Unsold Housing Graveyard in Daegu Too... 'Hwanggeum-dong Hoban Summit' 400 Billion KRW PF Success

677 Residential Units of Mixed-Use Complex and Officetel Construction
Premium 'Excellent Business Feasibility' in Top Local School District
Strong Credit Rating with Hoban Construction Joint Guarantee

Project financing (PF) worth 400 billion KRW has been successfully secured for a residential-commercial complex development project in Daegu Metropolitan City, known as a graveyard for unsold properties. The project is a residential facility development in Hwanggeum-dong, Suseong-gu, Daegu, one of the top school districts in the region, and it is analyzed that the strong business potential served as a driving force attracting investors.

Daegu Suseong-gu Hwanggeum-dong 'Hoban Summit Golden Sky' Bird's-eye View

According to the investment banking (IB) industry on the 3rd, Cross 134 Holdings, the developer of the tentatively named ‘Hoban Summit Golden Sky’ project, recently raised 400 billion KRW in PF project funds. The PF loan was divided into a senior loan of 250 billion KRW and a subordinated loan of 150 billion KRW, with the lender group being assembled accordingly. Securities firms such as Shin Young Securities were mainly involved as investors.

Preferred shareholders of Cross 134 Holdings include ‘Leading No.19 Private Equity Fund (Ltd.)’ established by Korea Securities Finance and Leading Asset Management. Common shareholders are individuals involved in the development implementation.

The developer plans to use the raised funds to repay existing borrowings and cover construction and other development costs. Financial institutions involved in the existing loans include NongHyup Central Association, Credit Union Central Association, Military Mutual Aid Association, Kyobo Life Insurance, Lotte Card, and Meritz Securities.

This project involves constructing and selling four residential-commercial complex buildings on a site of 19,239㎡ (approximately 5,830 pyeong) at 851-13 Hwanggeum-dong, Suseong-gu, Daegu, with heights ranging from 5 basement floors to 44 above-ground floors. It consists of 592 apartment units, 146 officetel units (in one building), totaling 677 units, along with auxiliary facilities.

Among residential complex projects in the Hwanggeum-dong area, this is known to be the largest in terms of area and number of units. It is located in a prime station area of Daegu Subway Line 3, surrounded by prestigious schools such as Hwanggeum Elementary, Kyungshin Middle, and Neungin High School, as well as a dense cluster of academies, making it highly regarded for its school district. The surrounding living infrastructure is also well established, including Dongdaegu Station, Shinsegae Department Store, Kyungpook National University Hospital, and Homeplus.

The lender group that provided funds for this PF project cited the excellent business potential as the investment background. An executive in charge of PF at a financial company said, "Hwanggeum-dong, Suseong-gu, is considered one of the top local school districts, rivaling Daechi-dong in Gangnam-gu, Seoul," adding, "It has differentiated business potential compared to areas like Buk-gu, Seo-gu, and Nam-gu in Daegu, where unsold properties are concentrated."

The construction company, Hoban Construction, provided joint guarantees for this PF loan, supporting the lender group recruitment. Hoban Construction is ranked 10th in construction capability among general contractors and is regarded as a high-credit A-grade construction company. Despite the PF distress risks, it maintains a debt-free status with more cash equivalents than borrowings.

An IB industry insider stated, "Recently, the PF market has been centered on projects in key areas of Seoul and Gyeonggi, as well as special regions like Suseong-gu in Daegu, where business prospects are excellent and reputable construction companies provide joint guarantees or credit support," adding, "There is a growing trend of regional polarization in the PF market."