Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Can Seoul succeed in transforming Yeouido into a global financial hub?
A night view of Seoul's Yeouido, with the current tallest building in the region, Parc.1, at the center / Courtesy of LG Energy Solution
By Lee Yeon-woo
Yeouido's building height cap lifted
By Lee Yeon-woo
Seoul revealed its blueprint to establish Yeouido as a global financial hub, but concerns are rising that the city still has a long way to go before it can emulate its models ― London and Singapore.
On Thursday, Seoul began soliciting public opinions on its plans to elevate the environment of the district to international standards, as part of its aim of transforming the city into a global financial hub.
The city plans to scrap height limits on new buildings and boost the floor area ratio to up to 1,200 percent. That is expected to pave the way for a dynamic skyline with the construction of a skyscraper standing 350 meters tall, surpassing the height of Parc.1 (333 meters), the current tallest building in Yeouido.
“Yeouido is an area that requires flexible planning as various projects such as the financial center district plan, the apartment district plan and the second Sejong Cultural Center are being promoted simultaneously,” said Cho Nam-joon, chief of the urban planning bureau at the city government. “We hope that Yeouido will leap forward as an international digital finance hub, moving away from a paradigm centered on regulation (with these measures).”
Since the district was designated as a financial hub by the Financial Services Commission (FSC) in 2009, along with Busan's Munhyeon Industrial Complex, it has become home to many of Korea's major financial firms. The Financial Supervisory Service (FSS), 28 large securities firms and numerous investment firms have all established their presence in the district.
However, some raise skepticism that simply allowing super-tall buildings in Yeouido won't be enough to attract global financial companies to set up operations there.
Unlike in Munhyeon Industrial Complex, financial firms in Yeouido have not received reductions in income and corporate tax, given that the district is located in a densely populated area of the capital city.
The Assembly is currently considering a revised bill, aiming to exempt firms established or opening new operations in Yeouido from all income and corporate taxes for three years and reduce the taxes by half for an additional two years. However, it's stalled in the legislative process as some argue it hinders balanced development between regions.
Seoul Mayor Oh Se-hoon pointed to this issue as well during his visit to London in March, stating that the city will actively support the passage of the bill.
It is also unlikely that the five major financial groups in Korea will set up new operations or move their headquarters to Yeouido.
Hana Financial Group is already in the process of establishing a base of operation, named Hana Dream Town, in Cheongna International City, aiming to complete it by 2025. KB Financial Group completed its move to Yeouido in 2020. The remaining groups, Woori, Shinhan and NH Nonghyup, currently have no plans to establish new headquarters.
The potential relocation of the Korean Development Bank (KDB) from Yeouido to Busan also appears to be a hurdle to Seoul's initiative. The move, one of President Yoon Suk Yeol's presidential election pledges, is gaining momentum as the bank is currently preparing a blueprint for its relocation.