Korea’s economy is undergoing a shift from an export-led manufacturing market to one centred around domestic growth and improving the population’s quality of life. Against this backdrop, a lack of high quality real estate in the country provides an attractive investment opportunity as businesses and residents increasingly seek to upgrade to modern, well-built and well-located properties.
Young City, a development of over 99,000 sq m of high specification office space in the southwest of Seoul, is an excellent example of how the provision of significant equity capital in a market where such funding is scarce, together with the use of sensitive and market-led design, can help regenerate degraded industrial land and improve the environment and economic prospects for local residents while also generating substantial returns for investors.
With a clear understanding of local market dynamics the Standard Chartered Principal Finance Real Estate team, which transferred to Actis in 2018 spotted the opportunity to build cost-effective, high quality office space to meet demand from local and international businesses for high specification back office space. With adequate capital and full control over design, construction and management, Young City could be developed as a whole site and – importantly – according to the needs of today’s tenants.
Young City’s more than 99,000 sq m floor area is larger than comparable new projects in Seoul and features 12-metre column-free space to accommodate large, open plan offices while also allowing for the easy division of space so that multiple tenants can occupy each floor. Thanks to the partnership with SK D&D and the team’s tight control over the development, it was completed in 2017 – both on time and under budget. The creation of Young City has seen the clean-up of what had been degraded and toxic industrial land, helping to improve the environment for local residents and boosting the local economy.