This article was published on April 21, 2025, at 10:23 a.m. on the ChosunBiz MoneyMove site.
ARA Korea Asset Management, a Singaporean asset management firm, is pursuing the sale of Seoul Square, which is valued at around 1 trillion won. Seoul Square, famous as the 'Baekgrae Building' from the drama, is considered a landmark office building near Seoul Station.
According to the investment banking (IB) industry on the 21st, ARA Korea Asset Management is preparing to sell Seoul Square, a prime-grade office located in Jung-gu, Seoul. It has been confirmed that they have sent requests for proposals (RFP) to multiple real estate advisory firms. ARA Korea Asset Management plans to select a sale manager soon and begin the formal process.
Completed in 1977, Seoul Square is a large office asset with 2 basement levels and 23 above-ground floors, covering a total floor area of 132,806 square meters. Previously used as the headquarters of Daewoo Group, it was renamed to Seoul Square after the group was dissolved. Following a major remodeling in 2010, Seoul Square has attracted numerous corporations and is recognized as a representative trophy asset in the central business district (CBD).
Located in front of Seoul Station, Seoul Square is praised for its excellent transport convenience, utilizing internal corridors to connect to Subway Lines 1 and 4, the Gyeongui Line, and the Airport Railroad, as well as KTX and GTX-A lines. After 11Street moved its headquarters due to management difficulties last year, the leasing rate currently stands at 79.3% as of the end of last month. Currently, domestic conglomerates such as SK Shipping, Kyobo Life Insurance, and KG Steel, as well as foreign companies like WeWork, Mercedes-Benz, and ExxonMobil are tenants.
Previously, ARA Korea Asset Management acquired Seoul Square from NH Investment & Securities for 98,828,040,000 won in March 2019. The price per 3.3 square meters was around 24,600,000 won. At that time, NH Investment & Securities also resold 410 billion won worth of Seoul Square revenue securities to major domestic institutional investors like Samsung Fire & Marine Insurance, the National Agricultural Cooperative Federation, and the Military Pension Fund. NH Prime REIT, a listed real estate investment trust (REIT) on the Korea Composite Stock Price Index (KOSPI), also acquired a Class 1 revenue security at that time.
The push for the sale of Seoul Square by ARA Korea Asset Management is due to the approaching maturity of a real estate fund set up for its acquisition. The management period for the 'ARA Korea Specialized Investment-type Private Real Estate Investment Trust No. 1' that owns Seoul Square lasts until February 28 of next year. An industry source noted, "With about 10 months left until the fund's maturity date and expectations for interest rate cuts overlapping, investor sentiment towards commercial real estate is reviving," adding, "However, it is regrettable that they have not yet reduced the vacancy left after 11Street departed."
Recently, transaction prices for CBD offices have formed a level of 35,000,000 won per 3.3 square meters. At the end of last year, the D Tower Donuimun, sold by Mastern Investment Management to NH NongHyup REITs Management, was sold for 895.3 billion won (34,330,000 won per pyeong). The G1 office in Gongpyeong-dong, which is currently being pre-sold, is said to be seeking prices in the upper 40 million won range per pyeong. If the sale price of Seoul Square exceeds 1 trillion won, it is expected to be considered the best catch of the year.
However, there are many prime-grade office buildings on the market, such as the 'Signature Tower' in Euljiro, currently used as headquarters by Kumho Petrochemical, and as new supply is lined up in the future, it is suggested that the outcome should be closely monitored.