Amid pomp, circumstance and fireworks this week, a multinational property company broke ground on a British-designed, $2 billion (£1 billion) development in central Seoul that is leading a wave of innovative buildings in a city notable for its faceless architecture.

Yet while city hall hopes that the project will further its ambition to make South Korea’s capital a financial axis for northeast Asia, critics say that the city has much work to do to fulfil that vision.

“I call 2007 the start of the era of ‘city brand marketing’,” Oh Se Hoon, the Mayor of Seoul, said at the ground-breaking ceremony for Parc 1, a multiuse development in the Yeouido financial district. “Parc 1 will be the detonator for unique design in Seoul.”

Designed by Lord Rogers of Riverside, Parc 1 is set on a 46,465 sq m site facing Yeouido Park in central Seoul. On completion in 2011, it will boast two office towers – one, at 75 floors and 333 metres, will be the city’s highest building – an international hotel and down-town’s largest shopping centre.

Skylan Property Development, Parc 1’s developer, is Asia-focused. Peter Walichnowski, its Australian chief executive, previously led the development of the Mall of the Emirates in Dubai – complete with an indoor ski-slope – and Bluewater, Kent. Paul Rogers, the chairman of Skylan, said that the complex would help Seoul to “emerge as the financial hub of northeast Asia”. After North America and the European Union, the region is the world’s largest economic zone.

The project is overdue. Despite its status as capital of the world’s eleventh-largest economy, Seoul, other than a few notable exceptions to the rule, lacks the kind of design-centric buildings seen in Hong Kong and Singapore, its closest rivals. The metropolis of ten million people is an architectural stew of blocky steel and glass office towers, endless ranks of identical concrete apartments and chaotic, jumbled housing neighbourhoods.

Parc 1 is not alone. On a site next door, the $1.6 billion Seoul International Finance Centre – being developed by AIG and Seoul City – is rising. Comprising a convention centre, shopping centre and office towers, it will be competed by 2011. Together, the two projects are expected to rejuvenate Yeouido. However, these developments are small fry compared with other projects on the drawing board. The Lotte Group is fighting for approval to raise a 112-storey skyscraper in southern Seoul and plans are being circulated for at least three towers of more than 100 storeys. In Incheon, Seoul’s port, a consortium led by Portman Holdings, an American developer based in Georgia, has signed an agreement to raise a 151-storey tower overlooking the Yellow Sea.

Nevertheless, for Seoul to emerge as a financial hub, it must do more than raise distinctive buildings. Kim Ki Wan, chairman of the Seoul Financial Forum, said: “For any place to become a financial centre, it needs to undertake reforms and overcome hurdles. We are just at the beginning.”

The Government is hoping that a pending Capital Markets Unification Act will ignite a “big bang” in the city’s financial industry by 2009. It also points to a booming asset management sector and its regional lead in derivatives trading.

Yet South Korea is also home to an unpredictable and heavy-handed regulatory environment, a nationalistic media and an opaque corporate sector. Periodic outbreaks of antiforeign investor emotion worry business, while militant unions plague the finance industry.

Hank Morris, a finance specialist at Seoul’s Industrial Research and Consulting, said: “There are various obstacles to foreign financials in Korea. There are problems in terms of ease of licensing for certain products, such as hedge funds. It can also be difficult to find adequate numbers of trained financial professionals with high levels of English.”

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