Abu Dhabi Investment Authority Likely to Acquire State Tower Namsan

The Abu Dhabi Investment Authority (ADIA), one of the three largest sovereign funds in the world, is emerging as a promising candidate for the acquisition of the State Tower Namsan located in Seoul.

According to industry sources, Shinhan BNP Paribas Asset Management and Savills Korea, which are moving ahead with the sale of the office building, have interviews with the ADIA and IGIS Asset Management on July 24 in order to select a preferred bidder.

The final candidates include the ADIA, IGIS Asset Management, RREEF under Deutsche Bank, and Ascendas of Singapore. The preferred bidder is selected late this month after overall evaluation of funding and asset management capabilities.

The acquisition price exceeds 25 million won (US$24,293) per 3.3 m2 area (or one pyeong), and it is expected to become the most expensive office building in Seoul once traded. The total cost is more than 500 billion won (US$485.7 million). It has a total building floor area of 66,799 m2 and a lot area of 2,350 m2, along with 24 and six stories above and under the ground.

The ADIA is the largest sovereign fund in the Middle East, whose working capital is estimated at over US$600 billion, and is handling the export fund of the major petroleum exporter, UAE. The authority has concentrated its investment in the stocks and bonds of advanced economies, but is currently expanding its business to cover the stock and real estate markets of emerging countries, with the size of the working capital swelling.

IGIS Asset Investment purchased the Twin Tree Tower located in Gwanghwamun last year. At this time, it is expected to be funded by Bearing Asset Management. This means that the new owner of the State Tower Namsan will be a foreign company, whether the building is bought by the AIDA or IGIS.