Hong Kong-based private equity firm PAG is considering the timing of an exit from Seoul City Tower as it wraps up major renovations and tenant repositioning. The potential sale aligns with PAG’s value-add strategy and comes on the heels of the firm closing its $4 billion SCREP VIII fund, the largest opportunistic real estate fund raised in Asia Pacific over the past year.

PAG acquired Seoul City Tower in 2022 alongside IGIS Asset Management for approximately KRW 490.1bn (USD 365m, USD 6,215/m²). The 23-story office building, completed in 2002 near Seoul Station, spans B8-23F with approximately 60,000 m² of gross floor area. The asset was previously held by a Koramco Asset Trust REIT funded by the National Pension Service.

Since acquisition, PAG has implemented substantial capital improvements, including lobby upgrades and tenant repositioning. The property has secured new occupiers such as SMCore, a logistics automation solutions provider, and market observers anticipate PAG could bring the asset to market shortly.

PAG’s Korean strategy emphasizes acquiring assets with value-add potential, enhancing value over a three- to five-year hold period, and exiting once repositioning is complete. 

The firm acquired The Pinnacle Gangnam Tower (formerly POBA Tower) for KRW 310bn (USD 231m) in 2017 and sold it to Mapletree and MNACT for KRW 420bn (USD 313m) in 2020. In 2019, it acquired Grand Hyatt Seoul jointly with Inmark Asset Management for KRW 560bn (USD 417m) and sold it to BlueCove Investment for KRW 730bn (USD 544m) in 2024.

Current holdings include Pinnacle Yeoksam Tower 2 (formerly Woosin Building), acquired for KRW 167bn (USD 124m) in 2021, and Seoul City Tower.

PAG’s potential exit from Seoul City Tower comes just months after the firm closed SCREP VIII (Secured Capital Real Estate Partners VIII) at $4 billion, exceeding its initial target of $3.5 billion. With leverage of up to 70% permitted, the fund’s total investment capacity could reach approximately $13 billion.

The latest SCREP vehicle—PAG’s tenth since launching the series in Japan in 1997—attracted commitments from sovereign wealth funds and pension funds across Asia, North America, Europe, and the Middle East. The fund’s strategy spans traditional office and logistics assets as well as data centers, multifamily housing, non-performing loans, high-yield bridge loans, and platform equity stakes.

PAG has indicated that approximately 70% of SCREP VIII’s capital will target Japan, with the remainder allocated to Korea, Australia, and other developed Asia-Pacific markets. Recent investments include the acquisition of logistics centers near Nagoya from Hines.

An industry source said that SCREP VIII’s deployment could play a meaningful role in reviving activity in Korea’s commercial property sector, where liquidity constraints have dampened deal flow since 2023.

This article was originally published in Korean by Corebeat on 30th May, 2025.