[Exclusive] Why Did Amore's Eldest Son Sell the Gangnam Building Inherited from the Previous Generation?

Gangnam-gu Ssangbong Building Sold for 115 Billion KRW
900 Billion KRW Capital Gains from Asset Value Increase

Mixed Business Fortunes with Younger Brother Chairman Seo Kyung-bae
Actual Ownership and Management of Taepyeongyang Development and Jungangcheong
Annual Dividends Worth About 9 Billion KRW

Exterior view of Ssangbong Building located in Gangnam-gu. (Photo by Asia Economy)

[Asia Economy Reporter Lim Hye-seon] Seo Young-bae, chairman of Taepyeongyang Development and the eldest son of the late Seo Seong-hwan, founder of AmorePacific Group and older brother of Seo Kyung-bae, chairman of AmorePacific Group, recently sold building assets located in Gangnam, Seoul. It is reported that he realized an investment gain of approximately 90 billion KRW due to the increase in asset value. Although the sale is attributed to capital gains, industry insiders view that Seo Young-bae, who inherited the main businesses of the Taepyeongyang Group in the past, is now selling even his real estate assets as his business declines.

Chairman Seo Young-bae Sells Gangnam Building

According to the industry on the 14th, Seo Young-bae sold the Ssangbong Building located in Gangnam-gu, Seoul, to Daishin Asset Management for 115 billion KRW. This building, located at the southern end of Seongsu Bridge, was constructed in 1985. It has a land area of 2,374.8㎡ (718 pyeong) and a total floor area of 8,722.62㎡ (2,639 pyeong).

The land price per 3.3㎡ was 160.08 million KRW. As of January this year, the official land price of this building was 29.4 million KRW per 3.3㎡. Seo Young-bae purchased it in August 2002. Considering that the Gangnam building market price was around 20 million KRW per 3.3㎡ at that time, it appears he gained about eight times the capital gain. According to Realty Korea, a brokerage specializing in income-generating buildings, the transaction volume distribution in Seoul for the second quarter of this year showed that transactions were most active in the Gangnam area, with the most common price range per 3.3㎡ being between 100 million and 150 million KRW. Realty Korea analyzed that the unit price per 3.3㎡ of land increased due to continuous land price rises.

Seo Young-bae also sold a three-story detached house in Hannam-dong, which he inherited from his father, to Seo Kyung-bae. The detached house was purchased by founder Seo Seong-hwan in October 1972 and gifted to Seo Young-bae in 2002. Seven years after receiving the gift, in 2009, Seo Young-bae sold it to AmorePacific (formerly Taepyeongyang) for 17.2235 billion KRW, and AmorePacific resold it to Seo Kyung-bae in 2012 for 17.46113 billion KRW. This house is currently used as the company’s history museum, the ‘Jangwon Memorial Hall.’

Mixed Fortunes Amid the Foreign Exchange Crisis

Founder Seo Seong-hwan had two sons and four daughters with his wife Byun Geum-ju. The eldest son, Seo Young-bae, graduated from Korea University’s Business Administration Department and Waseda University Graduate School in Japan, and began his apprenticeship in 1982. The second son, Seo Kyung-bae, graduated from Yonsei University’s Business Administration Department and Cornell University’s Graduate School of Management, joining the company in 1987. At that time, Taepyeongyang diversified its businesses beyond cosmetics into finance, electronics, and metals, with 25 affiliates by the early 1990s. Founder Seo Seong-hwan handed over major businesses such as construction, securities, insurance, and metals to eldest son Seo Young-bae, and the cosmetics business to second son Seo Kyung-bae. However, Taepyeongyang suffered financial pressure due to debt guarantees for insolvent affiliates and was pushed to the brink. Seo Kyung-bae, then head of Taepyeongyang’s Planning and Coordination Office, advocated bold restructuring and actively worked to save the group. Thanks to proactive restructuring, including selling securities and insurance affiliates, Taepyeongyang narrowly survived. Seo Kyung-bae, recognized for his management skills, was ultimately chosen as the group’s successor.

Since then, Seo Kyung-bae has grown AmorePacific into a global cosmetics company. After Seo Kyung-bae’s appointment, AmorePacific’s sales increased from 646.2 billion KRW to 4.93 trillion KRW. The valuation of Seo Kyung-bae’s shares is approximately 3.2256 trillion KRW.

Seo Young-bae, who has liquidated most of his major businesses, currently manages Taepyeongyang Development, a real estate development and construction company, and Jungang Cheonggwa, a fruit consignment sales company. As of last year, Taepyeongyang Development’s sales and operating profit were 82.4 billion KRW and 2.5 billion KRW, respectively. Seo Young-bae owns 60% of Jungang Cheonggwa’s shares, with Taepyeongyang Development holding 40%, effectively making it Seo Young-bae’s personal company. Seo Young-bae receives annual dividends ranging from 5 billion to over 9 billion KRW from these two companies.