Koramco "Sale of The Asset... 398 Billion KRW Profit"

Koramco Asset Trust announced on the 30th that it successfully completed the transaction by receiving the remaining payment for the sale of Samsung Fire & Marine Insurance Seocho Office Building ‘The Asset’ from Samsung SRA Asset Management. The sale price was 1.1042 trillion KRW, marking the largest commercial real estate transaction this year.

The Asset is an office building with a total floor area of 81,117㎡ (approximately 24,538 pyeong) that Koramco acquired from Samsung C&T by establishing the KOKREIT No.43 REIT in 2018. Located at the intersection of Gangnam-daero and Teheran-ro, it is uniquely connected directly to Gangnam Station on Subway Line 2 and the Shinbundang Line, making it a distinguished asset recognized as a representative trophy asset in Korea. This building, along with Samsung Life Insurance (Building A) and Samsung Electronics (Building C), forms the Samsung Town in Seocho-dong, serving as a core office for Samsung.

Koramco conducted a sale bidding for The Asset in July, about a year before the maturity of KOKREIT No.43 REIT. Through two rounds of bidding and individual negotiations with a shortlist, Samsung SRA Asset Management was selected as the preferred negotiator. At that time, Samsung SRA Asset Management demonstrated strong confidence in closing the deal by making a one-time payment of a 20 billion KRW performance bond without any return conditions and fully accepting Koramco’s transaction terms.

The final transaction price was 45 million KRW per 3.3㎡ (pyeong), totaling 1.1042 trillion KRW. This far exceeded the industry’s initial expectation of the low 40 million KRW range per 3.3㎡ at the start of the sale. The unexpected high interest was due to a large number of bidders, including strategic investors (SI), financial investors (FI), and overseas asset managers, totaling eight potential buyers.

Through this transaction, Koramco generated a return of approximately 15%, which is double the target internal rate of return (IRR). It earned about 276 billion KRW in capital gains alone and will pay investors a total profit of 398 billion KRW, including dividends over the six-year investment period.

In particular, the Housing and Urban Fund, the largest shareholder of KOKREIT No.43 REIT, recorded an investment performance of about 200 billion KRW, nearly double its invested capital, combining approximately 140 billion KRW in capital gains and past dividends.

Yoon Jang-ho, Vice President of Koramco Asset Trust, who oversaw the investment and sale of The Asset, said, “There were concerns about the high purchase price at the time of acquiring The Asset, but this achievement was made possible by investors such as Mirae Asset Global Investments and the Housing and Urban Fund, who believed in the opportunity to acquire a trophy asset that cannot be seen again in the Gangnam area and Koramco’s capabilities, which have never lost the industry’s number one position since the introduction of the REIT system.” He added, “Our job going forward is to continuously discover good deals and deliver results that exceed investors’ expectations.”