LH to Supply 88,000 Conditional Pre-Subscription Multi-Family Housing Sites

Condition to conduct preliminary subscription within 6 months from the contract date
Submission of intention letter for preliminary subscription participation for company-owned land lots by the end of October

[Asia Economy Reporter Kangwook Cho] Korea Land and Housing Corporation (LH) announced on the 18th that starting next month, it will supply residential complex sites to the private sector on the condition of preliminary subscription.

This measure follows the "Expansion Plan for Preliminary Subscription of Public Land" announced by the Ministry of Land, Infrastructure and Transport on August 25 to enhance the effectiveness of supply measures and promote early stabilization of the housing market. Since the announcement, LH has continuously communicated with the industry under the supervision of the Ministry of Land, Infrastructure and Transport to prepare detailed implementation plans by listening to explanations of the system and suggestions, ultimately finalizing the implementation plan.

According to the plan, LH will supply residential complex sites sold by 2023 on the condition that preliminary subscription is conducted within six months from the contract date. For residential complex sites already supplied and held by companies, preliminary subscription (including main subscription) must be conducted by March 31, 2022, and companies that comply will be given preferential treatment when new residential complex sites are supplied.

The sites subject to conditional supply with preliminary subscription are residential complex sites (excluding townhouse sites) and mixed-use residential-commercial sites supplied by LH until 2023, and this applies to all sites supplied through lottery or competitive bidding methods.

Companies newly acquiring residential complex sites must conduct preliminary subscription within six months from the contract date. Failure to fulfill the preliminary subscription condition will result in contract cancellation and point deductions when applying for newly supplied land. However, if there are more than four years remaining from the supply announcement date to the land usability date, the preliminary subscription may be conducted within 12 months.

In the fourth quarter of this year (November to December), LH plans to supply 12,000 units (10,000 units in the metropolitan area and 2,000 units in other regions) including 950 units at Hwaseong Dongtan 2 Block 5, 1,149 units at Suwon Dangsuh Block 2, 510 units at Seongnam Bokjeong 1 Block 1, and 1,431 units at Namyangju Jinjeop 2 Block 2. Furthermore, LH plans to sequentially supply land corresponding to a total of 88,000 units by 2023. Considering the preliminary subscription ratio (85% of general supply), approximately 75,000 units are estimated to be supplied under the condition of preliminary subscription.

Additionally, if companies conduct preliminary subscription (including main subscription) by March 31, 2022, for land purchased and held from LH or others, preferential treatment will be applied when supplying residential complex sites after April of the same year.

The land subject to preliminary subscription (including main subscription) among company-held sites includes 123 plots of land (totaling 84,000 units) already supplied by LH, and residential complex sites supplied by other agencies in joint project districts with LH are also included when preliminary subscription (including main subscription) is conducted.

Among these, the preliminary subscription target is 28,000 units (land usability date after April 2022), and the main subscription target is 56,000 units (land usability date has arrived but main subscription was not conducted, or land usability date arrived before March 2022).

For residential complex sites supplied by competitive bidding methods (rental housing construction type, profit-sharing type, design competition type) after April next year, LH plans to grant additional points up to about 6% of the total score to companies with a record of preliminary subscription (including main subscription) on company-held land.

In the case of supply by lottery, eligibility evaluation indicators such as preliminary subscription implementation records will be added to the existing first-priority subscription qualifications so that companies with preliminary subscription records can participate in subscriptions preferentially. Furthermore, a priority supply system by lottery will be introduced targeting only companies with excellent preliminary subscription (including main subscription) and purchase agreement records to encourage activation of preliminary subscription on company-held land.

LH plans to receive letters of intent for participation by the 29th to ascertain whether companies will participate in preliminary subscription for company-held land.