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Wednesday, December 4, 2024

Seoul Siheung Distribution Complex, promoting mixed development with cooperative + multi-dimensional areas.

On the 24th, a business briefing session will be held for the establishment of a consortium, with Chairman Kang Sung-tae stating that the project will proceed as planned. Seoul’s largest industrial supplies specialized market, the Shiheung Distribution Market, is embarking on the development of an advanced logistics complex through a redevelopment consortium. This is the first time a logistics complex will be developed through a consortium. According to sources in the development industry on the 23rd, the Shiheung Distribution Market Urban Advanced Logistics Complex Development Promotion Committee will hold a business briefing session for the market owners on the 24th and accept consent forms for the establishment of the consortium. The committee plans to finalize the establishment of the consortium by the end of the year and begin relocation as early as the first half of 2026. The Shiheung Distribution Market, located in Shiheung-dong, Geumcheon-gu, Seoul, opened its doors in 1987 as the largest industrial supplies specialized market in the country. There are over 1,400 market owners and over 2,700 stores in the market, with a total land area of ​​127,750 square meters. In 2016, the Shiheung Distribution Market was selected by the Ministry of Land, Infrastructure and Transport as a pilot project for the development of an urban advanced logistics complex. It was regarded as a core development project in the southwestern part of Seoul, as it is adjacent to the West Coast Expressway, KTX Gwangmyeong Station, and the planned Seoksu Transfer Station on the Sinansan Line. However, due to the fact that the Shiheung Distribution Market is the only one of the six pilot sites for the urban advanced logistics complex that is not a single corporation but has over 1,400 market owners holding land, the project has been delayed for several years. At that time, under the Act on the Development and Operation of Logistics Facilities, only corporations under the Commercial Act could pursue development. In December 2019, market owners established a consortium promotion committee and demanded development through a consortium model where 100% of the development profits are allocated to the consortium. They also took the initiative to propose a bill amending the law to add a “consortium” as the operator of the project. With the law amendment, market owners have been able to pursue the development project of the urban advanced logistics complex through a consortium since February this year. Once the Shiheung Distribution Market consortium is established, it will be the first consortium-based logistics development project based on the Logistics Act. Above all, market owners will be able to receive all support facilities, such as apartments, officetels, and neighborhood facilities, without any restrictions. In order to receive approval for the establishment of a consortium, more than two-thirds of the landowners in the planned area and more than half of the total landowners in the area must agree. Chairman Kang Sung-tae said, “70% of the market owners at the Shiheung Distribution Market are not directly operating the market but are lease operators, so there was a strong demand for the provision of apartments, officetels, etc.” He added, “With the legalization of vertical redevelopment, the establishment of the consortium and other development schedules will proceed smoothly.”

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