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LF Acquires Additional Building Near Sinsa-dong Headquarters; Now Owns Six in Total

[비즈한국] Bizhankook has confirmed that LF067050, the only company among the top five Korean fashion firms to report strong performance last year, recently purchased a building adjacent to its headquarters in Sinsa-dong, Gangnam-gu, Seoul, for 40 billion KRW. Since establishing its roots in Sinsa-dong in 1996 by constructing its headquarters during its time as LG International Corp., LF has expanded its footprint by acquiring surrounding real estate. Including this latest acquisition, the company now owns six buildings in the area. LF stated, "We decided to make the purchase due to a lack of office space."

According to industry sources and the real estate registry, LF purchased the Daemyung Building, located next to its Sinsa-dong headquarters, for 40 billion KRW on the 14th. The building, completed in 1992 with two underground levels and seven above-ground levels (total floor area of 2,975㎡), is currently leased to tenants including software development companies. LF completed the ownership transfer registration four days after signing the sales contract on the 10th. Given that no collateral security (mortgage) was registered by a financial institution on the property, it appears the purchase price was paid in full with cash.

LF currently owns six buildings in the Sinsa-dong area (East Building, New Building, Annex, West Building, Samyoung Building, and Daemyung Building). After constructing the East Building (headquarters), which has three underground and nine above-ground levels, in 1996 during the LG International era, the company purchased nearby buildings in 2006 and 2007 to use as a "New Building" and "Annex," respectively. In 2009, it built the West Building—consisting of four underground and five above-ground levels—on land it owned across from the headquarters. In October 2017, it additionally purchased the Samyoung Building, which borders the north side of the East Building (headquarters), for 50 billion KRW.

With this purchase, LF has also secured the conditions to potentially redevelop the surrounding buildings all at once. Currently, the East Building (headquarters), New Building, Annex, Samyoung Building, and Daemyung Building (excluding the West Building) all share adjacent land, forming a neat, rectangular plot totaling 4,068㎡. The aforementioned buildings are between 19 years old (West Building) and 33 years old (Samyoung and Daemyung buildings), reaching the age when office building redevelopment is typically discussed. Depending on the owner's intent, it is possible to demolish the existing structures and build new ones by utilizing the large plot of land.

An LF official stated, "We are currently using many leased buildings because our office space is insufficient. We decided to purchase this building to secure workspace near the headquarters and increase efficiency," adding, "There are currently no plans for development in the area."

LF is a fashion company that split from LG International Corp. in November 2006. It used the name LG Fashion before changing its corporate name to LF in 2014. Last year, its consolidated revenue was 1.9563 trillion KRW, up 3% from the previous year, and its operating profit increased by 120% to 126.1 billion KRW, making it the only firm among the top five domestic fashion companies—including Samsung C&T028260 Fashion Group, Handsome020000, Shinsegae International031430, and Kolon FnC—to report strong performance. In 2018, LF expanded its business into real estate finance by acquiring Coramco Asset Trust. The largest shareholder of LF is Chairman Koo Bon-keul, who is the grandson of LG Group founder Koo In-hwoi and the eldest son of former LG International Corp. President Koo Ja-seung.