By Jane Han
Staff Reporter
The two state-of-the-art property development projects ― Seoul International Finance Center (SIFC) and Parc1 ― currently under construction right across the street from each other in Yeouido have been continually compared to one another from the start.
Both ― designed to be super tall, eco-friendly modern mixed-use complexes ― have positioned themselves to secure top corporate tenants and become the city's landmarks by 2011. But with two years left until their target completion date, neither seems to be on top of their schedules.
Parc1, which is being developed by Skylan Development, is on the brink of losing its biggest investor Mirae Asset, according to industry sources.
``Mirae is looking for an out as the project is having financing issues,'' said one official familiar with the situation, who declined to be named. Last year, Mirae Asset pledged to invest 900 billion won in the 2.3-trillion-won building, comprised of two office towers, a hotel and shopping complex.
The official said construction has more or less stopped, delaying the completion date to 2013 at the earliest.
However, both Mirae and Skylan fended off the rumors.
``There are always minor slowdowns in major projects like Parc1,'' said a Skylan spokesperson, who stressed that the construction is making progress ``on schedule for completion in 2011.''
With possible delays aside, Parc1 has so far secured no pre-leasing commitments to fill the giant office space.
``There are just not that many tenants out there interested,'' said one industry source close to the situation, who also didn't want to be identified. ``Companies don't feel comfortable moving in this kind of economy, and they don't feel comfortable with Yeouido.''
The country's financial district, a large island on the Han River, is home to many domestic financial firms, but hasn't been a popular choice among foreign brokerages, who mostly prefer the Central Business District (CBD) in downtown Seoul.
In terms of leasing, SIFC is winning the battle, he said, ``but both are still behind in locking in tenants.''
Deloitte is the first and only company that signed in May to lease nine floors of SIFC, but no further commitment has been made since.
Despite the turnout, the Seoul Metropolitan Government ― which is working together with AIG GRE, the real estate investment arm of the beleaguered insurance firm AIG ― is sticking to its preference for global financial firms.
Its plan is to lease the building only to multinational corporations to help raise SIFC and Yeouido's profile as ``Asia's Wall Street.''
``We have a vision for the project and we're going to keep pushing for it,'' said Cho Young-jin, a Seoul City official, who added that the city government is in the planning stages to build better infrastructure for foreign businessmen and their families who move to the financial district.
``Detailed plans will be announced in the coming months,'' said Cho, who claims that securing Deloitte will send a positive signal to the market.
Real estate experts agree that the latest deal will prompt more action, but they point out that bigger and better incentives are needed to get companies to move to Yeouido.
``Getting any commitments for capital expenditure is difficult at this point,'' said Darren Krakowiak, head of research at Jones Lang LaSalle, a global real estate consultancy, who explained that incentives such as shouldering moving costs and providing rent-free periods will help companies decide.