[Exclusive] [fn Market Watch] Cheongnyangni St. Paul’s Hospital Site Acquired by STS Development

The main site of St. Paul’s Hospital in Cheongnyangni, Seoul, has been acquired by STS Development, a small- to medium-sized real estate developer. STS Development plans to redevelop the site into a comprehensive mixed-use complex featuring officetels, retail facilities, and other commercial uses. According to sources in the real estate and investment banking (IB) industries on the 12th, STS Development acquired the main St. Paul’s Hospital site from the Catholic Educational Foundation earlier this year. The acquisition price is reportedly around KRW 130 billion. The sale of the site began last year as St. Paul’s Hospital prepared to close its Cheongnyangni main campus and consolidate its operations at Eunpyeong St. Mary’s Hospital. Located in Eunpyeong New Town in Eunpyeong-gu, Seoul, Eunpyeong St. Mary’s Hospital has seven basement levels and 17 floors above ground, with 808 beds, and was scheduled to open in April. The Cheongnyangni site was initially sold last year to Via da Vinci, a hospital-operated wholesale company. Although the prospective buyer paid approximately KRW 61 billion, including the deposit and interim payment, it failed to make the final payment, resulting in a contractual penalty and the property being put back on the market. After a complicated process, STS Development ultimately acquired the site. Hyundai Engineering & Construction is reportedly the leading candidate for the construction contract. The former St. Paul’s Hospital site is located in a commercial zone and covers approximately 6,211 square meters. An IB industry source said, “It is located in a commercial zone and has a large amount of foot traffic because it is close to Cheongnyangni Station. STS Development is understood to be planning to construct a mixed-use complex, including officetels and retail facilities, that fits the characteristics of the commercial area.” The site had previously attracted interest from Hyundai Engineering & Construction, which conducted a feasibility review last year but ultimately decided not to acquire it. St. Paul’s Hospital had repeatedly been the subject of sale rumors since 2009. The sale is reportedly related to the Catholic Medical Center’s concentration of resources on Eunpyeong St. Mary’s Hospital, which involved an investment of more than KRW 600 billion. An IB industry source said, “Although some parcels are owned by third parties, they are understood to be willing to sell under the same conditions. For small parcels owned by entities such as the Ministry of Land, Infrastructure and Transport, negotiated purchases are expected during the permitting process. Although some urban planning facilities, including parking areas, have been designated on the site, it appears possible to have those designations lifted.” kakim@fnnews.com