IGIS Asset Management has been selected as the new owner of K-Twin Tower, a prime office building in Seoul's Gwanghwamun district valued at an estimated 1 trillion won. The firm's strategy of bundling the property with the adjacent Twin Tree Tower to operate the two assets in front of Gyeongbokgung Palace as a single cluster was reportedly highly regarded.
According to the investment banking (IB) industry Thursday, Cushman & Wakefield Korea, the sale manager for K-Twin Tower, recently selected IGIS Asset Management as the preferred bidder following a main bidding round. The seller is Samsung SRA Asset Management.
More than five firms participated in the bidding, including IGIS Asset Management, Mastern Investment Management, Koramco Asset Management, Hyundai Marine & Fire-affiliated Hyundai Heim Asset Management, and NH Nonghyup REITs Management. All three of the "I-Ma-Ko" firms considered Korea's top three real estate managers took part, but IGIS Asset Management emerged as the final winner.
The adjacent Twin Tree Tower is an asset already owned and managed by IGIS Asset Management. K-Twin Tower and Twin Tree Tower are connected by foot and located in effectively the same block. Both assets also hold permanent view rights facing Gyeongbokgung Palace and Songhyeon Green Plaza. As they face the palace and green space, the likelihood of the views being obstructed in the future is low.
According to the industry, it is uncommon even in the Gwanghwamun district to find two prime assets combining both adjacency and permanent views standing side by side within a single block. Once the acquisition is completed, the two assets will be combined into a single cluster comprising a total of four buildings with a gross floor area of approximately 140,000 square meters.
The asset value enhancement strategy following the acquisition has also reportedly been detailed. The plan is to unify the management systems for property management (PM), facility management (FM), and parking, and to rebrand under a single brand to simultaneously improve tenant convenience and operational efficiency. The firm is reviewing the expansion of idle space in the lower floors to secure additional leasable area, and is examining the possibility of changing usage to tourist accommodation and retail facilities. The lower-floor retail plan calls for diversifying the composition with F&B and healthcare offerings, aiming to both attract foot traffic and expand rental income.
K-Twin Tower is a prime office building located at 50 Jongno 1-gil, Jongno-gu, Seoul. Completed in 2012, it consists of six basement floors and 16 above-ground floors, with a gross floor area of approximately 83,899 square meters, divided into Building A and Building B. Its major tenants include Microsoft Korea, Woori Card, and the Jongno-gu Office, and its occupancy rate is 100%.
In 2014, K-Twin Tower was acquired for 500 billion won, or 19.7 million won per 3.3 square meters (pyeong), by U.S. private equity fund Kohlberg Kravis Roberts (KKR), Hong Kong-based Lim Advisors, and the Korea Teachers' Credit Union. It was subsequently purchased by Samsung SRA Asset Management for 700 billion won in 2017. In this bidding, IGIS Asset Management reportedly offered more than 41 million won per 3.3 square meters.
Going forward, the acquisition will be completed through due diligence and the signing of a main contract. "Cases where prime offices of K-Twin Tower's caliber come up for sale are themselves uncommon," an IB industry official said. "The strategy of bundling it with an adjacent asset and operating it as a cluster is an unusual approach even in the domestic prime office market."
