The development project for the Yongsan International Business District site owned by the Seoul Metropolitan Government and Korea Railroad Corporation (KORAIL) is gaining momentum. Seoul Housing and Urban Development Corporation, the project operator, has begun selecting a builder to start building infrastructure such as roads and water and sewage systems for a site of more than 450,000 square meters.
After the infrastructure work is completed, the Seoul Metropolitan Government and KORAIL plan to divide the area into 18 zones (blocks) and sell individual lots to the private sector for development. Major builders such as Samsung C&T and DL E&C are reviewing participation in the site work tender.
According to the maintenance industry on the 29th, Seoul Housing and Urban Development Corporation issued a bid notice on the 20th for selecting a builder for the "Yongsan International Business District urban development project site works" and is accepting bids through the 31st.
The Yongsan International Business District urban development project will develop the former rail maintenance depot site of 456,099 square meters around 40-1, Hangangno 3-ga, Yongsan-gu, to create office, commercial and residential facilities. The land where the project is carried out is owned by KORAIL and the Seoul Metropolitan Government in a 7-to-3 ratio. KORAIL and Seoul Housing and Urban Development Corporation serve as joint operators. The site works refer to construction to build basic infrastructure, such as roads and water and sewage systems, before buildings go up. Seoul Housing and Urban Development Corporation presented a total construction cost of 149.4 billion won and required completion by Sept. 2029. Builders may participate alone, and a consortium of up to three companies may also carry out the project.
Among builders, major companies such as Samsung C&T and DL E&C are showing interest in bidding for the project. An official at a construction company said, "We are reviewing whether to participate in the bid as we examine the project's feasibility." An industry official said, "Because it is such a large project, several builders are considering participating from the site works stage," adding, "Many builders and developers are also interested in the main development project to construct buildings after purchasing land once the infrastructure is complete." Seoul Housing and Urban Development Corporation plans to select the builder for the site works in December and break ground early next year.
After the site works, the development land will be divided into 18 zones (blocks) and individual lots will be sold to the private sector. The appraisal industry expects the value of the development land that the Seoul Metropolitan Government and KORAIL will sell to exceed 20 trillion won. However, there is also a possibility that some lots among the 18 zones will be held back.
An official at Seoul Housing and Urban Development Corporation said, "The implementation plan is expected to be finalized by the Seoul Metropolitan Government next month," adding, "It has not yet been decided whether all 18 zones will be sold to the private sector or whether some will be retained."
The appraised value of KORAIL-owned land, as assessed by KORAIL in 2022, is 7.2 trillion won. Considering KORAIL's equity ratio (70%), the total appraised value at the time, including the portion held by the Seoul Metropolitan Government, is around 10 trillion won. KORAIL estimated total revenue from the development at 19 trillion won and total expense at 16 trillion won. The expected profit, the difference between total revenue and expense, is 3 trillion won. Of that, 2.1 trillion won would go to KORAIL and 900 billion won to the Seoul Metropolitan Government.
Earlier, on Sept. 17, the Seoul Metropolitan Government conditionally approved revisions to the "Designation (change) of the Yongsan International Business District urban development zone and development plan (change)" through review by the Urban Planning Committee. According to the development plan, of the total 456,099 square meters, 265,330 square meters, or 58.2%, will be used as mixed-use land including international business land. For public facilities such as roads, parks and green spaces, 190,769 square meters (41.8%) have been allocated. The Seoul Metropolitan Government plans to approve and announce the implementation plan once related preliminary administrative procedures such as the traffic impact assessment and disaster impact assessment are completed.