Mid-sized builder IS Dongseo is pushing ahead with the 3.5 trillion won mixed-use development "Penta Hills W" in the Jungsan District of Gyeongsan, North Gyeongsang. Sales and groundbreaking will start as early as April. This is the largest in-house project since its founding in 1975, with IS Dongseo leading everything from land acquisition and project planning to permits, taking on both the developer and builder roles.
However, a large overhang of unsold units in the Daegu–North Gyeongsang area could weigh on sales for Penta Hills W. 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 mid- to large-size units of 40-pyeong and larger, which have limited end-user demand.
On the 23rd, the construction and investment industries said IS Dongseo is finalizing the timing for the first sales launch of Penta Hills W, a mixed-use complex being created in the Jungsan District of Gyeongsan, North Gyeongsang. Split into Complex 1 at 376-16 Jungsan-dong and Complex 2 at 628-315 Jungsan-dong in Gyeongsan, the business sites plan to sell 3,443 units in phases one and two. The buildings will run from six floors underground up to 59 floors above ground. That means a tower will rise approaching the height of the 63 Building in Yeouido, 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 in-house project since IS Dongseo split off and became independent from the civil engineering division of Hyundai Engineering & Construction in 1975. In 2019, it secured the project 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 received permits related to the project's start of construction. Because this is an ultra-large in-house project for which the company is handling both development and construction, any unsold inventory would translate into larger losses for the company.
Despite these risks, IS Dongseo placed a big bet on the Jungsan District out of confidence that it boasts the strongest brand power in the Daegu–North Gyeongsang region. "Suseong Beomeo W," a 59-story mixed-use complex completed in Dec. 2023, is a skyline-defining high-rise in Daegu. Suseong Beomeo W sits at Beomeo Sageori. There, Dalgubeol-daero (10 lanes, both ways), which cuts east-west across central Daegu, intersects with a 13-lane road that runs north-south through eastern Daegu, forming the "heart of Daegu," home to clusters of financial firms and a legal district. The company developed the area under its high-end W brand and scored a major success. In the Daegu–North Gyeongsang region, W is perceived as more upscale than "Raemian" or "Xi."
However, because it will build a luxury mixed-use complex centered on large-size units in the Jungsan District, which is outside the prime core, there is also a risk of unsold units. A recent case in the same Jungsan District, where all unit types at a Hoban Construction project remained unsold after sales, is expected to add pressure.
The site for Penta Hills W borders Siji and Sawol-dong in Suseong District, Daegu, and it takes 40 minutes by public transit to reach Beomeo Sageori, the core of Suseong District. By unit size, the 34-pyeong type (exclusive area 84 square meters), known as the standard national type, accounts for 846 units, while mid- to large-size units dominate with 1,493 units (43%) of 42–49 pyeong, 876 units (25%) of 52–54 pyeong, and 228 units (7%) of 60 pyeong.
Lee Juhyeon Abdullah, the CEO, said, "Daegu lacks a supertall landmark overlooking Gyeongsan Jungsanji, the region's representative pond, and preference for the W brand is high," but added, "However, end-users are downsizing to smaller units due to loan regulations and other factors, so a lineup focused on large-size units with high price tags will be a burden."
Another factor weighing on IS Dongseo is that a nearby project's sales fell flat. Starting on the 9th, Hoban Construction sold 1,004 units at "Gyeongsan Sangbang Park Hoban Summit Complex 1" in Jungsan-dong, but all unit types remained unsold. Even with asking prices ranging from 417.9 million won to 616.2 million won, only 21 of 427 special-supply units and 221 of 983 general-supply units were taken.
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, where prices were lower, and Penta Hills W is an even larger complex by unit count, so it is unlikely that sales will wrap up quickly."