Daewoo E&C announced on the 14th that it has offered a groundbreaking relocation allowance of 500 million KRW per household to win the reconstruction project of Ansan Jugong Complex 6. In addition, Daewoo E&C proposed project conditions including ▲full financing of project costs ▲owner relocation allowance LTV 150% ▲payment in kind ▲deferment of contribution payments for up to 2 years after move-in ▲100% acceptance of construction cost verification results by Korea Real Estate Board.
Daewoo E&C will take full responsibility for financing all costs necessary to carry out the project, including project expenses, relocation allowances, and construction costs. It plans to minimize the burden on owners by raising funds at the lowest interest rates through the highest credit rating AAA from the Housing & Urban Guarantee Corporation (HUG). The AAA rating from HUG is given to companies with the highest level of creditworthiness in domestic and international markets, demonstrating excellent financial soundness and management outlook, ensuring no issues in debt repayment even during severe economic downturns.
The biggest concern for owners in redevelopment projects is the relocation allowance. Daewoo E&C proposed a minimum relocation allowance of 500 million KRW per household by securing 90% of the relocation allowance on its own in addition to the statutory relocation allowance LTV of 60%. For example, the statutory relocation allowance for an apartment with an appraisal value of 300 million KRW at LTV 60% is 180 million KRW.
A Daewoo E&C official said, "Such relocation allowances are often insufficient when considering the surrounding jeonse (long-term lease) market prices, causing some owners to be unable to move, which can delay project progress. Daewoo E&C will solve owners’ moving cost issues by providing a minimum of 500 million KRW in relocation allowances."
Furthermore, Daewoo E&C pledged to fully accept the construction cost verification results from the Korea Real Estate Board, expressing its commitment to completing the reconstruction project with honest construction costs. Recently, conflicts between associations and contractors have increased due to rapid construction cost hikes. Daewoo E&C proposed that if the owners of Ansan Jugong Complex 6 request construction cost verification, Daewoo will bear all costs and accept the results 100%.
Measures to address unsold units caused by the real estate market downturn were also presented. Even if unsold units occur due to worsening sales conditions, Daewoo E&C guarantees project stability through payment in kind. Additionally, Daewoo E&C has prepared plans to maximize owners’ convenience and benefits through conditions such as deferment of contribution payments for up to 2 years after move-in, maximizing additional income through sales of general sale options and reserved lots, and the Golden Time Sales System.
A Daewoo E&C official said, "We will develop Ansan Jugong Complex 6 into a prestigious complex in Ansan through honest construction costs and sincere construction."
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