이 기사는 2021년 07월 23일 07시22분 thebell에 표출된 기사입니다

Emart may consider changing the use of its land in Seongsu-dong, which has been up for sale, to maximize the sale proceeds as the hypermarket operator is in need of a large amount of cash to pay for eBay’s South Korean operations.

The company is in the process of selecting an adviser to lead the sale of its real estate assets in Seongsu-dong, east of Seoul, industry sources said on Wednesday.

The company intends to sell roughly 13,223 square meters of land, which is classified as a semi-industrial area according to the local law. Emart’s headquarters and Seongsu branch are on it. Whether Emart will sell all buildings and land or part of them is unclear yet.

“The value of the real estate assets put up for sale by Emart will be assessed based on how they will be used by potential buyers,” an industry insider said. “If Emart goes with a sale and leaseback deal, the sale process will be largely dominated by core real estate funds.”

Or the company can consider changing the use of the land to a residential area in order to attract interest from more diverse types of potential buyers, industry watchers said. The change seems not unlikely as there are many homes in the neighborhood.

A possible change in the land use and housing development could increase an expected rate of investment return and lead to more potential buyers joining the sale process. Particularly, this could attract interest from opportunistic real estate funds and property developers. It is also likely that some of them team up with each other to jointly bid for the assets.

Emart may opt to choose the option of changing the land use given its huge cash needs, industry watchers said. The company last month agreed to acquire 80% of eBay Korea in an all cash deal worth 3.44 trillion won ($3 billion). It plans to fund a large portion of the acquisition cost internally.

“(The change in the land use) would increase the attractiveness of the assets to real estate developers seeking to secure more land in Seoul to develop for housing,” said another industry insider. “But still that is subject to regulatory permission. The key to a successful sale will be what conditions Emart will offer to potential buyers.” (Reporting by Hyo-beom Lee)