a freehold 15-story office building in Seoul, South Korea, with a KRW220 billion acquisition price
Read related post: Based on the built-up area, the suggested price comes to $6,010 per square foot
Keppel Corporation, on Dec 19 announced that it is planning to purchase Samhwan Building, a freehold 15-storey office building within Seoul, South Korea, with a price that is KRW220 billion ($228.7 million).
Keppel Land Limited, Keppel Asia Macro Trends Fund IV (KAMTF IV) and KB Bank Discretionary Fund, have signed shareholders’ agreement (SHA) together with the joint venture firm (JVCo), Gaenari (IV) and Gaenari (IV) in connection with the acquisition proposal.
KAMTF IV and KB Bank Discretionary Fund are administered through Alpha Investment Partners Limited and Keppel Investment Management Co., Ltd respectively. Alpha Investment Partners and Keppel Investment Management Co. are wholly owned companies from Keppel Capital Holdings.
As part of the SHA, Keppel Land and KAMTF IV will subscribe for shares in the JVCo and will hold shares of 55.93% and 44.07% respectively. The two Keppel Land as well as KAMTF IV will also extend shareholders’ loans totalling approximately US$113.2 millions ($153.8 millions) in the JVCo and will make an additional financing commitment of as much as US$4.84 million, proportional to their shareholding interests in the purchase of the property.
Following the successful completion of the deal and is expected to take place before Christmas Keppel Land will hold a 39.5% effective interest in Samhwan Building, while the remaining 31.1% and 29.4% effective stakes will be purchased through KAMTF IV and KB Bank Discretionary Fund respectively.
After the property has been purchased and the necessary regulatory approval has been obtained, Keppel will conduct asset enhancement initiatives (AEIs) that include the horizontal extension to extend the building’s office space. The renovation of the existing space is also planned in an effort to boost the value of the property.
Samhwan Building currently has a total gross floor area (GFA) of 31,403 square meters. It is situated at the heart of Seoul’s downtown business district (CBD) located in Jongno-gu and is surrounded by Korean palaces on The UNESCO World Heritage List. The building has breathtaking views of the surrounding. It’s a walk of three minutes away from Anguk Station on the Seoul Subway line 3 and is a 30-minute drive from the other important business areas in Gangnam as well as Yeouido located in Seoul.
Keppel in its announcement the company has stated that they is integrating sustainable features, like high-performance facades for buildings, energy-efficient heating and cooling systems and smart lighting systems. Indoor environmental monitoring, as well as intelligent building controls, which will enhance the efficiency of the building’s operation and performance.
“Keppel Land is delighted to grow in South Korea through the acquisition of Samhwan Building in partnership with the private funds of Keppel Capital. The partnership investment will not only leverage Keppel’s strengths in real estate services and asset management, but is also a boost to Keppel’s asset light business model, which makes use of the funds of third parties to grow,” says Louis Lim as the chief executive officer of Keppel Land.
“When the refurbishment work is completed, Samhwan Building will be an iconic symbol within South Korea of Keppel Land’s Sustainable Urban Renewal capabilities, that utilize digital technology to retrofit, ensure future-proofing and prolong the life of commercial buildings.” Lim adds.
“As the main financial and business center for South Korea, Seoul has witnessed a growing demand for high-quality office space within the city. We are delighted to work with Keppel Land in the purchase of Samhwan Building, a uniquely placed prime asset located within the business district in the center, that is well-positioned to meet the increasing demand. Keppel Capital has managed close to $3.4 billion worth of assets with a gross floor space of 6.2 million square feet across South Korea since 2004, and we’re certain that our knowledgeable team with active asset management in the field and strong value creation strategies will allow us to create high returns for our fund as clients,” says Christina Tan the chief executive officer of Keppel Capital.
Keppel Corp. Shares Keppel Corp closed at $7.33 on December 16.