Shinhan Card has begun the sale of its headquarters building, Fine Avenue Tower A, located on Eulji-ro in Jung-gu, Seoul.
According to the investment banking (IB) industry on the 5th, Shinhan Card the previous day sent out a request for proposals (RFP) to select an advisor for the sale of Fine Avenue Tower A. It is confirmed that major domestic and overseas real estate advisory firms have received the RFP.
Fine Avenue Tower A is a large office asset located in the central business district (CBD) of Seoul. The total floor area is about 65,744 square meters (about 20,000 pyeong), and it is directly connected to Euljiro 3-ga Station on Seoul Subway Line 2. Shinhan Card acquired the asset in 2020 for about 520 billion won.
The market views the sale price of Fine Avenue Tower A at the mid-30 million won per pyeong level. Applying that, the total transaction amount could exceed at least 700 billion won, according to some views. With large office transactions in the CBD limited recently, the property's scarcity is being highlighted.
Shinhan Card has been reviewing plans to sell the building since last year. A plan to include it in Shinhan Alpha REIT, a listed REIT managed by affiliate Shinhan REITs Management, was also discussed, but as shareholder pushback at the REIT and potential controversy over internal transactions were raised, it is said the company shifted to an open bid.
The sale of the headquarters appears aimed at securing liquidity. In Dec. last year, Shinhan Card carried out a voluntary retirement program for employees born between 1968 and 1974. Analysts say the company is seeking to monetize noncurrent assets as fixed costs rise.
Performance pressure is also cited as a factor. Shinhan Card last year ceded the No. 1 spot in the card industry to Samsung Card. Samsung Card's net income last year was 645.9 billion won, down 2.8% from a year earlier, while Shinhan Card fell 16.7% to 476.7 billion won. As Shinhan Financial Group holds 100% equity in Shinhan Card, some interpret that the group's financial strategy and shareholder-return stance influenced the decision to sell the headquarters.
However, the scheduled supply of new offices in the CBD is seen as a variable. The market expects that the lease terms proposed by Shinhan Card will be the key to sealing a transaction. Depending on lease stability—such as the lease term and whether there is a master lease—bidders' price expectations could vary.