Despite challenging market conditions, Mirae Asset Global Investment has sold the Alphadom Tower building in Seoul to Samsung SRA for 691 billion South Korean won (US$516 million).

The prime office building – located in Pangyo, Seoul’s fourth major business district – comprises a gross floor area 87,901.58 square metres set across both office and retail space. The property is 97% occupied (100% of the office is occupied) by blue-chip tenants and the office building is anchored by Kakao, one of South Korea’s leading technology conglomerates.

Alphadom Tower was completed in 2018 and serves as an anchor location for the Pangyo business district, commonly referred to as the Silicon Valley of Korea. The area is also an essential research and development hub of bio-, nano- and culture technology, all of which are rapidly becoming key drivers of the country’s economy, underscoring the property’s attractiveness to investors.

The deal, in which global commercial real estate and investment management company JLL acted as sole sales adviser, is significant given the sharp rise in basis interest rates has raised funding costs and increased uncertainty. The volume of office transactions in the second half of the year, according to JLL analysis, is expected to decrease year on year as liquidity dries up in the market. Furthermore, the firm expects that Pangyo will remain a landlord favoured market due to limited new supply.

“The closing of Alphadom Tower represents one of the most significant office building transactions in Korea this year,” says Chae Hun Chang, managing director at JLL Korea. “Even in extremely challenging financial market conditions, this transaction showed that a prime office building in a core location is still attractive and can solicit investors. Additionally, strong interest from international and domestic investors in Alphadom Tower proves that investors remain confident in the strong market fundamentals and long-term growth story of core office buildings in Korea.”