Korean Military Mutual Aid Association to Sell '27-hole Rokin Gimhae Golf Course' via Negotiated Contract [fn Market Watch]

[Financial News] The sale of the 27-hole golf course in Jinye, Gimhae, in which the Korean Military Mutual Aid Association participated as the largest investor, has shifted to a negotiated contract after two failed auctions. The reserve price was also reduced from ₩9.3 billion to ₩8.3 billion per hole. Once the sale is completed, the Korean Military Mutual Aid Association will recover funds that have been tied up for nearly 20 years and secure liquidity.
According to investment banking (IB) industry sources on the 4th, the bundled sale of the real estate and business rights for the 27-hole Gimhae Urban Planning Facility Golf Course, conducted through KAMCO's OnBid, shifted to a negotiated contract after failing to attract a winning bid on September 3 and 17.
The reserve price was reduced by about ₩26.9 billion, from ₩251.495 billion to ₩224.591 billion. On a per-hole basis, the price fell from about ₩9.3 billion to ₩8.3 billion. Applications to participate in the negotiated bidding process are due by the 7th, and bids are scheduled to be opened on November 6.
D&A handled the advisory services, including the calculation of the sale price. The seller, Rokin Gimhae Lespo Town, is a special-purpose company (SPC) funded by the Korean Military Mutual Aid Association with a 46.37% stake, Gimhae City with 37.86%, and KORAIL TECH with 15.77%.
Real estate IB industry sources are closely watching whether the sale will succeed now that the price expectations have been lowered. Recent transaction prices for golf courses outside the Seoul metropolitan area and in regional markets have generally ranged from ₩7 billion to ₩9 billion per hole. However, the asset is still under construction, with civil engineering progress at about 80%. The need for the buyer to assume the remaining construction costs and opening risk is a key pricing factor.
“Because the structure involves acquiring the business rights and remaining construction work together, rather than a completed golf course, a discount reflecting the additional investment costs is unavoidable,” an industry source said. The source added, “If the price is in the low ₩8 billion range per hole, it is a level worth considering given the demand from the Busan and Changwon hinterlands.”
The assets up for sale comprise a 1,442,093-square-meter site and facilities, including a clubhouse, with a total floor area of 4,112 square meters. They are being developed as three courses with 27 holes. Industry sources assess the project as capable of hosting Korea Ladies Professional Golf Association (KLPGA) events.
The Gimhae Complex Sports and Leisure Facilities Development Project began in 2005 as a private investment solicitation project. It combines an urban development project with sports facilities, including a golf course, athletic field, and access road. The urban development project was partially completed in August last year, while overall completion is targeted for December next year.
For the Korean Military Mutual Aid Association, recovering its long-term investment is the key priority. If the sale is completed, it will secure funds to recover development costs and loans that have remained tied up for an extended period. This would increase the liquidity available for members' salary-savings payouts and new alternative investments. If a development plan is finalized for the remaining reserved land earmarked for 18 holes, the value of the remaining assets could also attract further attention.
[email protected] Kang Gu-gwi Reporter