According to analysts, the sale reflects two trends, one being Daewoo's desire to reduce its corporate real estate ownership after its takeover by a rival last year, especially for non-core assets such as the aging headquarters. The other is the aggressive manner by foreign investors to take advantage of the Asian economic boom, a strategy certainly being embraced by Morgan Stanley. Armed with an $8-billion opportunity fund focused on the Asian markets, the New York City-based investment advisor reportedly outbid such suitors as Kookmin Bank of Korea and Macquarie Bank of Australia to secure the building.

Daewoo is planning to relocate to the Seoul headquarters of Kumho-Asiana Group once that new building is ready. The firm was taken over last year by Kumho-Asiana. Presently, Daewoo occupies about seven floors at its headquarters, known as Daewoo Center. The remainder is leased to third-party tenants. As part of the agreement, Daewoo has agreed to assist Morgan Stanley in leasing space and making renovations for the building, which opened in the mid-1970s and is considered in need of extensive modernization.

If the capital improvements are not completed, the price could be knocked down to around $984 million. If so, that would put the sale below the highest amount achieved in Korea for a single asset by a foreign investor. That sale occurred when another Seoul building was bought for $1.01 billion in 2001 by the Government of Singapore's investment arm. Regardless of the final amount yielded, the Daewoo Center transaction will be among the priciest of its kind ever in Korea, observers conclude.