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

Daewoo is planning to relocate to the Seoul headquarters ofKumho-Asiana Group once that new building is ready. The firm wastaken over last year by Kumho-Asiana. Presently, Daewoo occupiesabout seven floors at its headquarters, known as Daewoo Center. Theremainder is leased to third-party tenants. As part of theagreement, Daewoo has agreed to assist Morgan Stanley in leasingspace and making renovations for the building, which opened in themid-1970s and is considered in need of extensive modernization.

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