이 기사는 2019년 11월 11일 08:00 thebell 에 표출된 기사입니다.

South Korea's IGIS Asset Management and the U.S. buyout group Kohlberg Kravis Roberts (KKR) would likely be a new owner of Namsan Square, a prime office property in Seoul.

Last month CBRE Korea and Shinyoung Asset, which lead the sale of the building by the National Pension Service (NPS), shortlisted three out of the six suitors that participated in the bidding process. Included in the shortlist were a consortium formed by Edon Property Management and Angelo Gordon, a consortium between IGIS and KKR, and Korea Real Estate Investment & Trust Co. (KOREIT)'s subsidiary KOREIT Asset Management.

IGIS reportedly received on November 1 verbal notification from the lead managers that it would be selected as a preferred bidder. Both parties seem to remain cautious about mentioning the results. "There is nothing to say at the moment since we have not been officially notified yet," a spokesperson of IGIS said. "There is nothing we can comment on," a spokesperson of CBRE Korea also said.

According to real estate industry sources, all shortlisted bidders made an offer of more than 20 million won per 3.3 square meters, which makes the total price of the building over 450 billion won ($389 million). The seller NPS would have liked all three bidders with respect to the offered price, but ended up moving forward with the IGIS-KKR consortium. IGIS has plenty of experience in acquisition of prime office properties, and KKR's ability to raise funds also appeared to reassure the seller.

Both parties are expected to perform due diligence and sign a final agreement shortly after the official notification about a preferred bidder is released before long. The transaction is expected to complete within the year, with which the building would be changing hands in a decade.

IGIS and KKR reportedly plan to use value-added strategies to boost the value of the building. Namsan Square, formerly known as Kukdong Building, is within the area designated as a remodeling promoted zone, where the floor area ratio can be increased roughly 30 percent. The building is also located near the subway station, potentially providing higher yields if adapted for residential use.

IGIS and KKR have built a strong business relationship. The two most recently cooperated in development of a former Renaissance Hotel site in Seoul's Gangnam area, which they purchased last year for 1.16 trillion won ($1.2 billion) from MacKeen 237 PFV Co., a corporation formed by local developer Daor E&C Co. to acquire the site and hotel from the original owner Sambu Construction Co. in 2016.

What is worth noting is that IGIS and KKR took a partnership with the NPS to develop the site. Among the total development budget of 2.1 trillion won ($1.8 billion) set by the two firms, the NPS committed 500 billion won ($432 million) in the form of equity.

The two firms and the NPS met again this year as a counterparty in the property sale. The transaction would be win-win for both parties, industry insiders said, as IGIS and KKR would be able to work on a large-scale development, while the NPS also could earn a big profit through the sale.

(By reporter Kim Gyuoung-tae)