Pangyo Tech One is back on the market after two years, drawing intense attention as its sale price is expected to serve as a key benchmark for the Pangyo office market. While many expect the price to settle in the low USD 9,075 per square meter range, some remain skeptical.

As of March 31, sources in the commercial real estate industry said Mirae Asset Global Investments held a competitive presentation on March 28 to select a sales advisor for the Pangyo Tech One transaction.

Most advisory firms proposed valuations in the early USD 9,075 per square meter range, aligning with the seller's expectations. With a gross floor area of 197,236.69 square meters, the asset is expected to fetch between USD 1.3 billion and USD 1.37 billion.

Located at 534 Baekhyeon-dong, Bundang-gu, Seongnam, Pangyo Tech One is a large-scale office building with B7-15F, and is considered a trophy asset due to its direct connection to Pangyo Station.

The building is held by Mirae Asset through its Private Real Estate Investment Trust No. 62, which matures in 2027. Naver once held a 45% stake in the fund after investing USD 141.8 million, but sold its interest to Singapore's GIC in 2023 for USD 252.8 million.

Anchor tenants include Naver and Kakao, with Naver subleasing part of its space to Hyundai Motor Company.

Recent Comparable Transactions

Recent Pangyo office deals include AlphaRium Tower and AlphaDom Tower. AlphaRium Tower, with a gross floor area of 112,254 square meters, was acquired by Mastern Investment Management from ARA Korea in January 2022 for USD 737 million—equating to USD 9,075 per square meter.

That transaction occurred just before interest rates began to rise, marking the market's pricing peak.

Since the latter half of 2022, office prices in both Seoul and Pangyo have been declining. In April 2023, AlphaDom Tower was acquired by Samsung SRA Asset Management for USD 499.6 million, or USD 7,868 per square meter.

Now, opinions are split: some believe Pangyo Tech One, as a prime asset, could surpass the price of AlphaRium Tower. Others argue that amid ongoing market liquidity issues, it's unlikely a nearly USD 1.4 billion asset will trade above USD 9,075 per square meter.

As a result, industry watchers are keeping a close eye on the final sale price.

One industry insider said, "New tenants at AlphaRium Tower and Greats Pangyo are moving in at NOC (Net Operating Cost) rents in the mid-USD 89 per square meter range. Since Pangyo Tech One is still in the mid-USD 60 per square meter range, there's considerable upside potential."

This article was published in Corebeat on 31st March, 2025.