Participation by Hana Securities, KB Securities, and Military Mutual Aid Association
KCC Construction to Build Office with Funding... Completion in 2028
High Feasibility and Stability as a Core Development Project in Gangnam Area
One of the large-scale development projects in the Gangnam area of Seoul, the Suseo Station area complex development project, is set to begin in earnest. Construction will commence following the recent completion of project financing (PF) worth approximately 400 billion KRW for the office complex (office building) construction.
Perspective View of the Suseo Station Area Development Project in Gangnam-gu, Seoul
According to the investment banking (IB) industry on the 17th, Well Advisors Co., Ltd., the developer of the Suseo Station area development 'B1-4 Block (BL)', and Suseo 4 Block SPC recently secured 442 billion KRW in main PF financing from a financial lending consortium. The project site land and other assets were provided as collateral, and the lenders were recruited according to the priority of repayment and collateral rights exercise: senior tranche of 306 billion KRW, mezzanine tranche of 60 billion KRW, subordinated tranche of 40 billion KRW, and junior tranche of 36 billion KRW.
Hana Securities acted as the lead arranger for the fundraising, while Shinhan Bank and KB Securities served as joint lead arrangers for the main PF. Financial companies and investment institutions, including Shinhan Asset Management, Shinhan Capital, and the Military Mutual Aid Association, participated as major lenders alongside the lead and joint lead arrangers. Previously, Eden Asset Management, a real estate development specialized asset management company, reportedly invested 70 billion KRW through a blind fund.
The procured funds will be used to construct a large office building on the B1-4 Block site of the Suseo Station area complex development project. KCC Construction is responsible for the construction, aiming for completion by January 2028. The contractor has committed to a guaranteed completion. If the construction is not completed and the usage permit is not obtained within 42 months (3 years and 6 months), the contractor will bear the repayment burden of the PF debt.
It is expected that PF financing and construction for other project sites will follow soon. The Suseo Station area development project involves constructing nine buildings ranging from eight basement floors to 26 above-ground floors. The completed buildings will house Shinsegae Department Store, offices, officetels (892 units), a 4-star hotel (239 rooms), medical facilities, educational and research facilities, cultural and assembly facilities, and transportation facilities (transfer center, parking lot, etc.).
The development is being promoted through a land-for-land swap method. This method involves landowners transferring their land to the developer and receiving other new land in return. The developer is Suseo Daeto Development, with Kim Jaeyeon, CEO of Well Advisors, holding 100% of the shares. Kim is also known to be leading the redevelopment of the Gangnam Le Meridien Hotel through Well Advisors.
An IB industry insider stated, "The Suseo Station development is a large-scale project that revitalizes the station area by concentrating key regional infrastructure at a transportation hub where Seoul Subway Lines 3 and 5, the Greater Seoul Metropolitan Express Railway (GTX)-A, and the Suseo High-Speed Railway (SRT) pass through. Along with the Hyundai Motor Global Business Center (GBC) and the Jamsil Exhibition and Convention Complex (MICE) district, it is a core Gangnam development project with high business performance and stability, which led to the smooth recruitment of the lending consortium."
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