Blackstone names Koramco preferred bidder for $553 mn landmark

Blackstone Inc. has tapped South Korea’s Koramco REITs Management and Trust Co. as the preferred bidder for prime office building Arc Place, the sale of which is expected to be the largest real estate deal in the country this year, banking sources said on Thursday.

The sale price is likely to reach 750 billion won ($552.7 million), according to sources. Koramco proposed 12 million won per square meter in the final bidding round, beating Mirae Asset Global Investments Co. and SK Group’s real estate asset management unit D&D Investment.

Located in Seoul’s upscale district of Gangnam, the office is leased out for affiliates of global corporates including Warner Bros. Entertainment Inc., Dyson Ltd. and eBay Inc. and domestic firms like Lotte Capital Co. and Viva Republica Inc., a fintech unicorn and the operator of mobile financial app Toss.

Blackstone entered the Korean real estate market by acquiring the landmark at 470 billion won from Mirae Asset Global Investments in 2016. The building has a 62,747-square-meter floor area with 24 stories above ground and six underground.

Korea’s Hansol Group, a paper-to-logistics conglomerate, founded the building in 1998 and used it as its headquarters for five years.

Hit hard by the 1997-98 Asian financial crisis, Hansol sold the property to Prudential Financial Inc.’s Pramerica Investment Management, which later became PGIM, at 180 billion won in 2003. Pramerica sold the building to Mirae Asset at 430 billion won in 2008.

If Blackstone and Koramco close the deal, the Korean office market that has been frozen due to rate hikes is expected to heat up again.

Separately, Koramco completed a 520 billion won payment to IGIS Asset Management Co. for Seocho Majestar City Tower 1 on Oct. 19. The asset was valued at 11.2 million won per square meter.

Established in 2017, it is a prime office tower with 46,580 square meters of floor area, 17 stories above ground and seven underground. Among the tenants are Nexon Games Co., Krafton Inc. and Olympus Korea Co.

Write to Byeong-Hwa Ryu at hwahwa@hankyung.com

Jihyun Kim edited this article.