"Delaying Contribution Payments to Ease Burden"
Financial Benefits Including Minimum Migration Cost of 1.2 Billion Won
Samsung C&T, participating in the bid for the redevelopment project of Hannam 4 District in Yongsan-gu, Seoul, considered a major project along the Han River, has proposed a condition to postpone the repayment of the contribution fee for up to 4 years after moving in. It will support a minimum relocation cost of 1.2 billion KRW.
Day view of Raemian Glowhills Hannam Pine Tree Tower proposed by Samsung C&T for Hannam District 4. (Provided by Samsung C&T)
On the 5th, Samsung C&T Construction Division announced that it has prepared financial benefits for the Hannam 4 District union members, including ▲a maximum 4-year deferment of contribution fee repayment ▲a minimum relocation cost of 1.2 billion KRW ▲and an LTV (Loan-to-Value ratio) of 150% for union members' relocation costs.
Typically, union members pay 100% of the contribution fee at the time of moving in. However, Samsung C&T proposed a condition allowing payment to be made at either 2 or 4 years after moving in. Samsung C&T explained that this greatly expands financial flexibility to reduce the burden on union members and enable them to earn investment income such as rent during the deferment period.
For union members' relocation costs, they proposed to secure a total of 150% of the relocation cost by procuring an additional 100% on top of the basic LTV of 50%.
Furthermore, they guarantee a minimum of 1.2 billion KRW per household. For example, if the previous asset appraisal value of a property owned by the union is 400 million KRW, the total relocation cost would be 600 million KRW, consisting of the basic relocation cost (LTV 50%) of 200 million KRW plus the additional relocation cost (LTV 100%) of 400 million KRW, with an additional 600 million KRW provided on top of that.
This is to ensure that union members with relatively low asset appraisal values can relocate stably with at least 1.2 billion KRW in funds.
For union members whose previous asset appraisal value is higher than the sale price and who are entitled to a refund, Samsung C&T also offered the benefit of receiving 100% of the refund within 30 days of signing the sale contract.
A panoramic view of the Raemian Glowhills Hannam Penthouse proposed by Samsung C&T for Hannam District 4. (Provided by Samsung C&T)
Regarding the payment conditions for construction costs, Samsung C&T proposed 'progress payments from sales revenue.' Unlike the contractor receiving construction costs upfront as 'progress payments,' this condition allows the union to receive construction costs only when income is generated through sales. The repayment order is also proposed to prioritize mandatory project expenses before paying construction costs, enabling the union to use sales revenue efficiently.
Kim Myung-seok, Head of Samsung C&T Housing Business Division, said, "Based on our stable financing capability with the industry's only highest credit rating (AA+), we have included only the best project conditions that reduce the burden on union members and maximize profits. We will ensure the differentiated conditions proposed to the union are fully implemented to promote swift and stable project execution."
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