[Exclusive] From Tomorrow, Restrictions on 'Splitting Commercial Shares' at 4 Redevelopment Sites Including Gaepo Woosung 1st and 2nd Complexes

Passed Gangnam-gu Office Urban Planning Committee Review
Targets including Gaepo Hyundai 2nd, Sangroksu, Garam
Blocking Speculative Activities for 3 Years

Starting from the 26th, the practice of 'splitting commercial property shares' will be restricted in four redevelopment sites, including Gaepo Woosung 1st and 2nd Apartments in Gangnam-gu, Seoul. With speculative activities blocked for the next three years, the pace of redevelopment projects is expected to accelerate.

According to Gangnam District Office on the 25th, the district held an urban planning committee meeting earlier this month and decided to restrict permits for activities in four redevelopment zones (apartments). This measure aims to prevent speculative acts such as increasing the number of pre-sale rights. The affected sites include Gaepo Woosung 1st and 2nd Apartments in Daechi-dong (a total of 1,140 households), Gaepo Hyundai 2nd Apartment in Gaepo-dong (558 households), and Sangnoksu (730 households) and Garam Apartments (496 households) in Irwon-dong. All of these are complexes that have not yet been designated as maintenance zones.

Gaepo Woosung Apartment, Daechi-dong, Gangnam-gu, Seoul.

Share splitting refers to the act of dividing shares of land, housing, or commercial properties to increase the number of pre-sale rights, which lowers the feasibility of redevelopment projects and can cause delays or even cancellations. While complexes designated as maintenance zones can restrict share splitting under the Urban and Residential Environment Improvement Act, such restrictions cannot be applied before designation. As a result, in redevelopment areas within the Gangnam 3 districts (Gangnam, Seocho, Songpa) and Gangdong-gu, where speculative demand exists, there have been issues with splitting and selling commercial property shares.

Accordingly, the law was amended this year to allow local governments such as metropolitan/provincial governors, mayors, county heads, and district heads to restrict share splitting even before the designation of maintenance zones through activity restrictions. In zones where activity restrictions are announced, permission from the local government is required to split commercial property shares. The restriction period is three years from the date of announcement, with a possible one-time extension of one year. If the area is designated as a maintenance zone during the restriction period, the restriction is lifted the following day.

The restriction on share splitting for these four complexes will be enforced for three years starting from the announcement date, the 26th. The district had previously pre-announced the restriction on share splitting for these complexes for two weeks starting from the 22nd of last month.

Gangnam-gu also imposed share splitting restrictions last March on Mido and Seonkyung Apartments in Daechi-dong, Miseong Apartment in Apgujeong-dong, Donghyeon Apartment in Nonhyeon-dong, and Gaepo Hyundai 1st, Gaepo Gyeongnam, and Gaepo Woosung 3rd Apartments in Gaepo-dong. All these complexes were in the process of establishing redevelopment maintenance plans at that time.

With the restriction on share splitting, the redevelopment progress of these complexes is also expected to speed up. There is a high possibility of moves to designate them as maintenance zones within three years (up to four years) while speculative forces are blocked.