyun Kim edited this article.