Asset management companies are flocking to Park One, the tallest building in Yeouido. Until recently, there were big vacancy concerns at Park One due to large new office supply in the Yeouido Business District (YBD), but after non-financial corporations first filled empty space, it is now emerging as a new home for financial companies.
According to the financial investment industry on the 25th, Life Asset Management is reviewing a plan to transfer its office from Yeouido IFC to Park One Tower 1. Life Asset Management has used the IFC building since its founding in June 2021 and is considering an office transfer after five years.
Life Asset Management is reviewing an office transfer because of business expansion. The number of executives and staff at Life Asset Management increased more than threefold from 14 at the time of founding to 46 in five years. Recently, after receiving authorization for public collective investment business from the Financial Services Commission, it also became possible to manage public funds for retail investors.
As it is reviewing ways to expand products into active exchange-traded funds (ETFs) and fund-of-funds type ETFs that hold private funds, it is interpreted as also keeping in mind the possibility of additional hiring.
IGIS Asset Management also plans to transfer its headquarters to Park One Tower 2 next year. IGIS Asset Management has leased and used the Se-woo Building since 2013, but as executives and staff increased sharply, the need for an office transfer grew. The workforce rose nearly sevenfold from 65 in 2015 to about 430 this year. Accordingly, it plans to consolidate even the teams that had additionally leased space in the CCMM Building into Park One.
Park One is a representative prime office building in Yeouido completed in 2020. It consists of two office towers: Tower 1 with 69 floors above ground and Tower 2 with 53 floors above ground. LG Energy Solution, HMM, Sangsangin Investment & Securities, and NH Investment & Securities(005940), among others, are currently tenants.
At first, Park One faced significant vacancy concerns due to large new office supply. After the spread of COVID-19, a global low-interest-rate environment and tighter regulations on the dwellings market drove investment demand into stocks and commercial real estate. In Yeouido as well, large offices such as Park One, KB Financial Town, and Post Tower were supplied one after another.
According to KB Securities, the office vacancy rate in the Yeouido area of Seoul reached 27% in the second half of 2020. As of early May 2021, the occupancy rates of Park One's Tower 1 and Tower 2 were only about 30% and 50%, respectively.
Since then, as major tenants such as LG Energy Solution and NH Investment & Securities settled in Park One, vacancies were quickly resolved. In particular, in the early phase, leasing by non-financial corporations was active. At the time, LG Chem(051910), POSCO E&C, GeneOne Life Science, New Era, and GC Biopharma Healthcare moved to lease space in Park One.
Recently, transfers by financial companies such as asset management firms have continued. Previously, NH Investment & Securities had been Park One's representative financial tenant, and after Korea Investment Real Assets Asset Management moved into Tower 2 earlier, IGIS Asset Management and Life Asset Management are also reviewing transfers.
Park One's strength is that it is a new prime office where large workspaces can be secured. In Yeouido, ultra-large offices that can house hundreds of people in one location are limited to a few, such as IFC, Park One, and FKI Tower. For asset management companies that need large office space due to organizational integration and business expansion, Park One, which can secure large leased space, is a good option.
In fact, vacancies in the Yeouido office market are very low. According to Rsquare, YBD's vacancy rate in the second quarter of this year was 2.4%, well below Seoul's office vacancy rate of 6.5%. Although new vacancies occurred at Park One and FKI Tower in the second quarter, pushing the ultra-large office vacancy rate up 1.3 percentage points from the previous quarter, overall vacancies remain low as new office supply is limited and existing leasing demand continues.
An official at an asset management firm said, "As managers grow, there are many cases where existing workspaces become cramped," and added, "Since there are not many spaces in Yeouido where large workforces can move into one building, there is strong demand for new offices like Park One where large space can be secured."