Site of about 870 pyeong (2,874 square meters) appraised at 92.2 billion won

'Pricier than nearby market rates,' official says

Second failed auction after March's unsold result

Location map of the DMC promotional site. [Seoul Metropolitan Government]
Location map of the DMC promotional site. [Seoul Metropolitan Government]

A promotional site (D4) in the Sangam Digital Media City (DMC) in Mapo-gu, Seoul, has again failed to find a buyer in its second public auction.

The auction for the DMC promotional site, which ran from May 28 through June 26, drew no bidders and was declared unsold. It marks the second consecutive failed auction following an unsold result in March.

The site covers 2,874 square meters, or about 870 pyeong (1 pyeong equals 3.3 square meters), and sits at the entrance of Digital Media Street, adjacent to the DMC Culture Park, placing it at the heart of the district. Development is permitted up to a floor-area ratio of 800 percent and a height of 60 meters. The appraised value was set at 92.2 billion won ($59.8 million), with the auction structured to award the sale to the highest bidder at or above that figure. A Seoul Metropolitan Government official said private developers appeared to view the per-pyeong appraised price as higher than nearby market rates of 50 million to 60 million won per pyeong, making the project financially unviable.

The Seoul Metropolitan Government first opened the site to private sale after abolishing its designated use through a district-unit plan revision announced Dec. 4 last year, easing supply conditions to allow a broad range of commercial and business functions without use restrictions. At the time, the city said it hoped "a symbolic building with openness and public character, befitting the central location of DMC, will be built and serve as an opportunity to raise the overall competitiveness of DMC to the next level." The city ran a public auction for D4 from Dec. 26 last year through March 26 but failed to attract any investment demand.

The second auction offered more relaxed conditions than the first. After the initial auction fell through, the city incorporated feedback from the real estate development industry and adjusted the supply terms to expand private development autonomy. The required setback from the western boundary of the promotional site was loosened from "15 meters or more" to "a sufficient distance," and the open lower-floor requirement was changed from "three or more floors" to "a level sufficient to ensure openness." The revisions replaced fixed numerical standards with criteria reflecting design intent and spatial context, broadening the scope for architectural design. The development deadline was also extended to "within five years of ground-breaking," in line with the terms applied to the education and advanced-industry site.

"We eased the conditions to improve project viability, but it does not appear to have had a decisive impact on investment decisions," a Seoul Metropolitan Government official said. "Under current regulations, we can hold one more auction under the existing conditions, but whether to issue a new sale announcement will require internal consultation."

The failed auction has also cast uncertainty over the outcome of the ongoing sale of the education and advanced-industry site (D2-1). That site covers 7,526 square meters, or about 2,276 pyeong, and is zoned as a general commercial area permitting a floor-area ratio of up to 800 percent and a maximum building height of 86 meters. Its base supply price is set at 206.8 billion won. Unlike the D4 auction, the D2-1 site is being offered through a proposal-based competition rather than a competitive bid, with business plans due by Aug. 25. No proposals have been submitted so far.


cook@heraldcorp.com