The sale of Pangyo Tech 1, a landmark office tower in Pangyo, South Korea’s answer to the US' Silicon Valley, has drawn strong bidding interest from global and domestic investors, signaling renewed appetite for core commercial real estate assets amid uncertain economic conditions.
Investment banking industry sources said on Thursday that Pangyo Tech 1, a flagship office complex anchored by tenants, including Naver Corp., KakaoBank Corp., and Hyundai Motor Co., attracted more than half a dozen bidders in a sale process overseen by Mirae Asset Global Investments on Tuesday.
The deal, expected to fetch up to 2 trillion won ($1.5 billion), could set the tone for a packed calendar of prime office sales in Seoul and the capital’s greater metropolitan area for the rest of the year.
According to people familiar with the process, bidders for Pangyo Tech 1 included Capstone Asset Management; Keppel Investment Management; a consortium of Kreate Asset Management and KKR & Co., previously known as Kohlberg Kravis Roberts & Co.; a consortium of KakaoBank and Korea Investment Real Asset Management; gaming firm Smilegate; Singapore’s sovereign wealth fund GIC; and Korea Real Estate Investment & Trust.
Pangyo is South Korea's answer to the US' Silicon Valley (Screenshot captured from Pangyo Tech 1 Tower) The anticipated price – around 30 million won per 3.3 square meters, or one pyeong – places Tech 1’s valuation between 1.8 trillion won and 2 trillion won ($1.3 billion-$1.5 billion), making it the largest commercial real estate sale in Korea this year, sources said.
Mirae Asset is expected to select a preferred bidder later this month after final interviews and complete the deal by year-end.
COVETED PRIME OFFICE BUILDING
The 15-story tower, with seven floors underground, was constructed in 2021 and sits at the heart of the Pangyo Alphadom City development complex in Seongnam, south of Seoul.
With a gross floor area nearing 200,000 square meters and long-term leases in place, the property has been a coveted prime office building.
The brick-colored facade of Seoul Square, located directly opposite Seoul Station “It’s one of the most stable income-producing assets on the market,” said a Seoul-based fund manager. “The tenant mix, the location, and the scale make it a must-see for anyone looking to deploy significant capital in Korea.”
Mirae Asset initially partnered with Naver to invest in the asset, but Naver sold its 45.08% stake in the holding fund to GIC in 2023. Though the fund has a 2027 maturity, Mirae launched the sale earlier this year to rebalance its portfolio.
WAVE OF OFFICE TOWERS SET TO HIT THE BLOCK
Analysts said Pangyo Tech 1 is just the beginning.
A wave of 1 trillion won-plus office towers is set to hit the block in the coming months.
Office buildings in Teheran-ro, where AP Tower is located IGIS Asset Management Co. plans to open a bidding process mid-July to sell Signature Tower in central Seoul.
The 100,000 square meter tower, currently housing the headquarters of Kumho Petrochemical Co., is expected to fetch more than 1 trillion won.
In April, IGIS picked Colliers Korea, a unit of global real estate asset management group Colliers, as its adviser for the Signature Tower sale.
By the end of this month, IGIS also plans to receive bids for AP Tower, formerly The Pinnacle Yeoksam, and two adjacent hospitality properties, in southern Seoul.
A consortium of Samjong KPMG Accounting Corp., Cushman & Wakefield Korea and NAI Korea is advising IGIS on the sale of the landmark buildings in Teheran-ro, Gangnam Business District.
Signature Tower near Euljiro 3-ga Station, which houses Kumho Petrochemical's headquarters The three properties have a combined land area of around 2,000 square meters in the Teheran-ro corridor, one of Seoul’s most tightly held office markets.
Meanwhile, ARA Korea Asset Management is in the middle of selling Seoul Square, a landmark office tower across from Seoul Station.
ARA, which has chosen JLL Korea and Savills Korea as joint sale managers, hopes to close the deal by year-end, with pricing estimated in the low 1 trillion won range.
Looking further ahead, Landspert AMC is planning to sell its G1 Office project in Insadong, central Seoul, ahead of its scheduled 2025 completion.
The firm hopes to receive over 1.5 trillion won from the sale of the building.
Write to Gyeong-Jin Min at min@hankyung.com In-Soo Nam edited this article.
