Orpent Haeundae goes entirely to auction
The ultra-luxury officetel 'Orpent Haeundae', which generated significant buzz in the Jungdong area of Haeundae, Busan with a sale price of 60 billion won, has come to the auction market without commencing construction.
This project initially attracted attention for its luxury, but due to high sale prices and the stagnation of the real estate market, it failed to generate demand, leading to a halt in the project.
Ultimately, the plans were scrapped.
The fate of 'Orpent Haeundae' brought on by the stagnation of the sales market
On the 10th, a property located at 1394-335 Jungdong, Haeundae, Busan, was registered for auction by the Korea Asset Management Corporation. The property consists of 3,583㎡ of land and a 7,138㎡ building. The appraised value is 168.1 billion won, and the starting bid for the first auction has been set at 218.5 billion won.
Piyot Development, established in 2022, had plans to build the ultra-luxurious penthouse officetel Orpent in Haeundae. The site boasts excellent accessibility due to its proximity to Haeundae beach, located about a 5-minute walk from Haeundae Station of Busan Metro Line 2. This prime location is expected to be an attractive factor for many people.
Failure to secure demand despite luxurious plans
Orpent Haeundae was planned with a scale of 7 basement floors and 29 above-ground floors, offering 82 super-luxury penthouse officetels with exclusive areas ranging from 350 to 778㎡ and 561 parking spaces.
Notably, the design was led by Jean-Michel Wilmotte, a renowned French architect, with plans for various high-end community facilities, including the first international standard tennis court in Korea, a 25m swimming pool, sauna, and fitness center.
These amenities are expected to provide residents with an exceptional quality of life.
During the initial sale stage, excessively high prices compared to the location conditions became the main issue. In the first sale in 2023, the highest-end 'Super Penthouse' was set at 51 to 59 billion won, the 'Duplex Penthouse' at 17 to 50 billion won, and general penthouses were priced between 9.7 and 28.6 billion won, garnering negative responses from investors.
This pricing led many to hesitate in their investment decisions, ultimately resulting in a failure to attract market attention.
Consequently, the developer adjusted the internal design and aimed to expand the number of units from the original 82 to 226 while reducing individual areas to lower the price entry barrier. However, due to the worsening market atmosphere and high construction costs, it ultimately failed to reach the construction stage and went to auction.
High-priced real estate in Haeundae ignored at auction
The current auction received no bidders in its first round and is scheduled to proceed in a total of 8 rounds from the 11th to the 27th. With each round, the starting bid is planned to decrease by about 10% from the previous round.
Therefore, in the final 8th round, the bid is expected to drop to around 104.5 billion won, half of the initial auction price. This change is attracting attention from many investors.
Currently, the prevailing analysis in the industry is that subsequent auctions will be difficult due to economic downturns and high financial costs. One expert stated, "The case of Orpent Haeundae resulted from aggressive pricing and overlooking market conditions," emphasizing that "other premium real estate projects in the Haeundae area must also set more realistic prices and adjust to the market." This situation is expected to have a significant impact on the future real estate market.
Conclusion
Orpent Haeundae was a project that aimed to bring innovation to Busan's luxury housing market; however, due to the stagnation of the sales market and high pricing, it never even began construction. Ultimately, the project ended in auction.
This case is expected to provide important lessons for the ultra-high-priced real estate market nationwide, including Busan.
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