[Edaily Marketin Song Seung-Hyeon Reporter] A subsidiary of a domestic private equity fund (PEF) is participating as a financial investor to secure the outsourcing rights for public sports facilities in the Sinbanpo 4 District of Seocho-gu, Seoul. As the market for outsourcing public sports facilities is expected to grow amid a series of land donations resulting from ongoing redevelopment projects in Seoul, the industry is paying close attention to this new initiative.

According to the investment banking (IB) industry on the 18th, Seocho District announced on the 22nd of last month that Steady Co., Ltd. was the preferred bidder for the outsourced operation of public sports facilities in the Shinbanpo 4 District. Steady, a company specializing in the outsourced management of apartment complexes and sports facilities, participated in this bidding process alongside Asia Economy as a financial investor (FI). Previously, at the eligibility review committee meeting held on the 20th of last month, seven companies submitted bids, with Steady ranked first, Nextfield Co., Ltd. second, and Lagom Wellness Co., Ltd. third. The deadline for technical negotiations with Seocho District and the signing of the implementation agreement is the 24th of this month.

The facility in question is a building with two basement levels and five above-ground floors, totaling 14,021 square meters in gross floor area, which was completed last December within the Maple Xi complex at 60-3 Jamwon-dong. The facility will feature four indoor tennis courts on the third and fourth floors, a 13-bay indoor golf range and eight screen golf rooms on the second floor, a fitness center and café on the first floor, and a children’s sports facility on the fifth floor, while the two basement levels will serve as parking garages. The operator will bear the cost of interior construction and equipment—totaling 6 billion won—in exchange for a five-year operating rights contract; following a qualification review, the operator may renew the contract once to operate the facility for up to 10 years. Construction is scheduled for September through November, with the official opening set for December.

Asia Economy is a subsidiary of the private equity fund (PEF) Keystone Private Equity. It is believed that Asia Economy took an interest in this project due to the nature of its cash flow. With a structure that generates monthly revenue from memberships, usage fees, lesson fees, and parking revenue, sales are recurring; furthermore, since the building is already complete, there are no development risks such as delays in permits or construction. As the company secures only the operating rights without acquiring the property, the initial capital investment is limited to the cost of construction.

There is also strong underlying demand. Maple Jai comprises approximately 3,300 households, and the Jamwon and Banpo areas are known for high demand for indoor tennis and premium fitness facilities. As the tennis population has grown rapidly in recent years, the supply of indoor tennis courts in Korea has been deemed insufficient to meet demand; this project effectively secures a four-court indoor facility within the complex.

This bidding process was designed to attract well-capitalized investors. Seocho District required bidders to demonstrate a track record of managing sports facilities within the past five years, hold a general construction or interior construction license, and provide a letter of commitment from a financial institution for investment in the development costs. Since it is difficult for a single company to meet all three requirements, the district allowed up to four companies to form a joint venture to meet the eligibility criteria. This naturally leads to a consortium where the facility operator handles day-to-day operations, a licensed construction company handles construction, and a financial investor (FI) provides funding.

Revenue will be shared with Seocho District. The operator must pay a mandatory reserve contribution to Seocho District within 7% of annual revenue, and any remaining net profit must first be remitted to the district before being distributed according to a predetermined ratio. The specific reserve contribution rate and distribution ratio will be finalized during negotiations for the implementation agreement. In exchange for not covering operational losses, the district grants the operator significant autonomy in setting fees and designing programs. At the end of the operating period, all facilities—including interior design and equipment—will become the property of Seocho District, and there is no obligation to restore the site to its original condition. Since this structure involves leaving behind assets worth 6 billion won, the key issue will be whether the operator can recoup its investment and generate a profit within five years.