[Yeouido Renaissance] Yeouido Reborn as an International Financial City... Capital and High-Income Human Capital Converge

Yeouido, from the Mecca of Korean Finance to a Global Financial City
The Central Road Dividing East and West, the Core of the 'Korean Manhattan'

If the approximately 1.6 million㎡ Yeouido Park and surrounding reconstruction complexes in Seoul are developed, Yeouido will be reborn as an area comparable to global major cities. In particular, there is growing anticipation that capital and human resources will once again flock to the Dong-Yeouido area, the mecca of Korean finance, where the Korea Exchange, securities firms, and financial institutions are concentrated. Various regulations have caused development stagnation in Dong-Yeouido, leading to issues such as aging infrastructure and weekend/nighttime depopulation. If residential development is combined with tax incentives to accelerate the relocation of financial companies and fintech firms, it is expected to not only advance the financial industry but also stimulate the domestic economy through the revival of commercial districts via housing market and consumption activation.

The ‘Yeouido Financial Hub District Unit Plan’ announced by the Seoul Metropolitan Government last May contains plans to develop Yeouido into a global financial city. The Dong-Yeouido area is home to the Korea Exchange, a long-standing institution, as well as 28 major securities firms, financial investment companies, the Financial Supervisory Service, and the Korea Financial Investment Association. Through this plan, Seoul intends to develop the 1.12 million㎡ Dong-Yeouido area by dividing it into the ‘International Financial Hub District,’ the supporting ‘Financial Business Support District,’ the ‘Urban Residential Complex District’ consisting of four reconstruction complexes?Jinju, Sujeong, Gongjak, and Seoul?and other areas designated as the ‘Urban Function Support District.’ Floor area ratios, height standards, and incentives based on recommended industries will vary according to the district’s designated use as envisioned by Seoul.

De facto abolition of height restrictions... Ultra-high-rise buildings like Lotte World Tower now possible

According to the plan, the Financial Special Development Promotion District within the International Financial Hub District is designated as a ‘zone where land use can be adjusted,’ allowing the land use to be upgraded from General Commercial Area (floor area ratio 800%) to Central Commercial Area (floor area ratio 1000%). The Financial Special Development Promotion District, where the Korea Exchange is located, will become the third Central Commercial Area in Seoul after Myeongdong and Sangam-dong.

Seoul plans to upgrade the land use of the Financial Special Development Promotion District to Central Commercial Area in exchange for public contributions (donations in kind) to renovate spaces for financial support institutions and roads. If selected through a public contest for creative and innovative design, buildings can receive incentives applied to eco-friendly architecture, allowing a floor area ratio of up to 1245%.

Construction of ultra-high-rise buildings over 350 meters will also be possible. Considering that the tallest building in Yeouido currently is Park One at 333 meters, this effectively means height restrictions have been abolished. It also means that building the tallest structure in Korea, the Jamsil Lotte World Tower (555m, 123 floors), in Yeouido is permitted.

With high-density development possible, companies owning such buildings can seek rental income or improve productivity. For example, if Company A currently employs 5,000 people in a 5-story office, expanding it to 50 stories could accommodate 50,000 people. This would not only absorb more workforce in Yeouido but naturally lead to increased consumption, positively impacting commercial districts.

Capital and skilled workforce flocking to Yeouido... Central road emerging as the core of the 'Korean Manhattan'

Seoul plans to attract financial companies to the Central Commercial Area. Even if landowners do not upgrade their land use to Central Commercial Area, financial firms such as banks, insurance companies, and fintech firms moving into buildings will be granted up to an additional 20% floor area ratio. Yeouido experiences severe nighttime depopulation as the floating population leaves on weekends and nights. To prevent this, Seoul will also increase residential facilities.

If the project proceeds as planned by Seoul, Yeouido is expected to be reborn as an ultra-high-rise international financial city where residential, business, and commercial functions are well integrated. Riding this momentum, companies are also expected to relocate to Dong-Yeouido. Yeouido already serves as an alternative to the expensive and nearly vacancy-free Gangnam office market. However, once development in Yeouido begins, demand from companies aiming to capitalize on Yeouido’s own geographical advantages, rather than as a Gangnam substitute, is expected to increase.

The central road dividing east and west Yeouido is expected to become the core of the ‘Korean Manhattan.’ Currently, the National Federation of Economic Organizations building (Jeongyeongryeon Hall), a Yeouido landmark with 50 floors above ground, 6 underground floors, and a height of 246 meters, is located here. Renamed the ‘Korean Economic Association (Hangyeonghyeop)’ and declaring a fresh start, Jeongyeongryeon plans to actively operate as a global think tank representing the economy and propose directions for the Korean economy. In April this year, the Marriott Executive Apartments Seoul, the only luxury residence hotel in Korea with a 5-star rating, meets the needs of tourists and overseas investors visiting for business. The Hyundai Seoul and IFC Seoul are also prominent in the retail market, and the ‘Park One Tower,’ completed in July 2020, has taken the title of ‘the tallest building in Yeouido’ from the 63 Building. The LG Twin Towers, located at the end of the central line, represent Yeouido’s high-rise architecture alongside the 63 Building and are widely regarded as monumental structures showcasing Korean architectural standards to the world.

The relocation of financial firms has already begun. Recently, ‘SBI Savings Bank’ leased 180 pyeong in the Kyobo Securities Building, and Aequan Capital signed a lease contract for about 2,600 pyeong in the Hyundai Card Building 3. Kiwoom Securities plans to rebuild its headquarters, and Shinhan Investment Corp. decided to move into the Seoul Hall of the Private School Teachers’ Pension (Sahakyeongeum) located in front of Yeouido Station Exit 1. The new Sahakyeongeum Seoul Hall ‘TP Tower,’ scheduled for completion next year, is a large office building with 6 underground floors and 42 floors above ground.

Expectations are growing that Yeouido’s development will attract investments from global companies. Song Seung-hyun, CEO of City and Economy, said, “Attracting global companies not only means corporate relocation but also brings in foreign capital and high-income talent. When high-income talent resides in the area, it raises local income and positively affects consumption and housing prices.”