[Exclusive] BODYFRIEND Headquarters Building to Change Hands After 11 Years [fn Market Watch]

[Financial News] The office building in Dogok-dong, Seoul, used as BODYFRIEND’s headquarters, is expected to change hands after 11 years. Formerly used as STX Group’s headquarters and research and development center, the property is drawing attention because it is an asset intertwined with former STX Group Chairman Kang Duk-soo’s success and the group’s 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 sales advisers by October 6 and select a preferred negotiating adviser on October 13.
Pacific Investment Management owns the asset through Pacific 8 Corporate Restructuring Real Estate Investment Company. This marks its exit, or realization of the investment, 11 years after acquiring the property from STX Group for 56 billion won in 2015. The sale process will accelerate in November, with preliminary due diligence and bidding scheduled from December through January next year, followed by the closing of the transaction in March next year.
BODYFRIEND Dogok Tower is an office facility completed in 1992, comprising four basement levels and eight floors above ground. With a site area of 3,364.20 square meters and a total floor area of 22,316.77 square meters, it consists of a main building and an annex and is located near the Yangjaecheon stream. BODYFRIEND moved its headquarters there in 2015 to consolidate departments that had been scattered across Seoul. Since then, it has used the property as an integrated headquarters combining office space with employee welfare facilities and customer-experience functions.
The building is also an asset symbolizing the rise and fall of STX Group. 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 the downturn in the shipbuilding and shipping industries and the financial burden from aggressive mergers and acquisitions (M&A), the Dogok-dong research and development center was sold as part of a self-rescue plan. Pacific Investment Management’s acquisition was therefore 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 property is more than 30 years old, so future capital expenditures (CAPEX) and remodeling costs are 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, investors’ price expectations will be determined by how they assess BODYFRIEND’s remaining lease term, rent levels, and future CAPEX burden."
[email protected] Kang Gu-gwi Reporter