Fierce competition to advise on sale of BODYFRIEND headquarters building [fn Market Watch]

[Financial News] Competition is fierce to win the advisory role for the sale of the Seoul office building in Dogok-dong that serves as BODYFRIEND’s headquarters. Formerly used as STX Group’s headquarters and R&D center, the asset is expected to draw interest as it is steeped both in the success of Kang Deok-soo, the group’s former chairman, and in the group’s breakup.
According to the investment banking (IB) industry on the 14th, Pacific Investment Management heard presentations the previous day from candidates to advise on the sale of BODYFRIEND Dogok Tower at 448-2 Dogok-dong, Gangnam-gu, Seoul, and will select an adviser soon. About six firms, including CBRE Korea, Colliers Korea, NAI Korea, RSQUARE and Samjong KPMG, are said to have participated in the presentations.
Pacific Investment Management owns the asset through Pacific No. 8 Corporate Restructuring Real Estate Investment Company. The sale marks an exit 11 years after it acquired the property from STX Group for 56 billion won in 2015. The plan is to step up the sale process in November, conduct preliminary due diligence and bidding from December through January next year, and close the deal in March next year.
BODYFRIEND Dogok Tower is an office building completed in 1992, with four basement levels and eight above-ground floors. It has a site area of 3,364.20m2 and a total floor area of 22,316.77m2, comprises a main building and an annex, and is adjacent to Yangjaecheon Stream. In 2015, BODYFRIEND moved its headquarters to the former STX R&D center to consolidate departments that had been scattered across Seoul. Since then, it has used the site as a multifunctional headquarters combining office space with employee amenities and customer experience facilities.
The building is also an asset that symbolizes the rise and fall of STX Group. Founded by Kang in 2001, the group grew to rank among Korea’s top 20 business groups by successively acquiring companies in shipbuilding, shipping and energy, and its Dogok-dong headquarters served as a base for its rapid early growth. After major affiliates moved to STX Namsan Tower in 2007, the building was converted into an R&D center.
However, as the group faced a liquidity crisis amid a downturn in the shipbuilding and shipping industries and financial pressures from aggressive mergers and acquisitions (M&A), the Dogok-dong R&D center was also sold as part of a self-rescue plan. Pacific Investment Management’s acquisition was a transaction at which two companies’ turning points intersected: STX’s restructuring of its assets and BODYFRIEND’s growth.
The key factors in the sale are considered to be BODYFRIEND’s lease terms and plans for future use of the property. While its status as a rare single-headquarters building in the Gangnam area with a total floor area of more than 20,000m2 is an advantage, its age—more than 30 years since completion—means future capital expenditure (CAPEX) and remodeling costs are also expected to be reflected in the price.
A senior figure in the IB industry said, “Listings of single-headquarters buildings of this size in the Gangnam area are uncommon,” adding, “Ultimately, how investors assess BODYFRIEND’s remaining lease term, rent level and future CAPEX burden will determine their price expectations.”
[email protected] Kang Gu-gwi Reporter