Woo Oh-hyun, chairman of SM Group, and his son Woo Gi-won, CEO of SM HiPlus, recently won the bid for a building and land in Daegu that has remained unfinished for over 30 years through a personal company. There is growing interest in the background behind the purchase of the long-abandoned building.

The company Najin acquires land and building located at 416-2 Bukhyeondong, Bukgu, Daegu Metropolitan City. /Courtesy of Naver Map

CEO Woo Gi-won’s personal company, Najin Co., Ltd., announced on the 9th that it won the bid for 'land and building located at 416-2 Bokhyeon-dong, Buk-gu, Daegu' in a real estate public auction held by the Korea Housing and Urban Guarantee Corporation (HUG) for 14.2913 billion won. This amount is 1.3 million won higher than the minimum bid price of 14.29 billion won.

The bid price is about half of the appraisal value submitted by two appraisal companies last year, which ranged from 27.2 billion to 28 billion won. The appraised value of the land (area 2,783.6 square meters) was between 11.1 billion and 11.3 billion won, accounting for about 80% of the winning bid price.

The building was initiated in 1989 near the bustling Daegu Bokhyeon Intersection, with a scale of 7 underground floors and 17 above-ground floors. It was once called Golden Tower Plaza. However, construction was halted in 1999 when the completion rate reached 82%. After HUG began the public auction to recover the guarantee fund in 2020, it succeeded in selling the property about five years later after several failures.

The company Najin acquires land and building located at 416-2 Bukhyeondong, Bukgu, Daegu Metropolitan City. /Courtesy of Naver Map

Najin Co., Ltd. stated that it would secure the acquisition funds through loans. It is estimated that Najin borrowed 1.5 billion won from its affiliate Kyungnam Enterprise on the 29th of last month to be used for the down payment of the winning bid. CEO Woo provided 65 shares of Samramidas common stock as collateral during the borrowing process.

Najin Co., Ltd. is a company aimed at real estate development and supply. CEO Woo is the only member of the board of directors. Since its establishment in November 2021, it has not generated any revenue and was in a state of capital impairment by the end of last year. Najin has previously purchased land in Seoul and Gwangju through court auctions, but the acquisition costs ranged from 500 million to 600 million won, which were not substantial.

SM Group stated regarding Najin's acquisition of land and buildings in Daegu that it is for "long-term development purposes, but there are currently no specific plans such as sales."