Hyundai Construction "1.9 Billion KRW+α Profit Per Unit Compared to Competitors"
Submitted '5 Major Commitment Letters' to Union
As Hyundai Engineering & Construction and Samsung C&T compete to win the redevelopment project for Seoul Hannam 4 District, Hyundai Engineering & Construction recently submitted a 5-point pledge to the association, promising to secure profits of more than 190 million KRW per association member. This pledge aims to maximize the profits for association members through cost savings in construction and other measures, drawing attention as it may play a decisive role before the contractor selection.
According to industry sources on the 18th, Hyundai Engineering & Construction's 5-point pledge includes reducing construction costs, minimizing financial expenses, shortening construction periods, and expanding sales revenue through increased commercial facility profits.
Hyundai Engineering & Construction proposed a construction cost of 8.81 million KRW per pyeong through an efficiency strategy. This level allows for cost savings exceeding 84 billion KRW compared to competitors. Hyundai Engineering & Construction explained that they intend to maintain high quality while reducing costs based on proven technical skills and apartment project experience. From the association members' perspective, this translates to a cost reduction of about 72 million KRW per household.
To guarantee this, Hyundai Engineering & Construction also submitted a ‘Construction Contract Signing Pledge’ and a ‘Responsibility and Cost Burden Pledge for Alternative Design Permits’ to the association. They further stated that they can sign the contract immediately upon contractor selection and will responsibly complete differentiated designs without project delays.
They also offered benefits in financial costs. Hyundai Engineering & Construction submitted a ‘Project Loan Interest Rate Pledge’ promising to fully finance the project at a negotiable certificate of deposit (CD) rate plus 0.1%. By leveraging the interest rate difference, they pledged to reduce financial costs by 21.5 billion KRW, providing an additional profit of about 18 million KRW per household.
They emphasized minimizing association members’ risks by offering a fixed interest rate that remains unchanged even if interest rates rise, rather than unstable financial conditions during the project. They also promised to shorten the construction period. By reducing the construction period from 57 months to 49 months, they expect to save an additional 84.4 billion KRW in financial costs and minimize project uncertainties. Hyundai Engineering & Construction submitted a ‘Completion Responsibility Pledge’ signed to the association, promising to complete the construction within the promised period, highlighting that faster construction benefits the association by advancing move-in dates and reducing cost burdens.
They also pledged to secure profits from commercial facilities. They plan to increase the commercial facility area by 4,240 square meters compared to the existing plan, generating an additional 64.1 billion KRW in revenue. To revitalize the commercial district, they will collaborate with Avison Young, a global real estate consulting firm, to maximize the value and marketability of the commercial facilities and assign dedicated personnel to promote commercial space sales.
In particular, they signed and submitted an ‘Apartment and Commercial Property Acquisition Pledge,’ promising to acquire unsold apartments and commercial spaces at the initial general sale price to protect association members’ interests. They guaranteed about 31 million KRW in revenue per household compared to competitors solely from sales income.
A Hyundai Engineering & Construction official said, "The profits guaranteed to association members through the 5-point pledge, including construction cost savings, minimized financial expenses, shortened construction periods, and additional commercial facility profits, amount to more than 190 million KRW per household. This is not just a numerical benefit but an official document that encompasses project stability, transparency, and benefits, showing our commitment to fulfilling promises with the association and presenting a trustworthy proposal."
Meanwhile, Hyundai Engineering & Construction has named the redeveloped Hannam 4 District complex ‘The H Han River.’ They plan to establish The H Han River as a symbol of luxury riverside living and a new landmark along the Han River.
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