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Keppel looking to exit two Seoul office towers for over $200 mn

Jan 15, 2021 (Gmt+09:00)

Yeouido Finance Tower (center), sold by Keppel Investment for around 0 million in Dec. 2020
Yeouido Finance Tower (center), sold by Keppel Investment for around $280 million in Dec. 2020

Singapore-based Keppel Investment Management is preparing to sell two office buildings in Seoul, less than two years after it acquired them for around 200 billion won in a value-add investment.

Keppel is in the process of hiring a manager for both Nonhyeon Building and Hannuri Building to kick off the sale process, according to the company and industry sources this week.

In 2019, the asset manager’s Korean arm bought the two properties, along with Yeouido Finance Tower, in a package deal of 430 billion won, from Samsung SRA Asset Management Co.

Keppel divested of one of them – Yeouido Finance Tower – last month, pocketing about 70 billion won ($64 million) in capital gains. It sold the 42,346 square-meter property to Seoul-based KB Asset Management Co. for around 300 billion won.

Its per-unit price of 22.6 million won per 3.3 square meters marked the highest among Yeouido-based office buildings transacted so far. Yeouido is Seoul’s key financial district.

After acquiring Yeouido Finance Center, it built a 1,320-square-meter extension and attracted 20 additional retail stores as tenants.


For the half-empty Nonhyeon Building located in Nonhyeon-dong, Gangnam, Keppel brought in medical clinics on the lower level of floors and pulled the vacancy rate down to 5%. The upper-level floors are used as office space. The 20-story building has a floor area of 18,606 square meters.

The 15-story Hannuri Building, located in central Seoul, is currently undergoing renovations after its key tenant, the Kim & Chang law firm, moved out. With a floor area of 13,008 square meters, it recently signed a 10-year lease with an oriental medicine clinic.

A Keppel source said that the sales should go smoothly, given the accessibility to public transport and a subway line extension, which should benefit the Nonhyeon Building.

The Singapore-based investment firm has reaped handsome gains from value-add deals in the Seoul property market over the past few years.

In 2019, Alpha Investment Partners, part of Keppel Capital, secured over $250 million in gains from the 1.5 trillion-won divestment of two Seoul office buildings. It reduced their vacancy rates after filling them with big-name firms such as Starbucks and WeWork.

That same year, Keppel's Singapore-listed REIT had acquired T Tower, a 28-story office tower near Seoul Railway Station, for around 250 billion won. The company has not put it back on the block.

The prolonged pandemic drove up the vacancy rates of commercial and office buildings, but demand remained buoyant. Last year, the transaction value of commercial and office buildings in South Korea crept up by 5.3% from a year earlier, data showed, as wealthy investors switched away from the highly regulated residential market.

By Seon-Pyo Hong 

Yeonhee Kim edited this article.

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