[Exclusive] BODYFRIEND Headquarters Building to Change Hands for the First Time in 11 Years [fn Market Watch]

[Financial News] The owner of the office building in Dogok-dong, Seoul, used as BODYFRIEND’s headquarters is expected to change for the first time in 11 years. The property was formerly used as STX Group’s headquarters and research and development center. It is drawing attention because it is an asset associated with former STX Group Chairman Kang Duk-soo’s rise and the group’s eventual breakup.
According to investment banking industry sources on the 11th, Pacific Investment Management is pursuing the sale of BODYFRIEND Dogok Tower at 448-2 Dogok-dong, Gangnam-gu, Seoul. It plans to receive proposals from potential sale advisors by October 6 and select the preferred negotiating advisor on October 13.
Pacific Investment Management owns the asset through Pacific 8 CR-REIT. The planned sale marks an exit, or realization, 11 years after it acquired the property from STX Group for 56 billion won in 2015. The sale process is scheduled to accelerate in November, followed by preliminary due diligence and bidding from December through January next year, with the transaction expected to close in March next year.
BODYFRIEND Dogok Tower is an office facility completed in 1992, with four basement levels and eight floors above ground. It has a site area of 3,364.20 square meters and a total floor area of 22,316.77 square meters. The property consists of a main building and an annex and is located near Yangjaecheon Stream. BODYFRIEND moved its headquarters to the former STX research and development center in 2015 to consolidate departments that had been scattered across Seoul. Since then, it has used the property as a multifunctional headquarters combining office space with employee welfare facilities and customer-experience functions.
The building also symbolizes STX Group’s rise and fall. Founded by Kang Duk-soo in 2001, STX Group grew into one of Korea’s 20 largest conglomerates by successively acquiring shipbuilding, shipping, and energy companies. The Dogok-dong headquarters served as a base for the group’s rapid early growth. After major affiliates moved to STX Namsan Tower in 2007, the building was converted into a research and development center.
However, as the group faced a liquidity crisis due to a downturn in the shipbuilding and shipping industries and the financial burden of aggressive mergers and acquisitions, the Dogok-dong research and development center was sold as part of a self-help plan. Pacific Investment Management’s acquisition was a transaction at which two companies’ turning points intersected: STX’s asset restructuring and BODYFRIEND’s growth.
The key factors in the sale are expected to be BODYFRIEND’s lease terms and the property’s future use. Although single-tenant headquarters buildings of more than 20,000 square meters in the Gangnam area are rare, the building is more than 30 years old. Future capital expenditures and remodeling costs are therefore also expected to be reflected in the price.
A senior investment banking industry official said, "Single-tenant headquarters properties of this size are rare in the Gangnam area." The official added, "Ultimately, how investors assess BODYFRIEND’s remaining lease term, rent level, and future capital-expenditure burden will determine their price expectations."
[email protected] Kang Gu-gwi Reporter