Buhyung Group is set to advance the development of the long-stalled Buhyung Hotel site in Seongsu-dong, Seongdong-gu, Seoul, which has been inactive for 17 years. The company plans to create a high-end mixed-use complex that combines residential, hotel, and cultural facilities, expanding its business scope beyond just housing.
According to the construction industry on May 13, Buhyung Group has recently begun design modifications for the 10,900-square-meter site in the Ttukseom district of Seongsu-dong. The site, which was acquired from the city of Seoul for 370 billion won in 2009, is now estimated to be worth between 5 trillion and 6 trillion won due to rising land prices.
Earlier this year, following Chairman Lee Joong-geun's commitment to resume the project, groundwork and other preliminary construction activities were restarted. However, the project is currently on hold for design changes aimed at optimizing certain structural elements and internal facilities to align with recent market trends.
The plan includes two mixed-use buildings with eight underground floors and 49 above-ground floors. The large-scale project will feature a five-star hotel with 604 rooms, 332 residential units, and a multipurpose performance venue with approximately 900 seats. Industry experts believe that Buhyung's design modifications will further enhance the luxury aspect of the residential sector, considering the market prices of nearby high-end complexes like Acro Seoul Forest.
A Buhyung representative stated, "The design changes are being made within the framework of the original plan, and we aim to commence full-scale construction and project execution by the end of the year."
From a financial perspective, the Seongsu-dong development is a pressing issue. To alleviate the financial burden on some subsidiaries, such as Donggwang Housing, which have seen their debt ratios rise due to land acquisitions in Hannam-dong, early sales and cash flow generation from the Seongsu-dong site are essential.
Buhyung is also preparing to develop other key sites, including the Yongsan Asia Apartment site, but its current focus appears to be on Seongsu-dong.
Changes in the external environment are also a factor in the project's revival. In response to the government's tightening regulations on non-business real estate, Buhyung is actively pursuing tangible project execution. This clarifies that the company is not merely holding onto idle land but is committed to its core business objectives through direct construction and supply of designated project sites.
However, Buhyung faces challenges due to unfavorable construction conditions. Concerns are being raised internally about the timing for actual construction, given the rising costs of raw materials and labor. In a high-inflation environment, creating a large-scale high-end mixed-use complex could pose significant profitability challenges.
A Buhyung Group official remarked, "Preparations for project resumption are underway across the company, and recent hiring efforts support this initiative. We will finalize specific project details once the design modification process is completed."
* This article has been translated by AI.
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