Daehan Sugar Reworks How It Uses Prime Seoul Real Estate... Reviews Value-Enhancement Plans for Three Sites in Jamsil and Yeoksam [fn Market Watch]

[Financial News] Daehan Sugar is reworking its strategy to enhance the value of long-held real estate in Jamsil, Pil-dong and Yeoksam in Seoul. Rather than simply assessing the development potential of each building, the company is drawing up a new plan that treats the three properties as a single portfolio and resets the role and medium- to long-term use of each asset.
According to the investment banking industry on the 26th, Genstar Mate recently won a consulting contract from Daehan Sugar to establish development strategies and analyze the business feasibility of three Seoul properties it owns.
The assets are the Daehan Sugar Building in Sincheon-dong, Songpa District; Dongin Building in Pil-dong, Jung District, Seoul; and Plaza Building in Yeoksam-dong, Gangnam District. Among them, the Daehan Sugar Building is an office facility with a total floor area of about 32,300 square meters. The three properties are located in the Jamsil, Pil-dong and Eonju-ro areas, respectively, and differ in location, size and current use.
The key focus of the consulting project is not whether each asset should be developed, but how to find the best combination for Daehan Sugar's Seoul properties. Genstar Mate plans to review market demand, development potential, business feasibility, as well as construction and permitting conditions, before presenting medium- to long-term utilization scenarios for each asset.
The industry is paying attention to a growing trend among companies to turn long-held real estate from simple non-operating assets into strategic assets that can raise corporate value. In particular, for prime locations in Seoul, asset value and profitability can change significantly depending on whether the existing use is maintained or redevelopment and remodeling are pursued.
An official in the real estate investment banking industry said, "In the past, it was common for companies to sell or develop their real estate individually, but recently more cases are emerging in which firms decide on utilization plans by looking at the capital efficiency of the entire portfolio." The official added, "If multiple assets in different locations are analyzed at the same time, it becomes easier to set development priorities and establish holding and utilization strategies more clearly."
Meanwhile, Genstar Mate will deploy its R&C division consulting team, research center and asset strategy division VA team for the project. The company plans to combine market data and development feasibility analysis with construction and permitting reviews to assess whether the plans can be carried out in practice.
Kim Gyu-jin, head of Genstar Mate's R&C business division, said, "Real estate owned by companies differs in location, physical conditions and business feasibility, so it is difficult to find the optimal use with a single standard." He added, "We will come up with practical ways to enhance value by comprehensively considering the characteristics of each Daehan Sugar asset and the overall portfolio."
[email protected] Kim Kyung-a Reporter