SEOUL, Mar. 10 (Korea Bizwire) — Hyundai Motor Group is moving toward joint development of its new headquarters as a way to save money that can be used in future-oriented research and development (R&D) efforts, industry sources said Sunday.
Observers said the world’s fifth-largest automotive conglomerate by sales is exploring the creation of a special purpose company (SPC) that will share the cost of building the Global Business Center (GBC) in southern Seoul.
The building received government approval in January, and after getting permission from the Seoul city government, work should begin in earnest within the year for completion in 2023.
Hyundai has yet to announce that it is moving away from its original plan to build the building in cooperation with several affiliates.
The SPC will likely be comprised of foreign pension and sovereign wealth funds, real estate developers and domestic companies that have shown interest in the project.
“Hyundai has been in informal talks with various parties that have all expressed interest in the development of the GBC, with the conglomerate attracted by the prospect of better allocation of its resources,” a source, who declined to be identified, said.
Creating a partnership is expected to alleviate the 3.7 trillion won (US$3.25 billion) cost of building the landmark structure and make it possible for Hyundai to allocate resources into critical future technology R&D that can sustain continued growth for one of South Korea’s largest business conglomerates.
The group announced in Feb. 27 that it will inject some 45.3 trillion won in the next five years to build up its know-how in key sectors.
Related to the project, local real estate firms have compared it to the huge Hudson Yards development work underway in Manhattan, New York.
They said that while Hyundai bought the land for the GBC for a whopping 10.55 trillion won in 2014, the price of the property situated right next to the sprawling COEX mall has been rising an average of 19.7 percent every year for the past five years, resulting, on paper at least, in a solid return on the initial investment.