'Old Hanil Cement Headquarters → Luxury Officetel' 350 Billion PF Achieved

[Asia Economy Reporter Lim Jeong-su] A project financing (PF) worth 350 billion KRW has been secured to develop the former Hanil Cement headquarters, the Udeok Building, into the most luxurious officetel in Gangnam.

According to the investment banking (IB) industry on the 23rd, 'The Gangnam 832 PFV' will receive a development loan of 350 billion KRW from a lending consortium led by Meritz Securities on the 25th. The loan will be executed in tranches according to collateral and repayment priority: senior tranche of 29 billion KRW, mezzanine tranche of 20 billion KRW, and junior tranche of 40 billion KRW. The loan maturity is known to be 5 years.

The Gangnam 832 PFV is a project company established to develop the Udeok Building located at 832-2 and 832-15, Yeoksam-dong, Gangnam-gu, Seoul, into officetels and then sell them. Hyundai Construction is in charge of construction and will begin groundbreaking in November this year.

Hyundai Construction has committed to obtaining the building use permit by September 2025 and has provided a deadline responsibility completion agreement to the PF lending consortium. If the construction company fails to complete the project as planned, it will bear the debt repayment burden on behalf of the project company.

The Gangnam 832 PFV purchased the Udeok Building, which was held through a fund by Aegis Asset Management, last year for 181 billion KRW. Aegis Asset Management is known to have acquired the building in 2015 for about 130 billion KRW and made a profit of approximately 40 billion KRW over five years upon exit.

The Gangnam 832 PFV plans to repay the PF loans in the order of senior, mezzanine, and junior tranches as the officetel sales proceeds come in. After repaying all borrowings, the remaining sales profits will be distributed as project profits to preferred stock investors first, followed by common stock investors.