[Exclusive] CBD Prime Office Put Up for Pre-Sale [fn Market Watch]

[Financial News] A prime office building planned for Seoul’s Central Business District (CBD) has been put up for pre-sale about two years before its scheduled completion. The property is the office building in Zone 6-3-3 of the Sewoon area, developed by Dblock Group (formerly Hanho Construction Group). With a large volume of office space set to enter the CBD market from 2028 onward, the strategy is seen as an effort to attract global investors, ease concerns about oversupply and raise the sale price.
According to investment banking (IB) industry sources on the 22nd, The Unistar Third, the project implementer for Zone 6-3-3 of the Sewoon area, sent a request for proposals (RFP) for “Sales Advisory Services for the Urban Renewal Redevelopment Project in Zone 6-3-3 of the Sewoon Renewal Promotion District” to major advisory firms. It plans to select multiple advisers through competitive bidding.
The property being offered for sale will be built on a 5,801-square-meter site around 310-2 Euljiro 4(sa)-ga, Jung-gu, Seoul. It will have eight basement levels and 32 floors above ground, with a gross floor area of 88,218 square meters. Its floor area ratio will reach 1,419%. The office building is tentatively named Tower E and, by gross floor area, will be similar in size to Samsung C&T Corporation’s Seocho Tower, Donuimun D-Tower and Yeouido The K Tower.
The project has faced a number of twists and turns. The original plan called for an eight-basement, 20-story development named Sewoon Prugio The Botanic, with 198 urban-type residential units and officetels. But as market conditions for sales worsened, the development plan changed. Then, after the site was rezoned from a general commercial area to a central commercial area in 2024, development of a prime office building began.
In August of the same year, Daewoo Engineering & Construction Co., Ltd. won a 313.5 billion won contract to build the office building. The contract period is 42 months from the actual start of construction. The company was reportedly involved in the project financing (PF) structure on the condition that 20% of the construction costs would be paid on a subordinated basis. Construction is scheduled to begin in February 2025, with completion expected in August 2028. Woori Asset Trust is overseeing the project as the ordering party under a management-type land trust arrangement.
IB industry sources view the deal as effectively a forward sale. Securing a buyer by signing a sale and purchase agreement in advance would reduce risks for the PF lender group and ease concerns about vacancies after completion.
The supply outlook for the CBD is a key market variable. CBRE Korea has warned that oversupply could emerge in the CBD from 2028. The projected supply is estimated at 78% of current inventory. Al Square has also forecast that the CBD vacancy rate could rise to double digits over the next five years.
Dblock Group plans to respond by differentiating the building. It is aiming for the highest level, Platinum, in the U.S. Green Building Council’s (USGBC) Leadership in Energy and Environmental Design (LEED) green-building certification. The exterior was designed by Dutch firm UNStudio, while DA Architecture is responsible for the main design.
James Corner Field Operations, the firm that designed New York City’s High Line park, will handle the landscaping, creating a design that connects with open green spaces. The design is seen as taking into account the environmental, social and governance (ESG) investment standards of global institutional investors.
An IB industry source said, “Overseas pension funds and sovereign wealth funds are expected to show interest because this is an opportunity to secure a newly built prime office in the CBD before completion,” adding, “However, with a wave of supply expected from 2028 onward, the price will vary significantly depending on the sale terms, including lease commitments.”
[email protected] Kang Gu-gwi Reporter