[Funding] HMG Secures 300 Billion KRW for Acquisition of Former Yeouido Full Gospel Church Site

[Asia Economy Reporter Lim Jeong-su] Real estate developer HMG has raised 300 billion KRW in funds to purchase the former Yeouido Sunbogeum Church site. Most of the 303 billion KRW allocated for the land purchase was secured through external borrowing. HMG is reportedly planning to build and sell a residential-commercial complex apartment on the acquired site.

According to the investment banking (IB) industry on the 12th, HMG Group raised a total of 300 billion KRW from a consortium of financial companies through its development purpose company, HMG Global. To secure the funds, they provided the Yeouido Sunbogeum Church site at 61-1 Yeouido-dong, Yeongdeungpo-gu, Seoul, covering 8,264㎡ (approximately 2,504 pyeong), as collateral.

Of the total loan, 270 billion KRW was raised from investors divided by collateral and repayment priority into senior tranche of 200 billion KRW, mezzanine tranche of 30 billion KRW, and junior tranche of 40 billion KRW. The remaining 30 billion KRW was borrowed from the affiliate HMG County. HMG County borrowed 30 billion KRW with joint guarantee from the construction company Hyundai Engineering & Construction, then lent the funds to HMG Global.

HMG signed a contract in July to purchase this site from Yeouido Sunbogeum Church. The site, located between Yeouido St. Mary's Hospital and Kumho Richensia residential-commercial complex building, is currently used as a parking lot. HMG plans to build and sell a residential-commercial complex apartment on the acquired land. Hyundai Engineering & Construction was selected as the contractor, and after going through the necessary permits and approvals, construction is scheduled to begin in May 2023.

Yeouido Sunbogeum Church reportedly sold the site to HMG due to financial difficulties caused by the novel coronavirus (COVID-19). After purchasing it from the Korea Asset Management Corporation (KAMCO) in 2012 for 60 billion KRW, the church made a profit of about 240 billion KRW in approximately nine years.

HMG started as the sales agency Frontier Maru and officially entered the real estate development market in 2015. Having conducted numerous development projects in Seoul and the metropolitan area, HMG expanded into real estate finance by acquiring Kansas Asset Management in 2019.