Colliers tapped to advise on sale of BODYFRIEND headquarters building as search for new owner gathers pace [fn Market Watch]

[The Financial News] The sale of the Seoul office building in Dogok-dong used as BODYFRIEND’s headquarters is gathering pace, following the selection of a sale advisory firm. Once the headquarters and R&D center of STX Group, the property is expected to attract interest as an asset closely tied both to the success of Kang Deok-su, former chairman of STX Group, and to the process of the group’s breakup.
According to investment banking (IB) industry sources on the 19th, Pacific Investment Management selected Colliers Korea as the sale advisor for BODYFRIEND Dogok Tower at 448-2 Dogok-dong, Gangnam-gu, Seoul. The appointment followed competition among six firms that took part in presentations (PT), including CBRE Korea, NAI Korea, RSQUARE and Samjong KPMG.
The BODYFRIEND side is also said to have taken part in the presentation to select a sale advisor. It is reportedly keeping various options open to help ensure a successful sale, including allowing flexibility in the lease term.
Pacific Investment Management holds the asset through Pacific No. 8 Corporate Restructuring Real Estate Investment Company. It is an exit, or realization, 11 years after the property was acquired from STX Group in 2015 for 56 billion won. 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 transaction in March next year.
BODYFRIEND Dogok Tower is an office building completed in 1992, with four basement floors and eight above-ground floors. It has a site area of 3,364.20 square meters and a gross floor area of 22,316.77 square meters, consists of a main building and an annex, and is adjacent to Yangjaecheon Stream. In 2015, BODYFRIEND moved its headquarters to the former STX Corporation R&D Center to bring together departments that had been scattered across Seoul. Since then, it has used the property as a combined headquarters incorporating employee welfare and customer-experience functions into its office space.
The building also symbolizes the rise and fall of STX Group. Launched by former Chairman Kang in 2001, STX Group grew to rank among the country’s top 20 business groups by successively acquiring companies in shipbuilding, shipping and energy. The 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 shipbuilding and shipping and the financial burden of 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 corporate turning points intersected: STX Corporation’s asset restructuring and BODYFRIEND’s growth.
The key factors in the sale are considered to be BODYFRIEND’s lease terms and plans for the property’s future use. The building is a rare single-headquarters property in the Gangnam area with a gross floor area of more than 20,000 square meters, but as more than 30 years have passed since its completion, future capital expenditure (CAPEX) and remodeling costs are also expected to be reflected in the price.
A senior figure in the IB industry said, “Properties offering a single headquarters of this size in the Gangnam area are rare,” 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