Hyundai Motor delays start of massive development

Hyundai Motor Group postponed the foundation work for its 105-story new headquarters in Seoul to next July, possibly signaling changes to its plans.

The Global Business Center or GBC is a massive project for Hyundai Motor Group. It is planning an ambitious auto industry hub on land on Samseong-dong in Gangnam District, Seoul, it purchased for a huge price from the state-run electric company Korea Electric Power Corporation (Kepco).

According to the Seoul Metropolitan Government on Tuesday, the city approved the group’s fourth environmental conservation plan, including a plan to postpone excavation work on the foundation by nine months from October 2021 to July 2022 earlier on Aug. 4.

Hyundai said the the delay was caused by its need to remove some temporary soundproof panels on Yeongdong-daero, and construct a three-story temporary office to be used as a public information office.

The original size of the GBC — 105 floors above ground and seven basement floors — has no official plans to be modified as of now.

Since early this year, however, Hyundai Motor Group has been reportedly considering dividing the 105-story building into two buildings with 70 floors or three buildings with 50 floors, raising the possibility that design changes will be confirmed during the period of delay. Foundation work can only be carried out when construction plans such as the height, building area, and number of buildings are set.

Industry insiders say lowering the number of floors would be advantageous to the company in many ways.

“In order for Hyundai Motor Group to attract financial investors (FI), having a significance as a landmark is important, but it may be more practical to build more offices in the same area,” a source in the domestic automobile industry said.

“For Hyundai Motor which is pioneering projects on future mobility such as Urban Air Mobility (UAM) and self-driving vehicles, it may be beneficial to reduce construction costs worth 3.7 trillion won even if it has no liquidity problems,” the source said.

Gangnam District has expressed its position that design changes would be acceptable.

Gangnam District’s mayor Jung Soon-kyun told the JoongAng Ilbo on Tuesday, “Considering the contents of the project, such as building a drone taxi landing site on the rooftop, a 50-story or 70-story floor structure may be better than a skyscraper.”

“I hope the group follows the original plan, but the final decision should be up to Hyundai,” Jung said. “It is not desirable to excessively demand sticking to the original plan of what a private sector company has decided.”

One problem is whether changes will affect Hyundai’s “public contribution” — what the company pays the local community for taking a public property. The group is supposed to pay public contribution of 1.74 trillion won.

"A large portion of the public contribution will be used for the development of the Yeongdong-daero underground complex, Seoul international Complex, and the remodeling of Jamsil Sports Complex,” Jung said.

Jung, however, expressed concerns, saying, “As a project planned on the premise of public contributions, if changes occur, they will have a serial impact on other projects."

According to a source in the Hyundai Motors Group, the company is "open to new possibilities" regarding the possibility of lowering the number of floors of the GBC.

The source said the completion date of 2026 remains unchanged, including the GBC and the Yeongdong-daero underground complex.

BY SEO JI-EUN, HEO JEONG-WON, KANG KI-HEON [seo.jieun1@joongang.co.kr]