Luxury makeover for restless Seoul
Foreign and local developers have designs on upscale lifestyle
Observing the cranes dominating Seoul's smoggy skyline as South Korea prepared for the 1988 Olympics, expatriates used to joke: Will this city ever be finished?
Apparently not. With Asia's third-largest economy belatedly prioritising quality of life, Seoul's bleak architecture is getting a makeover with a range of new, world-standard developments.
The players are no longer just South Korea's giant conglomerates. Foreign developers are importing expertise, keen to cash in on the booming leisure sector since a five-day work week was implemented last year.
'This is our first project in Seoul - a major mixed-use development next to a park,' said British-based architect Richard Rogers, who visited Seoul last week for the announcement of Parc1, a development encompassing two hotels, a shopping mall and office space on Yeouido Island. Work on the project is expected to begin next year.
Australian Peter Walichnowski, chief executive of Skylan Properties Korea, the Asia-based developer behind Parc1, said the project was of a scale and sophistication that would be attractive to any developer - US$1.8 billion. 'There was no benchmark for this,' he said. 'Nobody local had a track record, but we are not blinded by local tradition or convention.'
Seoul boasts mixed-use sites such as Coex and Central City, but experts criticise these for lacking natural light and offering claustrophobic retail zones.
Parc1 is not alone. On a lot next door, AIG and Seoul City are preparing a separate mixed-use project. Last week, the provincial government said it was negotiating with Disney to build Disneyland Korea. But even these billion-dollar plans pale beside New Jersey-based Gale International Korea's project.
'This 607-hectare city on reclaimed land off Incheon in the Yellow Sea is the most complex project we know of,' said John Hynes, Gale's chief executive. 'We believe it is the largest private sector real estate project in the world.'
Songdo New City, which broke ground last year, is designed to create the upscale lifestyle South Korea does not yet offer. Set around a central park and bisected by canals, it will house international schools and hospitals. To date, US$1.5 billion has been invested but when it is completed in 20 years, that figure may top US$20 billion.
Foreign developers are relative newcomers to South Korea.
'Before the economic crisis, Korea had one of, if not the most closed real estate markets in Asia,' said TimothyTrinka, a United States attorney at Seoul law firm Bae, Kim and Lee. 'A key government crisis response in 1998 was to open the market virtually overnight.'
In the first phase of subsequent foreign market entry, investment funds acquired distressed assets such as office buildings. Leisure- and lifestyle-focused complexes are the flavour of the month.
But challenges persist. The government is cracking down on property speculation. And local interest groups routinely demand payoffs from builders by threatening to protest against developments.
An observer said: 'There are so many ministries, so many levels of government - national, provincial, municipal. All have agendas. The difficulty is aligning them.'
Even so, optimism prevails.
'As Korea discovers and embraces leisure, destination malls, resorts, marinas and theme parks will be developed,' Mr Trinka said. 'What separates Korea from many countries is that it needs a lot of stuff and largely has the money to pay for it.'