HDC Hyundai Development Company Stakes Everything on Yongsan Front Zone 1 with Bold Construction Cost and Relocation Loan Proposals

Proposed Construction Cost per Pyeong: 8.58 Million Won, Minimum Relocation Loan: 2 Billion Won
Expanded Gross Floor Area by 5,800 Pyeong with Underground Passage and Commercial Facilities
HDC Hyundai Development Company Holds Company-wide Briefing on Bid

HDC Hyundai Development Company has staked everything on securing the contract for Yongsan Maintenance Depot Front Zone 1, where it is competing head-to-head with POSCO E&C. The company lowered the construction cost per pyeong by 1 million won compared to the estimated price and proposed a relocation loan of 2 billion won per cooperative member.

A bird's-eye view of Yongsan Maintenance Depot Front Zone 1 proposed by HDC Hyundai Development Company. Photo by HDC Hyundai Development Company

According to the maintenance industry on April 19, in the bidding for Yongsan Maintenance Depot Front Zone 1 that closed on April 15, HDC Hyundai Development Company proposed a total construction cost of 924.4 billion won, while POSCO E&C proposed 909.9 billion won.

The construction cost per pyeong (3.3㎡) proposed by HDC Hyundai Development Company is 8.58 million won. This is about 1 million won lower than the estimated price per pyeong (9.6 million won) suggested by the cooperative. While the total construction cost is higher than POSCO E&C due to HDC Hyundai Development Company's larger calculated gross floor area, the price per pyeong is lower than POSCO E&C's 8.94 million won.

HDC Hyundai Development Company proposed a design that includes a gross floor area approximately 5,843 pyeong larger than that of POSCO E&C. The increase in gross floor area was achieved by considering additional profitability for the cooperative through features such as an underground passage directly connected to Yongsan Station and the arrangement of commercial facilities.

A representative from HDC Hyundai Development Company explained, "Since the basement levels are not included in the floor area ratio, this is a strategic design that can increase future sales revenue without affecting the value of cooperative members' rights. It is also a measure to preemptively manage construction cost fluctuation risks."

Perspective view of Yongsan Maintenance Depot Front Zone 1 proposed by HDC Hyundai Development Company. Photo by HDC Hyundai Development Company

HDC Hyundai Development Company also proposed a construction period of 42 months, which is 5 months shorter than POSCO E&C. By shortening the construction period, the company aims to facilitate quicker move-in and reduce the financial burden (interest) for cooperative members, while also offering them commercial property sales revenue.

For the minimum relocation loan, HDC Hyundai Development Company specified the highest guarantee in the domestic urban maintenance sector, offering 2 billion won per cooperative member (LTV 150%). This is 400 million won more than POSCO E&C's offer of 1.6 billion won. In the past, Samsung C&T proposed 1.2 billion won for Hannam Zone 4. For additional loans exceeding the relocation loan, the company proposed an LTV condition of 150%.

In terms of project financing, HDC Hyundai Development Company proposed an industry-low interest rate of 'CD+0.1%'. This is 0.6 percentage points lower than POSCO's proposal of 'CD+0.7%'.

HDC Hyundai Development Company has named the apartment complex in Front Zone 1 'The Line 330', inspired by the length (330 meters) of the sky community bridge to be built at a height of 74.5 meters. Unlike the Yongsan International Business District, which will feature buildings up to 100 stories high, the company plans to create a symbolic landmark with a long, horizontal sky bridge.

The company also proposed a community space offering a 360-degree view of the Han River from 115 meters above ground. An innovative floor plan will be applied to ensure every unit in the cooperative has a Han River view, and eight themed gardens will be created within the complex. The commercial facilities will be designed as an open street mall at ground level.

HDC Hyundai Development Company emphasizes 'connectivity' with various projects in Yongsan. This includes the construction of underground passages connected to Yongsan Station. The company is currently developing the Yongsan I'Park Mall, where its headquarters are located, as well as the underground development of the park in front of Yongsan Station and the site of the Yongsan Railroad Hospital. By winning the contract for Front Zone 1, the company aims to create 'Yongsan HDC Town'.

On April 16, HDC Hyundai Development Company held a briefing session for all executives and employees regarding the bid. Not only the dedicated bidding department but also related departments gathered to hold a meeting, pooling the company's capabilities for the project. Leveraging the advantage of having its headquarters in Yongsan, the company is also exploring ways to create synergies between the commercial facilities in Front Zone 1 and I'Park Mall.

Perspective view of Yongsan Maintenance Depot Front Zone 1 proposed by POSCO E&C. Provided by POSCO E&C

At the time of the construction bidding that closed on April 15, POSCO E&C proposed a total construction cost of 909.9 billion won, significantly lower than the estimated price of 955.7 billion won, and a construction cost per pyeong (3.3㎡) of 8.94 million won. The company also stated it would mitigate construction cost fluctuation risks by deferring construction cost inflation for 20 months.

For additional loans exceeding the relocation loan, POSCO E&C proposed an LTV condition of 160% and also promised to secure 4 trillion won in project financing. The company presented designs guaranteeing 100% Han River views for cooperative members, the creation of three sky community spaces, and decided to apply its high-end brand 'Othier' as the complex name.

The redevelopment of Yongsan Maintenance Depot Front Zone 1 involves the construction of 777 apartment units and 894 officetel units, as well as retail, neighborhood living, and office facilities in 12 buildings ranging from six basement levels to 38 stories above ground, located at 40-641 Hangangno 3-ga, Yongsan-gu. The cooperative will operate a promotional center and hold a joint briefing session next month, and will hold a general meeting in mid-June to select the final contractor.