Yeouido finance center troubled by low occupancy

The International Finance Center opened last year in Yeouido, the financial nerve center of Seoul, with an ambitious goal of becoming a Northeast Asian financial hub. But a sluggish real estate market is pulling down the occupancy rate.

The center also is failing to attract international financial firms, contrary to its initial expectations.

The Seoul City government, under a memorandum of agreement with the operator AIG Real Estate Development, started the IFC complex project in 2006. Construction was completed in 2010. 

In a rare case, the project was based on a pre-leasing system, and the complex saw an occupancy rate of 76.6 percent for the 32-story One IFC building which opened in August last year. It was the first of the three high-rise office buildings to open.

The other two buildings are scheduled to open next month, but in the 29-story Three IFC, none of the office spaces have been rented out, according to Rep. Lee Yoon-suk of the main opposition Democratic United Party.

Of the 55-story Two IFC building, just 8.7 percent has been rented out.

Lee, citing city government data, said on Wednesday that a total of 24 financial companies have moved into the complex, along with nine non-financial organizations and two amenity stores.

Of them, the number of foreign companies is only 16 and more than half of them had already been located in Korea before moving into the complex, he said.

“Adding to the low occupancy rate at office buildings, the complex failed to attract international financial firms. Now they are just concentrating on advertising the shopping mall,” Lee said.

“Even though the original goal was to create a financial hub in Northeast Asia, now I wonder whether it was about opening a shopping mall or running a financial center,” he said, referring to the three-story shopping mall beneath the complex, which opened in September.

The shopping mall, clustered with international clothing brands, has become a popular new shopping spot.

Considering the sluggish property market here and that AIG was hit hard by the global financial crisis in 2008, future expectations for the complex do not seem promising either, the lawmaker added.

By Lee Ji-yoon (jylee@heraldcorp.com)