Private Investment and Global Company Attraction Are Key... "We Will Provide Various Benefits" [Yongsan Seoul Core Blueprint]

On the 28th, it was pointed out that private investment and attracting global companies are crucial for the success of the Yongsan International Business District in Seoul (formerly the Yongsan Maintenance Depot site), whose development plan was finalized. Since the project is expected to incur enormous costs with landmark buildings up to 100 stories high, as well as ultra-high-rise buildings averaging 60 to 80 stories, the success of the plan to establish it as an Asia-Pacific business hub depends on which companies move in.

Land to be Sold to Private Sector Next Year... Incentives Such as Long-term Land Lease Under Review

A bird's-eye view of Yongsan International Business District. (Provided by Seoul City)

The Yongsan International Business District is a mega project estimated to cost 51 trillion won. Of this, the budget invested by the project implementers, KORAIL and Seoul City, is about 14 trillion won. The remainder must be covered through private investment.

Seoul City plans to sequentially sell the land, divided into a total of 20 blocks, to the private sector starting next year. It is expected to begin with the core site of the international business zone (Block A), where the 100-story landmark building will be located. This zone has been designated as an urban innovation district, a Korean-style white zone (an area with minimal location regulations), providing incentives so that companies can carry out customized urban planning according to their desired lot and usage.

The land sale methods will include sales, REITs, and leases, and will be finalized in the first half of next year. The government and Seoul City are reviewing various incentives. These include long-term land leases if companies develop directly, and strengthening project feasibility assessments over collateral or credit in real estate project financing (PF). A KORAIL official, the project implementer, said, "Investors in the development market have requested REITs or leases because they feel burdened by the land payment when purchasing," adding, "There are demands to facilitate investment by flexibly extending the payment period for land costs, and we are reviewing this."

Land sales are expected to vary in method and timing by zone. Lim Chang-su, Director of Future Space Planning at Seoul City, said, "We are considering various methods such as REITs for some sites and competitive bidding for others," and added, "Rather than selling all the land at once, we plan to supply it according to market conditions, considering office supply in downtown Seoul." He continued, "A survey of about 100 companies confirmed that over 90% have investment intentions," and "We have already contacted 30 companies to exchange intentions."

Attracting Global Headquarters is a Short- and Long-term Task... "No Industry Restrictions"

(From left) Shim Wooseop, Acting President of Seoul Housing and Communities Corporation, Oh Se-hoon, Mayor of Seoul, Park Sang-woo, Minister of Land, Infrastructure and Transport, and Han Moon-hee, President of Korea Railroad Corporation, are posing for a commemorative photo with the site in the background after concluding the joint agreement ceremony for the Yongsan International Business District development plan at Dragon City Hotel in Yongsan-gu, Seoul on the 28th. Photo by Yonhap News

The government and Seoul City have set a goal to develop the Yongsan International Business District into a business hub comparable to Singapore and Hong Kong. The plan is to create a space where global companies can choose to establish their Asia-Pacific headquarters. Through this, they aim to enhance Seoul’s and the nation’s competitiveness. Jung Woo-jin, Director of Urban Policy at the Ministry of Land, Infrastructure and Transport, emphasized at a press briefing, "We consider this not just a simple urban development project but a national project," adding, "It is a symbolic project expanding into a global city centered on the transportation and logistics hub of Yongsan Station."

Seoul City plans to enhance the area's appeal as a residential location to attract global companies. They will introduce foreign schools and specialized medical institutions for foreigners to create spaces where global talents can stay. Customized housing, including short-term leases considering various lengths of stay, will also be introduced. Additionally, the entire district will be developed as an English-friendly village to eliminate language barriers. A one-stop support center will be established for systematic and continuous assistance, simplifying procedures related to visas, card issuance, and mobile phone activation. This initiative benchmarks the successful case of Azabudai Hills in Japan, which improved living conditions for foreign companies.

Tax incentives for global companies moving into the district are also under consideration. Lim Chang-su, Director of Future Space Planning, stated, "We can support income tax and other taxes, and we plan to finalize details in cooperation with the government."

There will be no restrictions on the industries of global companies moving into the Yongsan International Business District. Lim said, "Various companies are currently interested. Recently, we held a meeting with global companies in the financial sector, and there is interest in IT, finance, and hotel sectors as well," adding, "Rather than limiting specific industries, we intend to keep the district open to a diverse range of global international functions."

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