Jan 27, 2014

Samsung, Hyundai vie for Gangnam syle site

A bidding war is heating up between the nation’s two top conglomerates Samsung and Hyundai as the two are seeking to secure an 80,000-square-meter site in the affluent district of Gangnam in southern Seoul.

According to industry sources on Monday, Hyundai Motor Group has recently expressed its intention to acquire the lucrative property, which is currently owned by Korea Electric Power Corp.

The Korean auto giant is said to be hoping to relocate its existing Yangjae headquarters to the site. This is part of efforts to create its own global business hub that supervises overseas operations, especially research activities, and features a lavish brand museum, much like its global rivals.

The carmaker has long wished to have a new, fancier Seoul headquarters that can represent its renewed global status. But after years of efforts, it has failed to secure a proper site thus far.

Until recently, Hyundai had planned to build a 110-story landmark building in Seongsu-dong, eastern Seoul. But the ambitious plan was put in jeopardy last year due to resistance from the city government and residents there.

Then came the bid for the Gangnam site, which Samsung Group has also long been eyeing for a large-scale shopping complex.

“The site is almost the last hope for Hyundai,” said an industry source who declined to be named. “It is crucial for the carmaker to have a landmark building that can show off its renewed brand status.”

If Hyundai secures the site as it hopes, the new headquarters would be the largest one owned by a Korean conglomerate here.

The 80,000 square-meter site is expected to be three times larger than “Samsung town” in Seocho-dong, southern Seoul, and six times larger than the LG Twin Tower in Yeouido, western Seoul.

Industry watchers also point out that securing the site is also a profitable investment as it is located near several five-star hotels and the nation’s largest convention hall Coex. The land price alone is estimated at 2 trillion won.

Experts added that Hyundai and Samsung could be seeking to create a separate consortium with other investors to secure the site.

Ahead of its planned relocation to Naju, South Jeolla Province, in November, the state-run power agency KEPCO aims to sell off the site in the coming months. The final bidder is expected to be decided as early as November.