- Curios Korea Capital Team Closes Large-Scale Seoul Commercial Real Estate Deal
- Strong Domestic Commercial Real Estate Demand Proven Despite High Interest Rates and Economic Uncertainty
Global real estate consulting firm Colliers Korea announced that it completed three major commercial real estate transactions in May 2023, totaling approximately 1 trillion KRW (780 million USD) in big deals.
The three major transactions involved the sale of Munjeong Plaza, Donghwa Building, and Namsan Green Building in Seoul, with a total transaction area of 20,487 square meters. These large-scale commercial real estate deals, conducted amid high interest rates and uncertain economic conditions, demonstrated a positive outlook and strong demand in the domestic commercial real estate market.
Located in the Gangnam Business District (GBD) of Seoul, Munjeong Plaza was sold to developer Donghun. Munjeong Plaza was acquired by the KT Group from GS Construction in 2013. The building was operated by GS Construction through GS Retail as GS Mart and GS Square, but in 2010, GS Group sold its mart and department store business to Lotte Shopping. Currently, Lotte Mart Songpa Branch is the tenant. Although Munjeong Plaza faced challenges as a mixed-use complex consisting of retail and office spaces, it succeeded in the sale thanks to favorable surrounding developments.
Donghwa Building, completed in 1970 and scheduled for redevelopment, faced uncertainty after a failed purchase in February due to rising interest rates but was successfully sold to JB Financial Group in May. JB Financial Group plans to redevelop the 19-story office building and relocate its subsidiaries currently scattered across Yeouido and Gangnam into the building.
Namsan Green Building, sold to private equity fund KKR, is an office building near Seoul Station with a total floor area of 57,574 square meters, completed in 1994. It is currently used by SK Telecom’s subsidiaries and SK Broadband’s headquarters. Located near key transportation hubs such as Seoul Station and the Seoul Station Bus Transfer Center, Namsan Green Building is planned to undergo extensive renovations over the next 3 to 4 years before being re-leased. This transaction confirmed the strong demand in the domestic office market despite limited supply.
Jung Seong-wook, Executive Director of the Capital Team at Colliers Korea, who successfully closed the three transactions, stated, “Through these successful deals, we have demonstrated the positive changes in the Korean commercial real estate investment environment. The total 1 trillion KRW transaction completed in May represents an important momentum for the Korean commercial real estate market, indicating a positive shift in investment despite the challenging environment caused by high interest rates and construction costs.”
Robert Wilkinson, CEO of Colliers Korea, said, “The fundamentals of Korea’s commercial real estate remain solid. Especially in Seoul, vacancy rates are the lowest compared to major global cities, and demand is strong. The Colliers Korea Capital Team successfully completed large-scale transactions this month, showing investors that there are still many opportunities in the Korean commercial real estate market despite the high interest rate environment.”
Christopher Pilgrim, Managing Director of APAC Global Capital Markets, said, “Colliers continues to accelerate client success based on deep market understanding and a commitment to delivering value to clients. We will continue to leverage market insights and expertise to capture opportunities and provide solutions that exceed expectations.”
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