Back in the year 2000, Songdo was nothing but a stretch of tidal flats off the coast of Incheon, 35km west of Seoul. However spurred by the opening of Incheon International Airport 18km away and strong domestic and regional economic growth, the government commenced an ambitious plan to reclaim 600 hectares of land and develop an international business hub that would rival Singapore and Hong Kong.
Sixteen years and around USD35 billion of investment later, Songdo is 56% complete and while it’s unlikely to reach the illustrious heights of global city status anytime soon, it has established itself as one of the foremost examples of new city development globally.
The success of the city has been led by residential development, with many buyers relocating within Incheon to ‘clean, green’ Songdo whose image provides a welcome contrast to the port and manufacturing based environment that dominates much of the city. Today, the population of Songdo has increased to 106,000 and prices for some apartments rival those in Seoul.
Other success stories for Songdo include an iconic Central Park, a cluster of international schools and universities, international hotels, a Jack Nicklaus designed golf course that hosted the 2015 President’s Cup and an increasingly vibrant retail scene – all of which attract visitors from across the Seoul metropolitan area.
However where Songdo has struggled to establish itself has been in the commercial sector with much of its office space (including Korea’s tallest completed building) remaining largely vacant since completion. Several notable occupiers including the World Bank Korea and POSCO E&C have taken up residence in the city, however for most tenants the drawcards of a new city development and nearby Incheon International Airport have not been sufficient to offset the 60+minute commute time to/from Seoul.
While the city may not be the ‘bedroom community’ that some Seoul satellite cities have been labelled, its future commercial success is likely to be strongly tied to improvements in infrastructure connections to Seoul. The ideal scenario would be completion of a proposed high-speed underground railway from Seoul to Songdo which could reduce travel time to less than 30 minutes. However with no firm timeline in place for the project at present, the ability of the city to attract the major domestic and international occupiers needed to anchor commercial districts and support the truly balanced development of the city is uncertain.
Despite this weakness in the commercial sector, residential supply is likely to continue unabated as the city strives to reach its goal of more than 250,000 residents. Local conglomerates, Lotte and Shinsegae are also backing the city’s growth story with major retail developments scheduled to complete in 2019 and 2020 respectively. However it’s likely to be well beyond this time when construction of the city finally completes and perhaps even longer before the success or otherwise of one of the boldest real estate projects in history can truly be determined.
More on 'Office' in 'Korea'
- Sponsored REITs poised to boost South Korea’s public REITOctober 24, 2024
- Will Magok become Seoul’s next office hub?August 1, 2024
- Life sciences clusters in Korea – unlocking growth potentialNovember 7, 2023
- The “new normal” in Seoul’s office leasing marketNovember 18, 2022
- Seongsu, the trendsetting district in SeoulFebruary 8, 2022
