Koramco Acquires East Central Tower Through Blind Fund

[Asia Economy Reporter Minji Lee] Koramco Asset Trust announced on the 10th that it has acquired the ‘East Central Tower,’ the largest office building in the eastern region of Seoul, as the first investment destination of the ‘Koramco Sustainable Growth Office Blind Fund No.1’ (hereinafter ‘Sustainable Growth Blind No.1’).

Sustainable Growth Blind No.1 is a blind fund worth approximately 300 billion KRW established by Koramco Asset Trust in January. It targets offices in Seoul and the metropolitan area, employing core (stable investment) and value-add (value-added investment) strategies to aim for a minimum IRR of over 7%. It is structured as a parent-subsidiary type REIT. To acquire the East Central Tower, Koramco Asset Trust set up a subsidiary REIT under Sustainable Growth Blind No.1 and participated in the sale bidding, securing the status of preferred negotiator on the 28th of last month.

East Central Tower is a landmark office building in the eastern region located at 571 Cheonho-dong, Gangdong-gu, Seoul, with 6 basement floors and 36 above-ground floors, and a total floor area of 100,422㎡ (30,378 pyeong). More than half of the total leased area is rented by Samsung Group affiliates such as Samsung Electronics, Samsung Medison, and Samsung C&T, while companies like Fila Korea and Samwoo Architects use it as their headquarters. Except for some parts of the lower floors, the vacancy rate is close to zero.

The building is directly connected to Gangdong Station on Subway Line 5 and faces the 8-lane Cheonho-daero, making it a transportation hub with access to major business districts in Gangnam and Pangyo within 30 minutes. With the ongoing redevelopment projects in the nearby Cheonho and Seongnae Redevelopment Promotion Districts, the asset value is expected to rise, anticipating significant capital gains from future asset sales.

Above all, the reason Koramco Asset Trust selected East Central Tower as the first investment destination for Sustainable Growth Blind No.1 is that it is one of the few ESG (Environmental, Social, Governance) assets in Korea. Completed in 2017, the building received the highest green building rating and energy efficiency grade 1 certification. It applies eco-friendly and energy-saving systems such as geothermal HVAC and solar power facilities, significantly reducing carbon emissions. This reflects a careful investment decision to respond to climate change and sustain a green environment for future generations.

Koramco Asset Trust plans to additionally acquire LEED (Leadership in Energy and Environmental Design) certification, an eco-friendly building certification system developed and implemented by the U.S. Green Building Council, to establish this building as a unique ESG landmark in the Seoul metropolitan area.

Kim Cheol-gyu, Head of Koramco Asset Trust, said, “Since 2012, Koramco has incorporated eco-friendly elements into investment and operations using a standardized policy called the ‘Green Smart Building Index’ developed in-house. The reason for selecting East Central Tower as the first investment destination is not only its value as a real estate asset but also consideration of environmental and social values for future generations.” Meanwhile, Koramco Asset Trust plans to complete asset due diligence and REIT licensing by next month and close the transaction around the end of July.

This content was produced with the assistance of AI translation services.