Full-scale marketing for the sale of Seoul Square, one of the most iconic office buildings in Seoul’s Central Business District (CBD), is set to begin next month. The appointed sales advisors, JLL Korea and Savills Korea, plan to distribute investment memorandums (IM) and launch formal marketing efforts in August.

Completed in 1970, Seoul Square is a major office complex comprising 2 underground and 23 above-ground floors, with a total gross floor area of 132,806 square meters.

The current owner, ARA Korea Asset Management, acquired the property in March 2019 alongside NH Investment & Securities for approximately USD 716 million, at a price of USD 17,830 per 3.3㎡. At the time, NH offloaded preferred shares worth USD 265 million to institutional investors including Samsung Fire & Marine, Samsung Life Insurance, NongHyup (National Agricultural Cooperative Federation), and the Korea Scientists and Engineers Mutual-aid Association.

The book value of the asset, including associated acquisition costs, is estimated at USD 762 million. This consists of approximately USD 298 million in equity and USD 465 million in loans. ARA Korea and NH Investment & Securities respectively hold USD 30 million and USD 3.6 million in common equity, while preferred shares worth USD 265 million are held by institutional investors such as Samsung Fire & Marine. The loans were reportedly issued at an interest rate of 5% by these same institutions.

The primary driver behind the sale is the approaching maturity of the private real estate fund “ARA Korea Private Real Estate Investment Trust No.1,” which holds Seoul Square and is set to expire at the end of February next year.

The sellers are hoping for a sales price in approximately USD 1.01 billion based on the building’s total floor area.

Although the goal is to close the deal within the year, the market remains uncertain as office supply continues to accumulate, raising concerns about whether investors will accept a price in approximately USD 7.25 billion.

Seoul Square boasts excellent transportation accessibility, with direct underground connections to subway lines 1 and 4, the Gyeongui Line, Airport Railroad, and the GTX-A express rail. Major redevelopment projects around the area—such as the transformation of the Millennium Hilton Hotel and the Seoul Station North District—are also expected to improve the property's value.

However, some headwinds remain. In a sluggish liquidity environment, the office sector in Seoul’s CBD is oversupplied, and Seoul Square currently faces a vacancy rate of 18.6%. A notable contributor to this vacancy is the departure of SK Group’s e-commerce affiliate 11st Street, which relocated to Gwangmyeong in September 2023 for cost-saving purposes. Of the five floors it occupied, four remain vacant today.

For reference, when the Seoul Finance Center (SFC) was put on the market in December 2023, bidders proposed prices of USD 23,200 to 24,600 per 3.3㎡. As these fell short of USD 27,500 anticipated by seller GIC (Singapore’s sovereign wealth fund), the sale was ultimately withdrawn.