The former Novotel hotel site in Doksan-dong, Geumcheon-gu, Seoul, has found a new owner after more than four years. The site had been targeted for a project to demolish the hotel and build a high-rise mixed-use complex near a subway station, but the plan stalled in the wake of a workout, or corporate restructuring program, at builder Taeyoung Engineering & Construction. With a new owner, the site will now be redirected toward affordable housing for newlywed couples. The sale is also expected to help improve Taeyoung's financial structure.
According to industry sources Tuesday, the former Novotel hotel site at 1030-1 Doksan-dong, Geumcheon-gu, Seoul, found a new owner last month for 87.5 billion won. According to the Geumcheon-gu Office, the buyer plans to pursue the supply of affordable housing for newlywed couples at the location.
The site is where Doksan IRD PFV, a project financing vehicle backed by developer IRDV and Taeyoung Engineering & Construction as investors, had pursued a project to demolish the existing hotel and build a mixed-use complex. Judging that the location held high appeal — situated 800 meters from Doksan Station on subway Line 1 and directly adjacent to the Sindoksan Station set to open next year — the vehicle raised 160 billion won in project financing (PF) in 2022 and purchased the site for 121.7 billion won. The development progressed smoothly after the Seoul Metropolitan Government designated the area around Sindoksan Station as a special planning district under its station-area revitalization project in 2023, confirming a plan to build 284 housing units across two mixed-use towers.
However, the project stalled when Taeyoung Engineering & Construction entered a workout due to a liquidity crisis at the end of 2023, and the creditor group launched a public auction process for the site in September last year to recover its loans. The auction, which began at a bid price of 155.6 billion won, failed to draw a buyer for 17 consecutive rounds, with the bid price falling to 91 billion won in February this year. Still unable to find a buyer, the process was converted to a private contract. The sale was only completed after the price was lowered to 87.5 billion won — about 44% below the appraised value and about 28% below the purchase price.
This is not the first time a site Taeyoung had been developing was sold at a bargain price. Taeyoung Engineering & Construction, which had suffered a liquidity crisis after its PF guarantees ballooned to 3 trillion won at one point due to aggressive business investment, has focused on improving its fundamentals since the workout, including clearing out troubled project sites and selling assets. A site around 59 Banpo-dong, Seocho-gu, where it had pursued an urban-living housing development, began a public auction with an appraised value of 391.3 billion won and was sold for 116 billion won in February after 13 failed rounds. The winning bidder, DS Banseok, is reported to plan to build its headquarters at the site. "We selected 60 major PF project sites for review, and we are continuing 37 that secure profitability while classifying 23 as sites to be wound down," a Taeyoung Engineering & Construction official said. "Among the sites to be wound down, we have also completed processing eight sites, including replacing the builder at six and liquidating the business at two."
Taeyoung Engineering & Construction is also putting effort into restructuring its business alongside asset sales. As it reshapes a portfolio that had been concentrated in private development projects toward areas with relatively higher earnings stability — such as public construction, social overhead capital (SOC), and redevelopment projects — improvements in performance have also become visible. Taeyoung Engineering & Construction recorded revenue of 2.1745 trillion won and operating profit of 52.7 billion won on a consolidated basis last year, successfully returning to the black. This broke a streak of large-scale losses for two consecutive years in 2023 and 2024. Its debt-to-equity ratio also fell sharply, from 769% in the first quarter of last year to 489% in the first quarter of this year.
"We are doing our best to improve profit and loss and secure profitability based on stable order intake," a Taeyoung Engineering & Construction official said. "In accordance with the corporate improvement plan, we are pursuing debt-to-equity conversion of contingent liabilities, asset sales, and fixed-cost reductions, while also carrying out work to normalize our financial structure." Taeyoung Engineering & Construction aims to graduate from the workout in May next year.
