Change of Maintenance Zone Proposal Submitted to Seoul City Early This Year
Integrated Reconstruction into a Maximum of 49 Floors and 1,332 Households
Construction Company to Be Selected Within the Year After Association Establishment
Daechi Useong 1st Complex and Ssangyong 2nd Complex, which are promoting integrated reconstruction, will merge their associations and select a construction company within the year.
According to the maintenance industry on the 27th, the Daechi Useong 1st Complex association submitted the integrated reconstruction maintenance plan decision and maintenance zone change proposal to the Seoul city government earlier this year. Once it passes the city’s urban planning committee review and the decision is officially announced, the association merger process will begin. The maintenance plan decision and maintenance zone change proposal applied for by the association to Gangnam-gu completed public inspection announcements in October-November last year.
If the two complexes are combined for reconstruction, it will transform into a large complex with up to 49 floors and 1,332 households. The two complexes received project implementation approval in 2022 and 2017 respectively and had been pursuing reconstruction individually until they agreed on integrated reconstruction in October 2023. Daechi Useong 1st Complex is a complex with 476 households completed in 1984. Ssangyong 2nd Complex was completed in 1983 and consists of 364 households.
The decision to merge the projects was driven by the judgment that it would help increase the asset value of each household. If pursued individually, Useong 1st Complex was expected to build 712 households, and Ssangyong 2nd Complex 560 households. Both sides agreed to maintain the Daechi Useong 1st Complex association and dissolve the Ssangyong 2nd Complex association. Costs incurred during the individual reconstruction processes will be borne by each association.
Before selecting a construction company, the association began selecting design firms and construction management (CM) firms. Under current law, design firms, maintenance firms, and appraisal firms are selected by vote at the general meeting. The two associations plan to present these agenda items at the integrated association establishment general meeting.
Jeon Young-jin, head of the Daechi Useong 1st Complex association, explained, "Once the city officially announces the maintenance plan decision and zone change, we can hold a general meeting after three months, so we are simultaneously preparing for the establishment of the integrated association. Consent forms for the integrated association can be collected after the announcement. We plan to expedite bidding announcements for necessary design firms before the general meeting to reduce time."
The association expects that if the project proceeds as planned, the construction company selection could be possible as early as this fall. Under current law, construction company selection is possible after the establishment of the reconstruction association. Ssangyong 2nd Complex had designated Hyundai Construction as the preferred negotiation partner in 2018 and signed a preliminary contract. If the Ssangyong 2nd Complex association dissolves, the integrated association must select a new construction company.
Jeon Young-jin said, "We plan to announce the construction company selection within the year. Depending on the city’s announcement timing, we expect to issue a bidding announcement in the fall. We are also preparing for the integrated review, the next step after construction company selection, and will minimize time wastage to proceed with the project as quickly as possible to meet the members’ wishes."
As the reconstruction project gains momentum, sale prices continue to rise. The 84㎡ unit in Daechi Useong 1st Complex was traded on the 8th of last month at 2.88 billion KRW, 90 million KRW higher than the previous highest price of 2.79 billion KRW. The 115㎡ unit recorded 3.3 billion KRW in November last year. The 84㎡ unit in Ssangyong 2nd Complex was traded at 2.94 billion KRW in early January, more than 200 million KRW higher than the previous transaction. The 120㎡ unit was traded at 3.47 billion KRW on the 18th of last month, 80 million KRW higher than the previous highest price of 3.35 billion KRW.
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