Unprecedented Terms Comparable to Competitive Bidding
Project Financing at CD+0.1% and Other Favorable Financial Conditions
HDC Hyundai Development Company has been selected as the preferred negotiator for the Bangbae Shinsamho reconstruction project, having presented unprecedented terms comparable to those seen in competitive bidding.
Aerial perspective of the reconstruction design proposal for Bangbae Shinsamho by HDC Hyundai Development Company. Provided by HDC Hyundai Development Company
The contractor selection process for the Bangbae Shinsamho reconstruction project shifted to a private contract procedure after two failed bids on May 9 and May 22. HDC Hyundai Development Company participated in both previous bids and was chosen as the preferred negotiator on May 23.
The private contract proposal submitted by HDC Hyundai Development Company includes the following terms: a construction cost of 8.76 million KRW per 3.3 square meters, a two-year deferral on construction cost increases, project financing at CD+0.1%, 100% payment of the contribution upon move-in, early payment of refunds, and a 200 billion KRW business promotion fund.
HDC Hyundai Development Company proposed a construction cost of 8.76 million KRW per 3.3 square meters, which is significantly lower than the industry average. This is about 700,000 KRW less than major reconstruction complexes in the Gangnam area, such as Shinbanpo 2nd (9.49 million KRW) and Shinbanpo 4th (9.27 million KRW).
The proposal even includes a rare condition in competitive bidding: a two-year freeze on construction cost increases. This contrasts with most recent projects in the Gangnam area conducted through private contracts, where price increases due to inflation are applied at the time of bidding. Given that the contractor selection now takes place after the establishment of the association, which typically means more than two years until permits are obtained, the construction cost freeze could provide the association with hundreds of billions of KRW in tangible benefits.
The project financing condition was proposed at CD+0.1%. This is lower than that of Hannam District 5 (CD+0.9%), which proceeded through a private contract, and Hannam District 4 (CD+0.78%), which was selected through competitive bidding.
HDC Hyundai Development Company also presented an alternative design to dramatically enhance the project's profitability. Compared to the original plan, the number of new units was increased by 30. The proposal includes eight penthouses targeting high-end demand and an additional 125 units with views of the Han River.
There are also notable conditions aimed at reducing the initial financial burden on association members. Requirements such as 100% payment of contributions upon move-in and the provision of a 200 billion KRW business promotion fund are designed to minimize the association's financial burden and accelerate project progress through practical support measures.
HDC Hyundai Development Company has presented its vision to transform Bangbae Shinsamho into a local landmark and unveiled its premium alternative design, "THE SQUARE 270." The company is sequentially revealing a "luxury master plan" that incorporates differentiated view-oriented and community strategies.
Bangbae Shinsamho Apartment is a complex consisting of six buildings and 481 units, completed in 1981. It was designated as a maintenance area in September 2016 and received approval for the establishment of its association in March 2019. After reconstruction, it will be transformed into a complex with six buildings, ranging from five basement levels to 41 above-ground floors, and a total of 920 units.
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