750 Billion Bridge Loan Maturity Extended by 3 Years
Construction Start Scheduled for June 2026, Completion Expected in July 2030
Lotte Construction Faces Consecutive Project Delays Due to Unstarted Sites
The Bucheon Sangdong Homeplus development project, with a budget of 3 trillion won, has postponed sales and construction despite obtaining project permits due to concerns over project financing (PF) instability. The maturity of the bridge loan (initial project financing for land acquisition, etc.) of about 750 billion won was extended by three years, and the planned construction start date was pushed back to 2026.
According to the investment banking (IB) industry on the 3rd, ‘Miraedosi,’ the developer of the Bucheon Sangdong Homeplus project, recently signed a bridge loan contract worth 750 billion won with the main lenders. Financial companies such as Kiwoom Securities participated as lead managers and lenders. The Bucheon Sangdong Homeplus site and building were set as collateral for this loan. Based on collateral rights and repayment priority, investors were recruited by dividing the loan into senior debt of 715 billion won and subordinated debt of 35 billion won.
The Bucheon Sangdong Homeplus development project involves constructing a residential-commercial complex on the former Homeplus Sangdong branch site at 540-1 Sangdong, Bucheon-si, covering 37,599㎡ (11,394 pyeong) with a project cost of 3 trillion won. The complex will consist of 936 apartment units in a building with 7 basement floors and 47 above-ground floors, and 917 officetel units. The building coverage ratio and floor area ratio are applied at 57.96% and 792.99%, respectively. The project duration is 54 months (4 years and 6 months) after construction starts. Bucheon City approved the housing construction plan based on these details in February this year.
This bridge loan serves as an extension of the existing bridge loan instead of the main PF loan, which is usually received at the time of sales and construction schedule. Although the project has recently obtained permits, the pace of the project has been somewhat slowed due to rising construction costs and concerns over PF instability.
While raising this bridge loan, Miraedosi promised the lenders to start construction within three years. The initial construction target date was set for June 2026, about two years later, and the completion date was proposed as July 2030. The construction company is Lotte Construction, which is currently unable to provide new PF guarantees or construction responsibility agreements.
The actual project owners are Hana Alternative Asset Management and Lotte Construction. The consortium composed of Hana Alternative Asset Management and Lotte Construction acquired four large stores, including the Homeplus Bucheon Sangdong branch previously owned by SRA Asset Management, as well as Suwon Yeongtong, Incheon Jakjeon, and Daegu Chilgok branches in 2020. The purchase price was about 830 billion won.
The Sangdong branch, which maintained the highest Homeplus sales nationwide, was reportedly purchased for 430 billion won. Currently, Homeplus leases and uses the site while paying rent. With this project delay, the lease contract with Homeplus is expected to be maintained until construction begins.
In addition, Lotte Construction is participating in development projects for Homeplus stores in Seoul Yeongdeungpo, Seoul Geumcheon, Suwon Dongsuwon, and Busan Centum City. An IB industry official said, "Lotte Construction resolved liquidity issues earlier this year by receiving 2.3 trillion won in support from the Korea Development Bank and commercial banks," adding, "They are in a situation where they have to proceed with projects selectively."
Regarding this, a Lotte Construction official stated, "We are promoting the project according to the normal schedule, including negotiations on business compensation and eviction with Homeplus store owners."
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