A major challenge in seasonal thermal energy storage (STES) design is the presence of groundwater, which can reduce thermal performance and impose regulatory limits on groundwater temperature. Although mitigation measures such as cut-off walls and additional insulation have proven effective in simulation studies, groundwater conditions remain a technical, economic, and legal constraint that strongly influence design choices and project feasibility. This study analyses the trade-off between constructing an STES close to the DH network in areas with unfavourable ground conditions and building it in more remote locations with favourable geological conditions. Different scenarios are assessed to determine the maximum economically viable distance between the DH system and the storage location. The results show that investment cost is a key factor in STES integration. If a remote location allows a simpler and less expensive storage design, locations up to approximately 10-17 km from the DH network can remain economically competitive, depending mainly on DH transport pipeline costs. The study also highlights that the number of charge-discharge cycles strongly influence the contribution of the storage investment to the levelized cost of heat. While remote storages benefit from lower construction costs, higher cycling rates may require larger auxiliary components, favouring more centralised storage solutions. Operating the storage with additional cycles during periods of low heat demand can further improve economic performance.