Bundang Doosan Tower, a landmark office building in the Seoul metropolitan area, is up for sale as its owner, Koramco REITs Management & Trust Co., kicked off its sale process on Tuesday.
The market interest is whether Doosan Group, which sold off the office complex in 2021 amid its liquidity crisis, will exercise its right of first refusal to retake the former headquarters building.
Korea Investment & Securities Co. is the lead manager of the sale.
According to investment banking sources, Koramco REITs & Trust has begun the divestment process as its real estate fund will mature early next year.
Market watchers estimate the deal’s value at around 800 billion won ($575 million), a premium to the 620 billion won price tag when Koramco acquired the asset in 2021.
Koramco REITs Management & Trust is a leading South Korean real estate firm Completed in 2020 and located in Seongnam City’s Bundang area, Bundang Doosan Tower consists of two interconnected buildings, each rising 27 floors above ground with seven underground levels.
Spanning over 128,000 square meters in gross floor area, the tower features a skybridge linking the two buildings and is well-connected to Seoul’s transport network via the Bundang and Shinbundang subway lines, as well as the Gyeongbu Expressway.
FULLY LEASED TO DOOSAN AFFILIATES
Despite the planned change in ownership, the property continues to be fully leased by Doosan Group affiliates, including Doosan Corp., Doosan Bobcat Co. and Doosan Enerbility Co.
Lease terms initially set at five years include extension options that allow for occupancy until 2031.
Rental income from the asset stood at 33.2 billion won last year.
Doosan Corp.'s headquarters Back in 2021, Koramco REITs & Trust, in partnership with Doosan Group, set up Bundang Doosan Tower REITs, a special purpose vehicle, to acquire the office complex.
Some 160 billion won in equity financing included 110 billion won in preferred shares purchased by Hyundai Investments Co. and MPlus Asset Management Co.
Doosan Group injected 30 billion won to acquire common shares, while Korea Investment & Securities, which is managing the current sale, invested 20 billion won in common equity.
CHANCE TO RECLAIM A PRIZED PIECE OF REAL ESTATE
The Bundang Doosan Tower sale may offer Doosan Group a chance to reclaim a prized piece of real estate in the heart of Korea’s Bundang business district.
Doosan Tower, the most visible shopping mall in the Dongdaemun fashion market While several domestic and overseas institutional investors are said to be weighing bids, market attention is focused on whether Doosan Group will exercise its right of first refusal.
Industry officials point to the asset’s symbolic value and prime location as strong incentives for Doosan to consider re-entry.
The group has shown a willingness to reinvest in previously sold strategic assets, including the Dongdaemun Doosan Tower, another landmark it sold during the 2020 downturn.
Doosan invested 80 billion won in common equity at the time when real estate firm Mastern Investment Management Co. acquired the tower. It later opted to roll over the investment when Korea Investment & Securities took over ownership this year.
Write to Kyung-Jin Min at min@hankyung.com In-Soo Nam edited this article.
