[Interview] "Gwangju Champions City Aims for April Sales Launch... Confidence Built After Visiting 3,000 Real Estate Agencies"

Jonggu Son, CEO of Shinyoung
Final Negotiations with Top-Tier Construction Companies
Strengthening Collaboration through CEO Meetings
Transitioning to an Operation-Focused Developer

Shinyoung Group, a first-generation domestic developer, has formed a consortium with companies such as Woomee Construction to push forward the Gwangju Champions City mixed-use development project, which is now in its final preparations with the goal of launching sales in April next year. This project is a massive undertaking with a total budget of 4 trillion won, aiming to transform the former Jeonnam Textile and Ilsin Textile sites in Im-dong, Buk-gu, Gwangju (approximately 290,000 square meters) into a landmark that integrates residential, commercial, and cultural facilities.

Jonggu Son, CEO of Shinyoung, the holding company of Shinyoung Group, stated in an interview at the Shinyoung headquarters in Gangnam-gu, Seoul on the 10th, "We are in the final stages of negotiations with several top-tier construction companies, and the outline should become clear by January next year," adding, "Our goal is to begin construction simultaneously with the sales launch in April next year." This statement refutes recent speculation about a "crisis" in the project following the withdrawal of the original contractors, POSCO E&C and Daewoo E&C.

"Is it impossible because it's in a provincial city? Cheongju was the same"

Jonggu Son, CEO of Shinyoung, is giving an interview to The Asia Business Daily at the Shinyoung headquarters in Gangnam-gu, Seoul on the 10th. Photo by Dongju Yoon

CEO Son commented, "Across the construction industry, the review process for securing contracts in provincial areas has become extremely conservative," and added, "Even if field staff highly rate the business potential, the headquarters review process is often influenced by the bias of 'it's all good, but it's in the provinces.'"

He continued, "When we first started the 'Cheongju Gwell City' project, which is similar in scale to Champions City, nobody paid attention to it," adding, "It was located in a sub-center, far from the city center, but we made it a success. Champions City actually has a better location than Cheongju." Cheongju Gwell City is the largest privately-led mixed-use complex in Korea, developed by Shinyoung Group in the Daenong District of Cheongju, North Chungcheong Province, with 4,852 housing units. By attracting Hyundai Department Store as an anchor facility and establishing a large academy district, it is now called "Daechi-dong of Cheongju."

One year of on-site research to understand the market... Targeting Gwangju's consumption patterns and passion for education

The foundation of this confidence lies in persistent pre-market research. CEO Son said, "To verify the data, we thoroughly gauged public sentiment from the ground up," and added, "Over the past year, our staff met with 90% of the 3,510 real estate agencies in Gwangju and conducted in-depth interviews with local asset holders."

Through this process, CEO Son identified Gwangju's unique consumption patterns and strong emphasis on education. He noted, "If you visit downtown Gwangju, you'll see as many luxury imported sedans worth hundreds of millions of won as in Gangnam, Seoul," and added, "There are plenty of truly wealthy people with purchasing power, but there simply haven't been high-end products that meet their standards." In fact, through VIP interviews, Shinyoung found that a pre-sale price 15% higher than expected would still be acceptable to the market.

He also identified a paradoxical opportunity in the education market. CEO Son explained, "Gwangju has traditionally had a strong focus on public education, but paradoxically, parents' desire to provide differentiated educational opportunities for their children is more intense here than anywhere else." To address this demand, Shinyoung is making efforts to attract a renowned English kindergarten located near Jeju International School.

Drawing on his background as a "distribution expert" from Lotte Shopping, CEO Son is also focusing on securing killer content that will attract significant foot traffic to the commercial area. He stated, "We are working to fill the development with demand-driven killer content, such as a fashion platform like Musinsa to attract younger consumers and a university hospital-level health screening center," and added, "We are also exploring, in cooperation with Gwangju City, the possibility of attracting a branch of the National Assembly Library to the public office site within the complex."

Only affiliate CEOs gather for intense debates... "Maximizing value chain synergy next year"

Jonggu Son, CEO of Shinyoung, is giving an interview to The Asia Business Daily at Shinyoung headquarters in Gangnam-gu, Seoul on the 10th. In the front left, there is a model of the 'Brighton Yeouido' complex in Yeouido-dong, Yeongdeungpo-gu, Seoul, developed by Shinyoung. Photo by Dongju Yoon

Despite the downturn in the construction industry, Shinyoung's bold investments are backed by a robust "value chain" and strong performance. Shinyoung has established a lineup of affiliates covering the entire development process: development (Shinyoung), construction (Shinyoung C&D), leasing and advisory (Shinyoung Asset), service operations (SL Platform), and fund management (Brighton Asset Management).

CEO Son explained, "Since the second half of last year, instead of issuing vertical instructions from the parent company (Shinyoung), we have established a system that pursues organic cooperation among affiliates through meetings of affiliate CEOs." The six CEOs of the affiliates meet regularly two or three times a month and, when necessary, hold additional meetings during the week to brainstorm together.

He emphasized, "These are not just reporting sessions, but intense debates where we even argue face-to-face over issues," adding, "Since only the CEOs attend without any staff, if you are not fully familiar with the details, you can't even participate, which keeps everyone on edge." Chairman Jeong Chunbo, the group owner, also encourages such constructive debates. CEO Son added, "If we report that a decision was made unanimously, the chairman actually asks, 'Why was there no dissenting opinion?'"

Next year, the plan is to further strengthen value chain synergies. CEO Son said, "Whereas in the past the parent company took the lead, starting next year, affiliates will proactively discover new business opportunities, with the others providing support, thereby intensifying collaboration," and added, "Each company must act as a 'main player' with its own competitive edge to maximize synergy for the entire group."

Unlike most developers, who struggled with negative growth last year due to high interest rates and the project financing (PF) crisis, Shinyoung achieved sales of 975.4 billion won and operating profit of 103.1 billion won, representing year-on-year growth of 24.7% and 40.3%, respectively. Achieving double-digit growth during a downturn has become the driving force behind bold investments such as the Gwangju project.

Regarding overseas expansion, CEO Son emphasized "selection and concentration" and took a cautious stance. He said, "Overseas markets such as the United States have laws and business environments that differ from those in Korea, making it difficult for Shinyoung to exercise the proactive planning and operations we pursue," adding, "Rather than simply investing funds for financial returns, we plan to focus on projects where Shinyoung can take the lead."

Looking ahead, CEO Son predicted that the future of developers lies in "operations" rather than "pre-sales." He stated, "It is now difficult to survive with a one-off business model of buying land, building, and selling," adding, "Like Mori Building, which created Roppongi Hills in Japan, we will transform our structure into an 'operational developer' that takes responsibility for everything from planning and construction to post-completion operations, thereby generating sustainable profits."

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