Suncheon city government is grappling with a near-total pre-sale failure at its Yeonhyang-deul quasi-residential zone, a prime development site it had counted on to repay hundreds of billions of won in municipal debt.

Development land at Yeonhyang-deul, adjacent to Suncheon Bay National Garden (left). [Photo: Suncheon City]
Development land at Yeonhyang-deul, adjacent to Suncheon Bay National Garden (left). [Photo: Suncheon City]

Suncheon City's Yeonhyang-deul urban development project — a publicly led initiative spanning the Yeonhyang-dong and Haeryong-myeon areas with a total project cost of 431.9 billion won ($313 million) — has recorded extremely sluggish land sales despite its location at a major transportation hub.

With pre-sales stalling, Mayor Son Hun-mo, who took office in July, has halted land sales operations and signaled the possibility of revising the land-use plan, citing potential future uses such as a second round of government public-institution relocations or a site for a Suncheon National University Hospital.

According to the city, pre-sales of quasi-residential plots in the Yeonhyang-deul urban development district — covering 488,000 square meters — began in late last year to support the project's stable development, but only 5 of 47 plots have sold, leaving the pre-sale rate at just 10 percent.

The quasi-residential plots, which allow construction of commercial buildings and multi-unit housing such as studio apartments, are subject to restrictions capping buildings at five stories, with a building-to-land ratio of no more than 70 percent and a floor-area ratio of no more than 350 percent.

In an attempt to ease the financial burden on buyers, the city introduced a 12-month installment payment option for winning bids, but the measure produced little effect. Mayor Son suspended pre-sale operations on a temporary basis after taking office in July.

Suncheon City had issued 111.3 billion won in municipal bonds to fund the Yeonhyang-deul project, planning to use land sale proceeds to repay the debt early — but that plan has now run into trouble.

One factor behind the weak sales is the pre-sale price, which runs between 7 million and 8 million won per 3.3 square meters, drawing complaints that it is too expensive. That is higher than the 6 million to 7 million won per 3.3 square meters charged for neighborhood-facility plots in the Seonwol district housing development.

Another drag on sales is the planned location within the Yeonhyang-deul site of a city public resource facility — a municipal waste incinerator — which prospective buyers cite as a concern.

An official from the city's Urban Strategy Division, the department overseeing the project, said potential buyers frequently ask whether the incinerator will be built as planned or scrapped entirely.

Additional factors weighing on demand include uncertainty over whether a luxury hotel and convention center will actually be built following an MOU signed with a restaurant-industry company during the tenure of former Mayor Noh Gwan-gyu, as well as a broader shift of investment capital away from real estate and toward equities amid the semiconductor boom.

A city official said the pre-sale suspension also reflects the need to keep large plots available should the government proceed with a second round of public-institution relocations to regional areas. The official pushed back on comparisons to pre-sale prices in the Ocheon district a decade ago, saying that inflation and other factors make it impossible to conclude that pricing alone is responsible for the unsold units.

The Yeonhyang-deul development zone, well situated for access to Yeosu and Gwangyang, is planned as a mixed-use complex incorporating commercial facilities such as hotels and resorts, quasi-residential plots, apartment complexes, and office, retail and public-use land. Site preparation work is scheduled for completion in the first half of 2029.


parkds@heraldcorp.com