Samsung SDS Tower sold for US$630 mil, largest deal in South Korea to date year

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Sungwook Cho, the managing director and head of capital markets of Colliers Korea, has led his team to the largest single-asset office transaction in the Asia Pacific region so far this year. The team has sold the Samsung SDS Tower to KB Asset Management for US$630 million ($860 million).

At 1,071,407 sq ft, the property is located in the extended area of the Gangnam Business District and marks the largest trade of 2020 in the South Korean market. The sale had begun in the second half of 2019, highlighting Cho’s team’s capabilities and commitment to seek out a suitable buyer for the large transaction, amid a subdued commercial real estate market.

In May, Cho’s team closed three major deals with a combined value of US$780 million. Munjeong Plaza, Donghwa Building and Namsan Green Building were the only major transactions made in the main business districts of Seoul at the time.

Colliers Asia Pacific managing director of global capital markets Chris Pilgrim commends the team’s determination and commitment that secured a suitable buyer for the prime commercial office property. Pilgrim believes that this transaction has a lot of potential for further investment in prime-rate buildings in the Korean market.

Cho himself is delighted with the outcome, saying he is “incredibly proud” of his team’s achievement. He believes that KB Asset Management’s acquisition of the Samsung SDS Tower was indeed a smart investment move as it secures a steady cash flow from the use of the building as a headquarters. This factor also helped to attract major Korean investors to the deal.

The successful sale of the Samsung SDS Tower is indicative of the potential of commercial real estate in South Korea and further afield in the Asia Pacific region. With more investments expected to accelerate in 2021, the industry appears to still be strong despite the challenges of the pandemic.