There is interest in whether Hyundai Motor Group can complete the necessary procedures for the Global Business Complex (GBC) project being built in Samsung-dong, Gangnam-gu, Seoul this year. Hyundai Motor Group has decided to invest $21 billion (approximately 30.74 trillion won) in the United States from this year until 2028, which limits its ability to construct a high-rise building, and the Seoul city government is concerned about the continued delays in the project while insisting on building a landmark building in Gangnam.
According to Hyundai Motor Group on the 5th, the Seoul city government plans to hold a negotiation coordination council this month to discuss the GBC development plan submitted by Hyundai Motor Group. The council will review the appropriateness of the plan and coordinate measures for amendments and improvements. Private and public experts from various fields, including urban planning, architecture, transportation, and environmental areas, will participate along with officials from the Seoul city government and Hyundai Motor Group.
On February 21, Hyundai Motor Group submitted a GBC development plan that changes the integrated office building from one 105-story building to three 54-story buildings. Hyundai Motor Group purchased the land where Korea Electric Power Corporation's headquarters was located for 10.5 trillion won in 2014. At that time, Chung Mong-koo, the chairman of Hyundai Motor Group, envisioned building a high-rise building with over 100 floors on this site, and the Seoul city government provided many benefits, including increasing the floor area ratio from 250% to 800% based on that premise.
Since then, the GBC project has stagnated for 11 years. This is because, with the transition to the leadership of Chairman Chung Eui-sun, Hyundai Motor Group shifted its strategy to invest in new technologies and overseas plant construction instead of focusing on incurring significant expenses to build a high-rise building. In response, the Seoul city government has insisted on building a high-rise building according to the original plan and has been unable to reach a compromise.
High-rise buildings generally incur significantly higher construction expenses than regular buildings due to different materials and construction methods and increased regulations. The construction industry estimates that when the number of floors increases from below 50 to above 60, construction costs increase by at least 25%. If a building over 100 floors is constructed as per the original GBC plan, the construction costs and timeline will increase even further.
An industry insider noted, "Hyundai Motor Group is reviewing plans to attract external investment for one of the three GBC buildings in order to reduce financial burdens and is not in a position to turn to the construction of a building over 100 floors, which is estimated to exceed 5 trillion won."
There is interest in whether there will be a shift in the Seoul city government's position, which has insisted on building the GBC as a high-rise building. Seoul Mayor Oh Se-hoon recently lifted the land permit area regulations that had been designated for the so-called 'Jamsamdaechung' areas, including Jamsil-dong, Samsung-dong, Daechi-dong, and Cheongdam-dong, after they were lifted for the first time in four years, but quickly reimposed the restrictions on Gangnam, Seocho, Songpa, and Yongsan districts when housing prices skyrocketed.
Expectations arise that it will be realistically difficult for the Seoul city government, which has faced criticism for reversing real estate policies, to continue insisting on the construction of high-rise buildings by stating they intend to build a landmark building in Gangnam. Given the challenges faced by all corporations since the inauguration of the Donald Trump administration, there is significant concern that they may face criticism for increasing burdens on corporations.
Hyundai Motor Group plans to complete all procedures necessary for the construction of the GBC within this year. Last month, it also disclosed an additional plan to create large green spaces within the complex and consider regional connections, as per the requests of the Seoul city government. The Seoul city government stated that it would proceed with the authorization negotiations as quickly as possible, taking into account the current economic downturn and other situations.