DWS Asset Management, a German asset management company, has successfully completed its disposition of ‘Podo Mall’ located in Sillim district to KORAMCO REITs & Trust for about 220 billion KRW. After the purchase in 2013, DWS Asset Management selected Cushman & Wakefield Korea as a property management company and carried out extensive MD improvement to meet the demands of frequent visitors. Based on tenant mix improvement, ‘Podo Mall’ earned its fame as a “landmark shopping mall” in the area. DWS Asset Management began the process of disposition of ‘Podo Mall’ from the end of 2019, and Cushman & Wakefield Korea was selected as an exclusive advisor for disposition.
KORAMCO REITs & Trust established KORAMCO Value Add Retail REITs No.3-1 (hereinafter referred to as ‘KORAMCO blind fund No. 3-1’ and completed the ‘Podo Mall’ disposition. ‘KORAMCO blind fund No.3-1’ is the first feeder fund of KORAMCO blind fund No.3 (master fund) of 400 billion won. Its main investors are institutional ones such as The Korean Teachers’ Credit Union, Public Officials Benefit Association, National Agricultural Cooperative Federation, The Police Mutual Aid Association, Military Mutual Aid Association and so on, and is is set in 2019 April.
Landmark commercial facility with stable rent income and high accessibility in Sillim area
‘Podo Mall’, completed in 2009, is a shopping complex with a total floor area of 11,422 pyeong from B8 to 15F and a stable lease rate of 98%. It is the only retail property under single ownership in the district, which makes it easier to keep the maintenance and its tenant mix. It consists of more than 120 tenants of fashion, F&B, service, cinema and so on, and attracts visitors in their twenties and thirties‘Podo Mall’ is located at the intersection of Sillim, which is a 6- and 8-lane boulevard, making it easy to enter and exit. The accessibility of public transportation is also excellent, and the subway station and ‘Podo Mall’ are directly connected through its B1-B2. Since the completion of Sillim Station in 1984, Sillim commercial district has established itself as a representative commercial area in the southwestern-Seoul where abundant demand and foot traffic of about 500,000 people come and go. Among the planned development plans in the future, the Sillim LRT and Sillim New Tows are to realize and the Sillim LRT is expected to be complete in 2022 and draw more foot traffic from Yeouido area.
Cushman & Wakefield Korea’s Capital Markets Group has led a coordination of opinions between the buyer and the seller for 10 months even though the investment environment is quite stiffened due to COVID-19. As a result, the team has successfully completed a series of investment advisory projects including Young City, Yusu Holdings Headquarters, and IDC Project, and ‘Podo Mall’ makes its status in real estate market even more secured than before.
KORAMCO REITs & Trust has attracted a distribution company which owns Yeongdeungpo Time Square, Kyeongbang, as a co-investor and consignment operator to increase the competitiveness of Podo Mall operation. Kyeongbang plans to change ‘Podo Mall’ better through facility remodeling and retail MD (tenant mix) change.
YK Son, Head of Capital Markets Group in Cushman & Wakefield Korea says “This transaction is of great significance as it is a quite big retail property transaction under the difficult internal and external conditions of COVID-19”. He adds “The evaluation of retail assets is at its lowest point now, which is expected to rebound when the impacts of COVID-19 alleviate in the future. Rather, investments in hotels and commercial complex facilities that are currently undervalued should be thoughtfully taken into consideration. I think it's time to do it.”
