This article was published on March 11, 2025, at 5:00 p.m. on the ChosunBiz MoneyMove site.
Recently, major companies and global asset management firms have been moving into the 'One Grove' in the Magok district of Seoul, which had raised concerns over large-scale vacancies due to no occupants before its completion last year. Thanks to this, the National Pension Service has reportedly received proposals for acquisition financing that far exceed the initial target.
On the 11th, according to investment banking (IB) industry sources, about 20 global asset management firms are in discussions to move into One Grove in Magok, Gangseo-gu, Seoul. Most of these firms are focused on real estate, including the leading U.S. residential real estate asset management firm Greystar and the large Asia-Pacific private equity real estate firm Phoenix Property Investors. These firms are expected to proceed with substantial occupancy starting in the second quarter of this year after signing contracts and carrying out interior construction.
Construction company DL E&C and DL Construction, headquartered in D Tower Donuimun, Jongno-gu, Seoul, will also transfer to One Grove. The shared office FlagOne, operated by LG asset management affiliate D&O, and the bio company Invitros are also planning to move into One Grove. Regional airline Air Incheon and career platform Saramin have also chosen One Grove as their new home.
One Grove has a total floor area of about 463,098 square meters, similar in size to Yeouido IFC (506,205 square meters). Offices will occupy floors 3 through 11, and 'One Grove Mall' will be located from the basement level 2 to ground level 2. It is a major project constructed by TaeYoung E&C, and is the largest single real estate investment made by the National Pension Service in Korea. In 2021, the National Pension Service decided to acquire One Grove after its completion for 2.3 trillion won.
In fact, a half year ago, prior to its completion in the summer of 2024, there were no tenants signed to the office building, raising concerns over profitability. During a government audit that year, Democratic Party lawmaker Lee Soo-jin raised this issue and inquired about the expected occupancy rate, to which the National Pension Service responded that it was about 20%.
Industry sources noted that the primary reason for this was the location. The Magok district is not one of the three major business areas of Seoul, which include Gwanghwamun, Gangnam, and Yeouido, and it is situated further west than Yeouido, making it a challenging location for companies to transfer to. Additionally, many new office buildings have been constructed in Magok and nearby Yeouido, leading to a dispersion of demand from companies seeking to move in. Most notably, the financial crisis faced by TaeYoung E&C due to its workout and the downturn in real estate project financing (PF) further exacerbated the situation.
Nonetheless, the consensus among industry experts is that the current occupancy rate, which has reached 40%, is thanks to the National Pension Service. As One Grove struggles to find tenants, companies are opting to move in to establish good relationships with the National Pension Service. The growing scale of the fund and the projected tenfold increase in alternative investments are also among the reasons for their decision to move to Magok.
An industry source stated, "While it may be different for other buildings, One Grove is a large asset combining two to three typical buildings, so achieving almost half of the occupancy rate within about five months should be seen as a success," adding, "Given that the investment in One Grove represents a significant portion of the National Pension Service's real estate portfolio, there is also a possibility that choosing to lease was intended to support revenue. '
The financial investment industry is also extending a hand to the National Pension Service. The National Pension Service plans to secure 1.9 trillion won in acquisition financing for the funds required for the acquisition. Despite a vacancy rate reaching 60%, it is reported that nearly 3 trillion won in funds has been gathered from banks and insurance companies.