This article was published on April 17, 2025, at 11:20 a.m. on ChosunBiz MoneyMove site.
The Seoul Transportation Corporation (Seogyo Construction) has sold the Central Park Tower office in Yongsan District after nine attempts since trying to sell it in 2020 to overcome its deficits. However, the success is not fully satisfying. Seogyo Construction has listed the 5 floors (17th to 21st) it previously sold as a package individually, and the appraised value has been lowered by more than 6 billion won from the initial figure.
On the 17th, according to the investment banking (IB) industry, the sales contract for the entire 21st floor (10 rooms) of the Yongsan Central Park Tower, listed by the Seoul Transportation Corporation through the state-owned property auction system Onbid, was awarded on the 11th. The property has a dedicated area of 873.92 square meters and is the highest of the 5 floors owned by Seogyo Construction. The company is pursuing the sale of a total of 49 office facilities.
Four bidders participated in this auction, with the highest bid chosen as the winner. The awarded amount is 13.75 billion won, which is very close to the appraisal value of 13.7 billion won as of February 7 (awarded price rate 100.35%). The contract must be executed within 10 days of the award date, and the winning bidder must pay a cash deposit of 10% of the awarded amount. Additionally, the bid amount does not include value-added taxes, and a separate payment for value-added taxes for the building portion amounting to 45% of the sales price must be made.
Until last year, Seogyo Construction had intended to sell the entire office facility of 5 floors, including the 21st floor, at once, as a way to secure funds by selling one of its larger assets, the Central Park Tower office, due to increasing annual deficits. Seogyo Construction has recorded net losses of 642 billion won in 2022, 517.3 billion won in 2023, and 723.7 billion won in 2024, continuing to post deficits each year. Consequently, it started the sale process in 2020 and began its first public announcement in December 2022, but all attempts ended in failure. There were frequent instances where no one participated in the bidding.
As no buyers appeared, Seogyo Construction lowered the appraisal value of the 5 floors at the end of last year from the previous 71.9 billion won to 65.8 billion won. This decision came after market voices suggested the price was high, effectively decreasing the value by more than 6 billion won. However, there were still no bidders, and concerns about the price being burdensome persisted. Moreover, increasing political and economic uncertainties led to a continued downturn in the real estate market, causing the sale to become shrouded in uncertainty.
Seogyo Construction has interpreted this move as changing its strategy to sell the floors individually this year. Although the popular 21st floor has been sold, it is viewed within the industry that selling the remaining floors will take time. The properties up for bidding, which have been listed from the day before until May 9, include the 17th floor (5 rooms), the entire 19th floor (10 rooms), and the entire 20th floor (12 rooms), with respective appraisal values of 6.7 billion won, 13.7 billion won, and 15.8 billion won.
A Seogyo Construction official stated, “While the overall amount is burdensome, we believe there is demand for individual floor bidding, so we changed our strategy,” adding, “We plan to sell sequentially from the high-demand upper floors, and if the 20th floor is sold successfully following the 21st floor, we will also announce the sale of the 18th floor.” He also noted, “However, since the 17th floor only has 5 rooms and is not the entire floor, it is necessary to dispose of it quickly, which is why we are announcing its sale first.”
The Yongsan Central Park, completed in August 2020, is located at 98 Hangang-ro 3-ga, Yongsan District, Seoul. It is a large-scale complex facility with a total floor area of 366,426.285 square meters, comprising 9 buildings, and is considered a prime office building in the Yongsan area. Among these, the tower designated for office use comprises 5 basement levels and 33 above-ground levels, with a total floor area of 53,703.77 square meters. This location was built to redevelop the Yongsan District 4 area, which witnessed the tragic demolition incident in 2009 that claimed the lives of 5 residents and 1 police officer.
Seogyo Construction originally owned a 2,215 square meter underground site in the Yongsan District 4 area. After the redevelopment association was formed, it obtained equity in the project and gained this site instead of cash compensation. Seogyo Construction has maintained the 5 floors as vacant up to now, and it is reported in the market that it has had a sale in mind from the start. Other floors are owned by different entities, with digital entertainment corporation Sandbox Network and the Segye Ilbo occupying the premises.
An industry official noted, “Due to its proximity to Yongsan Station, it is believed that companies with headquarters in provincial areas mainly seek it for their Seoul offices.” However, he added, “The rental price at Central Park Tower is about 100,000 won per 3.3 square meters, and simply calculating this, the investment return for Seogyo Construction does not appear to be very high.”