Wednesday, February 24, 2010

International Finance Center, Seoul

When completed, the International Finance Centre (IFC) Seoul is slated to be the city's leading business destination. The 5.4 million square feet development features three A-grade office towers, a five-star hotel and a three-level luxury mall which will add a new landmark to the city's skyline. The IFC Seoul project is one of the first large-scale real estate developments in Korea to be led by an international consortium. The project, which was officially launched in 2005, is a key component in the Seoul Metropolitan Government’s plan to rejuvenate the Yeouido area and to position the area as a regional financial center, creating employment opportunities and raising the quality of life for local residents.
The master plan for IFC Seoul includes three premium commercial office towers, a five-star hotel, three-level luxury retail mall, multiplex cinema complex, fine dining, and significant new public outdoor spaces and the Seoul subway transportation system.
The project design includes four above-ground towers of crystalline appearance, three of them in the southern, western and northern corners of the site, and one positioned close to the center’s northeastern perimeter that will dominate the Yeouido skyline.
To the south will be the 29-story Two IFC office tower, which will offer some 79,000 square meters of floor space; to the west will be the 32-story One IFC with 88,000 square meters, while the northern corner will be reserved for a 450- guestroom, 38-story five-star hotel. The structure on the northeastern side of the project, Three IFC, will be 55 stories in height and, with a total office space of 160,000 square meters, will be the largest structure in the complex.
The development is the result of a unique collaboration between the Seoul Metropolitan Government and AIG Global Real Estate, which acts as the developer, finance arranger and project manager. The landmark project is expected to be completed in phases through 2012. The first phase of the IFC Seoul project, which will include the retail mall, a five-star luxury hotel, and the One International Finance Centre Seoul commercial office tower, is expected to open in mid 2011.
To learn more about the project, I caught up with Mr. Jim Kohlhoff, Vice President / Property Management and Mr. James Tyrrell, Director of Office Leasing, AIG Investments, AIG Korean Real Estate Development YH.
AIG Korean Real Estate Development YH, a member company of American International Group, Inc., is a part of AIG Global Real Estate, a group of international real estate companies that actively invests in and manages real estate for clients and AIG member companies in over more than 50 countries around the world. AIG Global Real Estate owns, manages, or has under development approximately $24 billion in equity in more than 53 million square feet of all property types in major global markets.
Mr. Kohlhoff noted that taking advantage of Seoul's growing importance as a regional financial and business center IFC Seoul offers corporations a compelling mix of world-class commercial real-estate and a cosmopolitan lifestyle.
He pointed out that the project is located in the heart of Yeouido, with immediate access to major transportation systems and just next to the Han River. It is the first large scale project to come up in Yeouido since the nineties. After the initial development of the financial business district, no sites have been cleared, even as development took place in Gangnam and CBD area.
“This development is the dawn of a new era. Especially, since it will be an integrated project with quality office space, prestige hotel and shopping mall. It will be an international blend of property uses, which has never been done here before.”
The Shopping Mall is expected to attract the world’s leading luxury brands to its easily accessible and visually striking location. In addition to serving the area’s 150,000 office workers and the 6.4 million people living within a ten-kilometer radius of the project, the mall will also be an outstanding amenity for the residents of the five-star hotel and for the 25,000 future workers within the three planned office towers in IFC Seoul.
Such a concept is not found anywhere in Seoul. While the COEX mall in Gangnam does try to provide such facilities, it is still fragmented and does not gel together in one package. It was also build in the eighties, and the technology has vastly improved since then. The IFC Seoul project will take it to the next level
“Our project will take Korea into the next decade, and add vibrancy to Yeouido as a location. People who relocate here will experience a different lifestyle that is very unique and international in standard.”
Mr. Kohlhoff said that the Gangnam business district has built itself out and there are no empty sites left. At the same time it is very congested, unlike Yeouido. The IFC Seoul project will provide excellent facilities in a modern environment which will appeal to both office goers and office tenants.
Connectivity to other business districts is also excellent. Seouls’ amazing subway system connects Yeouido to Gwanghwamun in less than 15 minutes, with the new line No. 9 providing express shuttle to Gangnam area in about 12 minutes.
The key challenge, he noted is to get the tenants and to show them that IFC Seoul offers a different customer experience that is different from Gangnam and CBD. It will appeal to people looking for a more interactive lifestyle.
Speaking on competition from the other different projects that are under development, Mr. Tyrrell said that each offers something different. Songdo City for example is not located within the Seoul area, and needs to have more residential density before it really catches on as a pure office location. This could take anywhere between another 5 to 10 years. IFC Seoul on the other hand is already situated in the business district and the advantages that it offers are unmatched.
Now tenants have a lot of choice, which they did not have in the past. Currently Seoul’s commercial office market lacks large areas of contiguous floor space. Even large Korean conglomerates find that their headquarter office space is spread around the city and, for expanding international companies in Seoul, the difficulty of obtaining space to grow is significant. The IFC Seoul project is designed to accommodate the requirements of major industry tenants.
While Yeouido at present is regarded as a financial district, many more non-financial companies have shown keen interest to relocate to IFC Seoul. It is a very busy phase now, as pre-leasing agreements are being pursued. Traditionally building were not in a leasing phase 1 year before completion, it was always post completion, but the IFC Seoul project is being run in an international way and pre-leasing has started , as is common in global markets.
“We have a very robust infrastructure and it is very important that we offer our customers support. So while the buildings are state of the art, we are not just looking at customer support, but rather a customer experience program. Customer service is typically a reactive service, whereas customer experience is proactive,” Mr. Kohlhoff said.
IFC Seoul will also be one of the first few commercial mixed-use developments in Korea certified as a ‘Green Building’.
“The IFC Seoul development takes care to emphasize the natural beauty of the nearby Yeouido Park, one of Seoul’s most celebrated green spaces, with urban plazas, art-filled esplanades and a vast lawn. In addition, IFC Seoul is pursuing LEED certification as well as adherence to the Korean Green Building Council's recommendations,” he said.
The green features include: Photovoltaics to be used to make electricity; co-generation to be installed in the hotel to harvest heat from the generators to produce power; harvesting rainwater to supplement the flushing of toilets and irrigate the plaza; and comprehensive waste management practices to be employed.