Mid-sized builder IS Dongseo is pushing ahead with the Penta Hills W mixed-use development, a 3.5 trillion won project in the Jungsan District of Gyeongsan, North Gyeongsang. Sales and groundbreaking will begin as early as April. This is the largest self-led project since its founding in 1975, with IS Dongseo directly spearheading everything from land acquisition and project planning to permits and approvals, taking on both the developer and builder roles.
However, the large stock of unsold units lingering in the Daegu-North Gyeongsang area could weigh on Penta Hills W's sales. According to the Ministry of Land, Infrastructure and Transport, Daegu had 5,432 unsold dwellings as of the end of January. Some experts are concerned that Penta Hills W consists of mostly larger units of 1,300 square feet and above, where end-user demand is limited.
On the 23rd, the construction industry and the investment banking industry said IS Dongseo is finalizing the timing for the first sales launch of the Penta Hills W mixed-use project in the Jungsan District of Gyeongsan, North Gyeongsang. Split into Complex 1 around 376-16, Jungsan-dong, Gyeongsan-si, and Complex 2 around 628-315, Jungsan-dong, the business sites plan to sell 3,443 units in two phases. The buildings will run from six floors underground to as high as 59 floors above ground. That would put up a tower approaching the height of the 63 Building in Yeouido-dong, Seoul (about 249 meters).
An IS Dongseo official said, "We are targeting a sales launch in the first half, and on the 24th the company will hold an investor relations (IR) event for key investors and others to announce the final sales timing."
The total project cost is 3.5 trillion won, making it the largest self-led project since IS Dongseo spun off and became independent from Hyundai Engineering & Construction's civil engineering division in 1975. In 2019, it secured the site by purchasing 106,300 square meters (about 32,000 pyeong) of land in the Jungsan District for 400 billion won, and in 2024 it obtained permits related to groundbreaking. Because this is an extra-large self-led project in which the company handles both development and construction, any unsold inventory would amplify the company's losses.
Despite such risks, IS Dongseo is going all-in on the Jungsan District because it is confident it boasts the strongest brand power in the Daegu-North Gyeongsang region. The mixed-use complex Suseong Beomeo W, completed in December 2023 by IS Dongseo, is a 59-story mixed-use complex and a skyscraper that represents Daegu. Suseong Beomeo W sits at Beomeo Sageori. Dalgubeol-daero, which cuts east-west across downtown Daegu (10 lanes round trip), intersects with a 13-lane arterial that runs north-south through eastern Daegu here, forming a cluster of financial firms and the legal district—"the heart of Daegu." The company leveraged its high-end W brand for this site and scored big success. In the Daegu-North Gyeongsang region, W is perceived as more upscale than "Raemian" or "Xi."
Still, because it will build a luxury mixed-use complex centered on large floor plans in the Jungsan District, which is outside the core area, there is a possibility of unsold units. A recent case in the same district by Hoban Construction, where all unit types failed to sell out, is also likely to weigh on the project.
The site for Penta Hills W is adjacent to Siji and Sawol-dong in Suseong District, Daegu, and it takes 40 minutes by public transit to reach Beomeo Sageori, a core area of Suseong District. By unit size, there are 846 units of the 1,200-square-foot class known as the national average (exclusive area 84 square meters), 1,493 units (43%) of 1,500 to 1,700 square feet, 876 units (25%) of 1,800 to 1,900 square feet, and 228 units (7%) of 2,000 square feet, with larger units making up the bulk.
Lee Juhyeon, head of Wolcheon Jaetech, said, "There is no supertall landmark in Daegu that overlooks Gyeongsan Jungsanji, the region's representative pond, and there is high preference for the W brand," but added, "However, end users are moving to smaller units due to effects such as tighter lending rules, so a lineup centered on large units and high pricing will be a burden."
IS Dongseo is also troubled by the poor performance of nearby sales launches. Starting on the 9th in Jungsan-dong, Hoban Construction offered 1,004 units at Gyeongsan Sangbang Park Hoban Summit Complex 1, but all unit types ended up with unsold inventory. It proposed list prices ranging from 417.9 million to 616.2 million won, but only 21 of 427 special-supply units and 221 of 983 general-supply units received applications.
Lee Byeonghong, a professor in the Department of Finance and Real Estate at Daegu Science University, said, "Unsold units occurred at Sangbang Park Hoban Summit, which had lower list prices, and Penta Hills W is an even larger complex by unit count, so I do not expect sales to wrap up quickly."