Bangbae Shinsamho to Hold General Meeting on 26th to Select Contractor... Project at a Crossroads for Normalization

HDC Hyundai Development Company Selected as Preferred Negotiation Partner
Conflicts Arise Over Dismissal of Association President... Attention on Approval Outcome

The Bangbae Shinsamho Apartment Reconstruction Association will hold a general meeting on the 26th to select a construction company.

Overview of Bangbae Shinsamho Complex

According to industry sources on July 14, the Bangbae Shinsamho Reconstruction Association, after two competitive bidding attempts to select a construction company failed, switched to a private contract and designated HDC Hyundai Development Company as the preferred negotiation partner.

Conflicts intensified as some claimed that the association had obstructed competitive bidding and rumors circulated about Samsung C&T's participation. The third association president was dismissed. Later, the rumors regarding Samsung C&T's participation were proven to be unfounded, and the situation began to stabilize.

If a construction company is confirmed at this general meeting, the project will proceed through subsequent steps. However, if the selection fails, the bidding process must start over from the beginning. There are concerns that delays in the schedule could lead to increased financial costs and the application of the maintenance project sunset clause. Depending on the results of next year's Seoul mayoral election, there is also a possibility that regulations will be strengthened. The government's tightening of loan regulations has made it even more difficult to secure relocation funds and project financing.

An industry official stated, "This general meeting is effectively the last golden opportunity for the Bangbae Shinsamho reconstruction project to get on track. Considering government policies and market conditions, it will become even more difficult to restart the project if it fails," adding, "This meeting is not just about selecting a construction company, but is a critical turning point that will determine whether the 41-story design proposal is maintained and whether the project proceeds normally."

The business terms proposed by HDC Hyundai Development Company include a construction cost of 8.76 million won per 3.3 square meters, a project cost interest rate of CD+0.1%, a 100% LTV for relocation loans, and 200 billion won in project promotion expenses. Recently, due to increased construction costs, higher cost burdens, and restrictions on PF loans, construction companies have been avoiding aggressive bids. Nevertheless, these terms are considered exceptionally favorable for a private contract.

Bangbae Shinsamho Apartment was completed in 1981 and consists of six buildings with 481 units. It was first designated as a maintenance area in 2016 and received approval to establish an association in 2019. After reconstruction, it will be transformed into a complex with five basement floors and 41 above-ground floors, totaling 920 units. Nearby schools include Seorae Elementary School, Bangbae Middle School, and Seomun Girls' Middle and High School.