Hyundai Construction Proposes 1.5 Trillion Won Total Construction Cost for Hannam 4 District, Lower Than Union's Suggestion

Submission of the '5 Major Commitment Letters' Guaranteeing Responsible Completion, Loan Interest Rates, and Property Compensation

Hyundai Engineering & Construction announced on the 10th that it proposed a total construction cost of 1.4855 trillion KRW for the Hannam 4 District redevelopment project, which is lower than the construction cost estimate proposed by the union. Initially, the union proposed 1.5723 trillion KRW, so this amount saves 86.8 billion KRW. A Hyundai E&C official emphasized, "This can reduce the burden per union member by about 72 million KRW."

In addition, to guarantee the rights and interests of union members, Hyundai E&C signed and submitted five major commitment letters including a responsibility completion pledge, a project loan interest rate pledge, an apartment and commercial property acceptance pledge, a construction contract seal pledge, and a commitment on responsibility and cost burden for alternative design permits and approvals.

They also proposed a condition to fully finance the project cost with a guaranteed payment and responsibility procurement at an additional interest rate of 0.1% above the negotiable certificate of deposit (CD) rate, even if interest rates rise. If 1.5 trillion KRW is borrowed for the project cost, even a 1% difference in interest rates could save about 42.5 billion KRW in financial costs. This translates to a reduction of more than 36 million KRW in burden per union household.

Hyundai E&C also promised a fast project pace. Based on extensive construction experience near Yongsan-gu, they calculated an appropriate construction period and pledged to start construction immediately after relocation and demolition without any work stoppage, proposing a total construction period of 49 months. They also presented solutions for unsold commercial facilities. Together with real estate consulting firm Avison Young, they plan to enhance the value and marketability from the composition to the sale of commercial facilities and disclosed plans to assign dedicated personnel to activate commercial space sales.

Furthermore, in case of unsold units, they proposed a condition to compensate 100% in kind at the initial general sale price not only for apartments but also for commercial spaces. The in-kind compensation standard is also set at the initial general sale price, and Hyundai E&C stated that it will not shift the responsibility for unsold units onto the union. To emphasize their commitment to swift project execution and successful completion, Hyundai E&C signed the construction contract seal at the time of bidding and is prepared to conclude the contract immediately upon selection as the construction company.