Last year, Shinsegae participated in the 2 trillion won development of Gangnam Yeoksam Centerfield, a twin-tower complex, as a strategic investor. IGIS led the development on the site of the former Renaissance Hotel in southern Seoul.
The retail titan took a 25% stake in the mixed-use property for 360 billion won and opened Josun Palace, its first super-luxury hotel, in one of the buildings last year. Shinsegae also runs a high-end shopping mall "The Shops at Centerfield" in the portion of the property.
IFC SEOUL
Shinsegae and IGIS are discussing launching a real estate investment trust (REIT) to buy IFC Seoul, comprised of IFC Mall, Conrad Seoul Hotel and office space.
The REIT is likely to encompass IFC Seoul, as well as other office buildings and logistics centers leased by Shinsegae, according to sources with knowledge of the matter.
The REIT's ownership structure will likely be 49:51 between IGIS and Shinsegae as was the case in their previous two partnerships.
For IGIS, Shinsegae would be the right partner to manage and operate the shops and other facilities in the buildings it has developed so as to improve their value.
From the fundraising perspectives, Shinsegae's participation as a strategic investor could drum up interest from other investors.
For a megadeal of IFC Seoul, Korean pension funds and financial institutions remain undetermined on which of the two final bidders they would back amid doubts over the candidates’ funding capabilities.
Brookfield is planning to pick a preferred negotiator for IFC Seoul as early as this month.
If the Shinsegae-IGIS group succeeds in its bid, it will emerge as a strong rival of The Hyundai Seoul, the largest department store in Seoul which opened last year.
Both IFC Seoul and The Hyundai Seoul are at a distance of just 500 meters.
Shinsegae, the parent group of the supermarket chain E-Mart Inc. and the e-commerce arm SSG.COM, is also strengthening cooperation with IGIS beyond the real estate sector.
Recently, E-Mart has decided to join the IGIS-led purchase of a domestic meat seller OK Meat Inc. as a strategic partner.
Write to Chae-Yeon Kim at why29@hankyung.com
Yeonhee Kim edited this article
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