The land in Gyeryong, South Chungcheong Province, where the entry of the global furniture company IKEA was anticipated as the first in the Chungcheong region, has been put up for auction but has repeatedly failed to sell. After the entry of IKEA fell through, there were expectations for new facilities to arrive; however, the protracted stagnation in the real estate project financing (PF) market has prolonged the land sale process itself.
According to the list of real estate sales promotion business sites from the Financial Supervisory Service and the Korean Asset Management Corporation's Onbid, the auction for the site located at 1017-1, Nongsori, Dumamyeon, Gyeryong, South Chungcheong Province, will take place on the 8th of this month.
The area of the land subject to auction is 48,696 square meters. The appraised value is 78.328 billion won, with the minimum bid price set at 62 billion won.
This land was originally the site being considered for IKEA's entry. IKEA began the permitting process to open a store at this site but withdrew the plan in 2022. After that, Gyeryong City attempted to attract new facilities; however, due to tax delinquency issues with the subsequent business operator, Theorem, the land ultimately went up for auction.
A Gyeryong City official noted, "I understand that Theorem pushed for development, but due to administrative issues like taxes, it is currently undergoing the auction process."
This business site is trying to find a new owner through auction, but it is proving difficult. The auction began in September of last year, and the land has yet to find an owner, having failed to sell nine times.
According to the auction announcement, if this business site continues to fail to sell in the five scheduled auctions this month, the minimum auction price will drop to around 50 billion won. This would be only about 64% of the appraised value.
As the downturn in real estate PF continues, the number of business sites entering the auction is also increasing, not just those of large supermarkets. As of the end of last month, a total of 396 PF business sites were listed as real estate sale promotion business sites, an increase of 11 from the previous month (385 sites). The appraised value of the PF business sites being promoted for sale stands at around 14.1257 trillion won.
Considering that there are still business sites that have not yet entered the auction process, the scale of business sites unable to proceed due to real estate PF deterioration is likely to grow even larger.