Keppel REIT to sell Seoul-based prime office T Tower

Singapore’s Keppel REIT Management Ltd. is set to divest of its Seoul-based prime office building T Tower near Seoul Station.

Real estate managers Jones Lang LaSalle (JLL) and Colliers, the lead managers for the sale, said on Tuesday they will select a preferred bidder among around 10 potential buyers by the end of this month.  

Keppel REIT acquired the property for 252.6 billion won ($181.2 million) in 2019. Established in 2010, the prime office has 28 stories on the ground and six underground with 41,598 square meters of floor area. The leasing rate has been nearly 100% every year since the acquisition, with high-quality tenants such as affiliates of SK Group, LG Group and Philips Korea.

According to Keppel REIT's website, the valuation of the property reached 305.8 billion won as of end-2023.

The surrounding areas of Seoul Station are expected to see major transportation infrastructure improvements, including mixed-use development projects and the launch of high-speed rail network GTX-A, which will connect the new town of Unjeong, Gyeonggi Province and Seoul Station from the end of this year, said JLL.

Despite tightened financial conditions due to high interest rates, the Korean real estate market is warming up with the closing of major office deals such as Blackstone’s sale of Arc Place, said Jung Jung-woo, senior director of capital markets of JLL Korea.

Investors have a selective approach to core assets in the capital. Given the strong fundamentals of the Seoul real estate market, key factors for buyers are rent growth potential and tenant composition and creditworthiness, Jung added.

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

Jihyun Kim edited this article.