Hyundai E&C Proposes Unprecedented Terms for Apgujeong District 2, Including Four-Year Deferral of Contribution Payments

If Cooperative Members Have Difficulty Securing Loans,
The Contractor Will Provide Direct Funding

Apgujeong Hyundai Apartment. Photo by Hyunmin Kim kimhyun81@

Hyundai Engineering & Construction announced on September 12 that it has established financial terms allowing members of the Apgujeong District 2 cooperative to defer their contribution payments for up to four years after moving in.

Hyundai Engineering & Construction had previously submitted a solo bid for the reconstruction project in Apgujeong District 2, Gangnam-gu, Seoul.

Typically, 100% of the contribution payment is due at the time of occupancy. However, under these new terms, even if a cooperative member has difficulty securing a loan to cover their contribution, Hyundai Engineering & Construction will take responsibility for directly providing the funds, enabling members to defer payment for up to four years after moving in.

Additionally, if the current relocation loan limit of 600 million won per member is insufficient, Hyundai Engineering & Construction proposed to take responsibility for providing additional relocation loans, offering a loan-to-value (LTV) ratio of 100%. The company also offered to apply the same interest rate to the additional relocation loan as the basic relocation loan, even though the additional loan rate is typically 1-2% higher than the basic rate secured by the cooperative at a low interest rate.

For project financing, Hyundai Engineering & Construction proposed to fix the rate at 'certificate of deposit (CD) rate + 0.49%.' The company pledged to maintain this fixed additional rate even if market rates rise, thereby enhancing financial stability for cooperative members.

A representative from Hyundai Engineering & Construction stated, "We have proposed financial terms for Apgujeong District 2 that are unprecedented in previous reconstruction projects," adding, "Based on a partnership built on trust with cooperative members, we aim to create a 'new symbol of residential living in Korea.'"

Hyundai Engineering & Construction was selected as the preferred negotiating party after submitting a solo bid for Apgujeong District 2. The final decision on the construction contractor will be made on September 27.