Daesang Group to stay put for “five more years” ... CapitaLand kicks off sale of Jongno Place [fn Market Watch]

[Financial News] Jongno Place, at 120 Changgyeonggung-ro, Inui-dong, Jongno District, Seoul, which Daesang Group has used as its headquarters building for the past five years, has been put up for sale. It is currently owned by Ascendas Asset Management, the real estate investment subsidiary of Singapore sovereign wealth fund Temasek Holdings.
According to investment banking (IB) industry sources on the 5th, CapitaLand will accept proposals through the 23rd and begin selecting a sales adviser. It aims to complete the transaction next year.
Jongno Place has a total floor area of 45,735.21 square meters and extends from seven basement floors to 14 above-ground floors. It was completed in November 2010. The building is near Jongno 5(o)-ga Station on Seoul Subway Line 1 and is reportedly fully occupied.
Daesang Group has used Jongno Place as its headquarters since the end of 2021. It left its former headquarters in Sinseol-dong, Seoul, which it had used for 48 years, and moved into the building. In the second half of this year, it dropped plans to move to ONE GROVE in Magok and decided to remain at Jongno Place.
Daesang Group reportedly extended its lease by five years before the existing lease was due to expire.
Jongno Place was bought in advance by a Hong Kong-based private equity fund before its completion in 2007, and Korea Investment Management Co., Ltd. managed the fund. When the building was put up for sale in 2014, KB Real Estate Trust was selected as the preferred bidder, but the deal fell through.
An IB industry source said, “Daesang Group’s withdrawal of its relocation plan and commitment to a long-term lease are favorable factors for the seller. However, apart from the stable rental income, whether a price can be reached that meets the yields buyers are seeking will be key to whether the deal goes through.”
Meanwhile, CapitaLand acquired the office in 2015 for about 240 billion won, when it was operating as the former Ascendas Asset Management. It set up a private real estate fund with a seven-year term and brought in investors including the Korea Teachers’ Pension, the Local Government Officials Development Association and Lotte Insurance.
In the third quarter of 2022, as the fund reached maturity, CapitaLand reacquired Jongno Place through a share deal that transferred the existing investors’ stakes to Samsung Fire & Marine Insurance. A share deal keeps the fund that owns the building in place and changes only the investors. The transaction price at the time was about 330 billion won, or around 24 million won per 3.3 square meters. Eight companies took part in the bidding, including Meteus Asset Management, Samsung Fire & Marine Insurance, NH NongHyup REITs Management, NH Investment & Securities, KORAMCO REITs Management and Trust, and Korea Investment Real Estate Trust.


[email protected] Kang Gu-gwi Reporter