The only son of Woo Oh-hyun, chairman of the SM Group, whose company ranks 30th among the largest conglomerates, has been involved in a controversy regarding 'land hoarding' (the act of refusing to sell land in a planned development area while demanding high compensation). An apartment in the Oksu-dong area of Seongdong-gu, Seoul, will proceed with reconstruction excluding Mr. Woo's land. Following the emergence of the land hoarding controversy, SM Group stated last November it would auction the land and donate the profit from the increase in market value; however, it has been determined that the auction process has not yet been carried out.
According to the real estate industry on the 25th, the Hannam Heights Apartment Housing Reconstruction Maintenance Project Association has selected Heerim Architects & Planners after a design competition last month and is currently proceeding with follow-up procedures. Heerim submitted a design plan excluding the land for the primary access route owned by Mr. Woo. Consisting of 535 dwellings, Hannam Heights is expected to transform into a 792-dwelling complex with views of the Han River and Namsan once the reconstruction is completed.
A person in the real estate industry noted, 'Since the proposed design plan has been adopted that alters the primary access route, the land that has been the subject of the land hoarding controversy seems unlikely to affect the progress of the reconstruction.'
Hannam Heights has faced difficulties in advancing the reconstruction project due to the land owned by Mr. Woo. In June 2018, shortly after the establishment of the reconstruction association was approved, Mr. Woo successfully bid for four parcels of land, including the primary access road to the apartment, for 527.7 million won through auction. The association claims that Mr. Woo demanded to buy the land earmarked for reconstruction and sell it back at a high price due to land hoarding. It is known that both sides have not made progress in negotiating the land sale due to disagreements over price.
A mortgage of 5.154 billion won has been set on this land by SM Line Corp., a subsidiary of SM Group. SM Group has stated that the market value of this land is estimated to be between 8 billion and 10 billion won.
A representative of SM Group commented on the association's decision to proceed with reconstruction while excluding Mr. Woo's land, saying, 'The land was acquired fairly for long-term investment purposes, and it is somewhat unjust to claim that the association could have proceeded with reconstruction through area adjustments, but didn't due to the land hoarding by a large business.' They also stated, 'Even with the exclusion of this land from the reconstruction, I do not believe its value will significantly decrease as it is adjacent to the land.'
SM Group stated that it would sell the land and donate the profit, as asserted during the emergence of the land hoarding controversy last year, but it has not yet initiated the auction process. The company's stance is that it needs to coordinate auction schedules and other matters with the two other landowners.
In 2023, Mr. Woo filed a partitioning lawsuit against the two co-owners of the land and won in May of last year. At that time, the Seoul Eastern District Court ruled to auction each property and distribute the proceeds according to the ownership shares of the plaintiffs and defendants. Although the defendants (co-owners) appealed, they withdrew the appeal in January this year, solidifying the first-instance ruling.
SM Group stated, 'We maintain our position that we will conduct a court auction and donate the profit from the difference between the purchase price and auction price; however, the timing for the auction application is not specified.'