Large-scale mixed-use development around Seoul Forest is gaining momentum as the Sampyo ready-mix concrete site and Booyoung's Ttukseom site in Seoul's Seongsu-dong both cleared architectural reviews. The two projects will build apartments, lodging facilities and large office and cultural complexes on roughly 47,000 square meters of prime land in Seongsu. But permit procedures have emerged as a variable, and financing costs are piling up quickly, swelling what amounts to a bill for waiting on approvals.
SP Seongsu PFV, the developer of the Sampyo ready-mix site, disclosed on the 16th that it had expanded its borrowing agreement with financial institutions to 760 billion won ($530 million), according to construction and financial industry sources on the 18th. The move extends by another year the maturity of a 640 billion won bridge loan that had already been increased once in 2024, raising the borrowing agreement by 120 billion won. The company had targeted a groundbreaking by the end of this year, but with permit procedures dragging on, it extended the bridge loan maturity ahead of a conversion to full project financing.
Sampyo said the additional funds include some project costs such as design fees, but that covering financing costs accounts for the bulk of the amount. A bridge loan is borrowing used to secure land and cover early project costs, and interest must be paid until the loan converts to full project financing (PF). The longer the permit timeline, the more financing costs mount to keep the project alive.
The delay in breaking ground by year-end stemmed from the Ministry of Land, Infrastructure and Transport putting its metropolitan area readjustment review on hold. In July, the working committee on metropolitan area readjustment suspended its decision on the "Seoul city plan for use of the former site," the Sampyo ready-mix land, and called for supplementary material on the development plan's public interest, population inflow and wide-area transportation measures. In particular, it asked for a clear explanation of whether a plan centered on ultra-high-priced apartments with a main unit type of 260 square meters of exclusive floor area, along with a six-star hotel, meets the public welfare purpose set out in the Metropolitan Area Readjustment Planning Act. The committee also found limits to measures for curbing population inflow such as minimizing employment numbers, and ordered effective mitigation plans to be drawn up again. It further required traffic impact analysis and improvement plans at the level of the wide-area arterial road network, as well as completed consultations with the Ministry of National Defense on matters including height limits. The developer must now explain the impact on surrounding traffic and urban functions, beyond the individual building plan.
Sampyo recently resubmitted the supplementary documents and is awaiting a follow-up review. "We are targeting conversion to full PF in the first half of next year, but that too depends on clearing the metropolitan area readjustment review," a Sampyo official said.
The 28,000-square-meter Sampyo ready-mix site, located between Seoul Forest and the Han River, was used as a ready-mix concrete plant from 1977. A plan to build the Hyundai Motor Group headquarters there was once floated but fell through, and a mixed-use development plan took shape from 2023 through pre-negotiations between the Seoul city government and the private sector. The plan that cleared the city's architectural review in July calls for a residential tower of up to 81 floors and a 53-floor office complex on the roughly 28,000-square-meter site. It includes 403 apartment units, 61 officetel units — studio units used as either homes or offices — and 130 hotel rooms, along with office, retail and cultural facilities. Also included are transportation improvements and a unicorn startup hub funded through about 608.1 billion won in public contributions.
The nearby Booyoung site is also moving through follow-up steps on a development long at a standstill. The roughly 19,000-square-meter Ttukseom site, which Booyoung bought for about 370 billion won in 2009, cleared the Seoul city architectural review in September with a plan for a building of up to 49 floors, 383 apartment units, 622 lodging rooms and a 903-seat performance hall. It came 17 years after the land purchase. The Booyoung project is now preparing to file for project plan approval, with final reviews of various impact assessments, including a building safety impact assessment, still outstanding. Unlike Sampyo, it is not subject to the land ministry's metropolitan area readjustment review, the company said. With different permit paths remaining, construction at the Booyoung site could begin ahead of the Sampyo site depending on how follow-up procedures progress.
"No matter how much you improve the economics, what matters is making sure permits do not become an additional source of uncertainty," an official in the real estate development industry said. "In the end, how quickly the remaining procedures can be wrapped up within a predictable timeline is the key to reducing extra cost burdens."