Construction Rights for Hannam Heights Reconstruction Go to GS Engineering & Construction...What Will the New Look Be? (Comprehensive)

Perspective view of 'Hannam Xi The River' proposed by GS Engineering & Construction.

[Asia Economy Reporter Yuri Kim] GS Engineering & Construction (GS E&C) has secured the construction rights for the Hannam Heights reconstruction project in Oksu-dong, Seongdong-gu, one of the largest redevelopment sites in northern Seoul. The project site has attracted industry attention as it offers views of the Han River and faces Apgujeong-dong, a representative affluent neighborhood in Gangnam, across the river. With this successful bid, GS E&C is expected to gain a favorable position in future redevelopment and reconstruction competitions in key areas of Seoul.

On the 18th, the Hannam Heights Apartment Housing Reconstruction Maintenance Project Association announced at an extraordinary general meeting held at Oksu Church in Seongdong-gu that GS E&C was selected as the joint project implementation contractor. In the first agenda item, "Selection of Joint Project Implementation Contractor," GS E&C, listed as candidate number 1, received 281 votes. Out of 557 total association members, 510 participated in the decision for the first agenda item.

Hyundai Engineering & Construction, running as candidate number 2, also made significant efforts, including applying its premium apartment brand "THE H" for the first time in northern Seoul and promising to dramatically increase the number of units with Han River views, but it received 228 votes and was defeated. There was one abstention.

GS E&C presented a design plan for Hannam Heights reconstruction emphasizing terraces, named "Hannam Xi The River." In a pre-presentation before the general meeting, they highlighted plans to increase the number of units with Han River views to 305 and include 347 terrace-type units by leveraging the riverside location. GS E&C plans to install a "rooftop terrace" on the top floor, terraces with front yards on the first floor, and "pocket terraces" and open balconies on the middle floors. As for community facilities, they intend to upgrade the existing fitness center, swimming pool, and sauna included in the association's plan, and add a sky lounge, pet caf?, audio room, and guesthouse.

GS E&C emphasized that their design is a "realistic alternative plan" with minor changes within 10% of the existing association design. They proposed a construction cost of 328.7 billion KRW, which is 13.2 billion KRW lower than the association's estimated 341.9 billion KRW. To reduce the association's financial burden, they set the construction cost calculation base date, which reflects inflation, three months later than their competitor. They also offered 55 billion KRW as project promotion funds. Jaeho Cho, Executive Director in charge of Urban Maintenance at GS E&C, said, "A margin of this size in votes is significant in major Seoul projects. We believe the consistent proposals of feasible plans from the initial offer to now earned the trust of the association members." At the end of the meeting, Cho and other GS E&C officials came onto the stage and bowed deeply to the association members, pledging, "We will keep our promises and successfully complete the project."

The Hannam Heights reconstruction is considered one of the largest redevelopment projects in northern Seoul, along with the Hannam 3 District redevelopment in Hannam-dong, Yongsan-gu. The project involves demolishing 535 apartments built in 1982 at 220-1 Oksu-dong, Seongdong-gu, and constructing 10 new buildings with 790 units. Although administratively located in Oksu-dong, it is very close to Hannam The Hill in Hannam-dong, Yongsan-gu, known as one of the most luxurious apartment complexes in Korea.

Park Hoseong, chairman of the Hannam Heights reconstruction association, said, "In previous redevelopment projects (such as Hannam 3 District), the Seoul Metropolitan Government's focused criticisms were about excessive design proposals that confused association members' judgment and monetary benefits to members that are strictly prohibited by law. We made efforts to ensure the contractor selection process complied with these points." He added, "We will work with the selected contractor to derive the optimal plan and proceed with future procedures such as management disposition approval."

Meanwhile, during the meeting, association members focused their questions on the scope of relocation loan coverage. This is because, following the government's December 16 measures last year, regulations on loan-to-value (LTV) ratios for homes priced over 900 million KRW have been tightened. Hannam Heights consists of high-priced and ultra-high-priced homes, with actual transaction prices as of October last year of 1.35 billion KRW for 89㎡ units and 2.55 billion KRW for 181㎡ units. Association member A said, "It is frustrating that it is still unclear how much relocation loan each member can get and what the loan interest rates are. The standards differ by household size, so we hope these details will be clarified."

In response, Chairman Park said, "It is clearly stipulated that the contractor cannot offer additional relocation loans in reconstruction projects. The selected contractor, as a joint project implementer, will not only carry out construction but also provide funds to facilitate smooth project progress for the association. We will ensure that relocation loan matters proceed smoothly through future bank bidding and discussions with the contractor." He continued, "Establishing relocation measures is very important in reconstruction promotion. However, both the process and the outcome of reconstruction are important. If any illegal issues arise during the process, the project will revert to its original state," emphasizing the importance of procedural compliance.