Samsung SDS HQ sale likely to be Korea's biggest real estate deal of 2023

The deal is expected to exceed $780 million; the seller will shortlist buyers and tap a preferred bidder later this year

Samsung SDS headquarters in Jamsil, Seoul (Courtesy of Samsung SDS)

Byeong-Hwa Ryu 1

2023-06-19 18:40:53 hwahwa@hankyung.com

Real estate

The sale of Seoul-based Samsung SDS Co. headquarters, which is likely to become South Korea's largest real estate market deal of 2023, is predicted to wrap up in the second half of this year as the owner shortlists potential buyers and taps a preferred bidder.

Local investment firm Ryukyung PSG Asset Management, the property's seller, has completed a bidding procedure via its private real estate investment trust (REIT), banking sources said on Monday. The firm has received applications from seven local and overseas investors for the deal, which may exceed 1 trillion won ($780 million).

Ryukyung PSG tapped four financial advisors last October: CBRE Korea and Colliers International Korea for local sales and Cushman and Wakefield Korea and Samsung Group’s security and real estate management affiliate S-1 Corp. for overseas deals.

The asset manager will interview the potential buyers and soon select a bidder for exclusive talks, sources said.

The office asset comprises two towers in Seoul's Jamsil area, adjacent to the Gangnam Business District. The building has 30 above-ground and seven below-ground floors, with 99,537 square meters of floor area on a 7,716 square meter lot.

The deal is projected to surpass Mirae Asset Global Investments Co.’s 728.4 billion won sale of AlphaDom Tower Pangyo to Samsung Life Insurance Co. and Samsung Fire & Marine Insurance Co. in April. That was followed later that same month by DWS Asset Management Co.’s 629.2 billion won divestment of the Concordian Building in Seoul to Mastern Investment Management.

Samsung SDS, an IT service unit of Samsung Group, fully rents the Jamsil-based office on a contract until 2034. The property is expected to see a 3% annual rent increase, according to industry sources.

Samsung SRA Asset Management Co. bought the real estate asset from the Korean Veterans Association for 390 billion won in 2013 and completed construction in 2014. A consortium led by Ryukyung PSG and NH Investment & Securities Co. in 2019 acquired the building for 628 billion won, which included NH REITs Management Co.’s 15 billion won investment.

Write to Byeong-Hwa Ryu at hwahwa@hankyung.com
Jihyun Kim edited this article.