16th Sale Attempt of LH Orisa Building Fails... High Appraisal Price and Usage Restrictions Hinder Deal

Korea Land and Housing Corporation (LH) attempted to sell the 16th property, the Ori Building in Bundang, Seongnam-si, Gyeonggi-do, but the sale ultimately failed. The high appraisal price and usage restrictions limited to office and cultural facilities are analyzed as the reasons for the failed auction.

LH Bundang Ori Building. [Photo by LH]

According to LH on the 14th, the bidding for the sale of the Ori Building closed on the 23rd of last month with only one company participating, but the participating company did not pay the bid deposit, resulting in the auction failure.

The LH Ori Building consists of a main building with a site area of 37,997㎡ and a total floor area of 72,011㎡, including a basement 2 floors to ground 8 floors main building and an annex with basement 2 floors to ground 4 floors. It is currently used as the Southern Gyeonggi Regional Headquarters. The location is in the prime area near Ori Station on the Bundang Line.

However, the usage is restricted only to office and cultural facilities, and the high appraisal price of 580.1 billion KRW has repeatedly caused failures in the sale. Since 2010, all 16 attempts to sell the Ori Building have failed.

LH has been designated as a financially risky institution and must reduce its debt ratio to below 200% by 2026. As of the end of last year, LH's debt ratio was 218.7%.

It is known that LH is also considering using the Ori Building for public purposes instead of selling it. There has been no progress in changing the land use with local governments, and reattempting the sale would require spending hundreds of millions of KRW again.

An LH official said, “It has not yet been decided whether to announce the sale again. Although the option of using it for public purposes is being considered, we plan to discuss with the Ministry of Land, Infrastructure and Transport and consider various methods.”

This content was produced with the assistance of AI translation services.