M&G Real Estate is believed to have signed an agreement with Korean developer CTCore to buy a 26-storey twin tower office asset in Seoul for KRW1.1trn (€868m).

Sources told IPE Real Assets that M&G Real Estate plans to acquire Centropolis for its M&G Asia Core Fund, based in Singapore, and co-investors.

If the proposed deal is finalised, it will set yet a new record for an office transaction in Seoul’s core office market.

One source said M&G became the preferred bidder after a consortium of US private equity firm KKR and Korean fund manager, IGIS Asset Management, withdrew from a bid to buy the complex, over “a critical issue”.

A source familiar with the project told IPE Real Assets that the issue could be concern over the high level of office vacancy in Seoul and the lack of anchor tenants for the twin towers.

Apart from KKR-IGIS consortium and M&G Real Estate, CTCore received other bids, including reportedly from Blackstone and Korea Post.

The UK manager is thought to have bid more than KRW1.1trn or KRW27m per 3.3sqm. This would set a record in dollar value, although the per-square-foot record is held by another transaction earlier this year.

M&G Real Estate is currently undertaking due diligence on the twin tower buildings according to this source.

When reached for comment, an M&G spokeswoman said the firm did not comment on “speculation”.

Korea is one of five core markets in the Asia Pacific for the UK manager.

In an interview with IPE Real Assets last year, Ng Chiang Ling, CEO of M&G Real Estate Asia said M&G saw north Asia, especially Korea and Japan, as an obvious market for new mandates or separate accounts.

Ng also said that M&G was developing a strategy with a number of other investors to invest in club deals structured to meet “both our and our investors’ requirement for core assets”.

M&G Asia Fund, Asia’s largest – and oldest – open-ended core fund, is moving towards its US$5bn (€4.2bn) assets under management target, after exceeding US$3bn last year.