SH Corporation, Se-gok 2 District Development Profit 2 Trillion Won... "Initial Estimate Was 235 Billion Won"

Seoul Housing and Communities Corporation (SH Corporation) announced on the 25th that the asset value of the Segok 2 District public housing project in Suseo-dong, Yulhyeon-dong, and Jagok-dong, Gangnam-gu, has significantly increased, resulting in development profits exceeding 2 trillion won.

SH Corporation analyzed the results of the Segok 2 District project and reported that through the supply of 1,833 public sale households and 1,962 long-term lease and national rental housing units, as well as the private sale of 109,079㎡ of land (14% of the total area), it earned a total development profit of 2.0178 trillion won.

The initially expected development profit during the early feasibility review was 235.2 billion won. However, development profits increased significantly due to reduced construction costs and the rising asset value of public rental housing. The asset value of public rental housing, including long-term lease and national rental housing, amounts to 1.9071 trillion won. This is the result of raising the public rental housing ratio from 25% to 50% during Mayor Oh Se-hoon's administration in 2009.

SH Corporation also analyzed the project feasibility if the sale housing in Segok 2 District were converted to land lease sale housing.

If sale housing is converted to land lease sale housing, the corporation’s cash flow would worsen, but the asset value of the land owned by the corporation would increase, resulting in development profits reaching 3.2783 trillion won. If the floor area ratio is increased to 300%, up to 6,550 land lease sale housing units can be supplied, and in this case, development profits are expected to rise to 3.3447 trillion won.

Based on this analysis, SH Corporation plans to propose institutional improvements to expand public housing supply in areas where the Greenbelt (development restriction zone) has been lifted. The corporation’s position is that after the Greenbelt is lifted, land should be developed at high density and all residential land should be supplied as public housing.

Kim Heon-dong, President of SH Corporation, emphasized, "We will continue to disclose data transparently to secure management reliability," and added, "To proceed more efficiently with housing supply through the lifting of the Greenbelt, all land in the lifted areas must be supplied as public housing."