Agreement on Construction Cost Increase... Daejo 1 District to Start Construction Possibly This Month

Construction Cost Increased to 580.6 Billion KRW
General Sale Process Expected to Accelerate Again

[Asia Economy Reporter Kim Hyemin] The Daejo 1 District in Eunpyeong-gu, Seoul, which resolved conflicts over construction cost increases, is expected to begin construction as early as mid-this month. The delayed general sale procedures are also expected to accelerate accordingly.

According to the maintenance industry on the 5th, the Daejo 1 District association in Eunpyeong-gu held an extraordinary general meeting on the 1st and approved the main contract agenda for construction costs. An association official explained, "The main points approved that day included the extension of the construction period and agreement on major finishing materials, while matters such as reductions found in the construction cost verification that do not burden the members were entrusted to the delegates' council."

Located around 88-89 Daejo-dong, Eunpyeong-gu, the Daejo 1 District received management disposition approval in May 2019 and completed relocation and demolition but had not progressed since then. This was due to the delay in signing the main contract with the selected construction company, Hyundai Engineering & Construction. Initially, Hyundai Engineering & Construction proposed a construction cost of 5.28 million KRW per 3.3㎡, reflecting the increase in raw material prices. The association opposed this and conducted several negotiations, eventually agreeing to increase the cost from 4.62 million KRW to 5.17 million KRW per 3.3㎡. An association official said, "Although further negotiations are needed, there was a judgment that the decision should not be delayed further due to the sharp rise in raw material prices and inflation."

Accordingly, the construction cost will increase from 519.1 billion KRW to 580.6 billion KRW. The construction period has also been extended from 36 months to 39 months. With the resolution of the construction cost increase issue, the construction schedule is expected to be set soon. The association expects construction to begin between July and September.

Once full-scale construction begins, the general sale schedule may also become visible. Considering the remaining procedures, sales are likely to proceed within the first half of next year. This project, which involves building 28 buildings with 2,451 households from basement level 4 to ground level 25, includes 483 units for general sale. The sale price has been set at around 500 million to 700 million KRW for exclusive areas of 51 to 74㎡.