Sangye Jugong Complex 5 to Be Reconstructed as "Lorena" by Hanwha After Two-Year Stalemate [Real Estate AtoZ]

Back on Track After Two Years of Stagnation
Relief for the Association and Its Members
Construction Cost Totals 377.2 Billion Won
Expanded from 840 to 996 Units
Lorena Brand to Be Applied
Cost Burden Down by 100 Million Won per Member, Gene

The reconstruction project for Sangye Jugong Complex 5 in Nowon-gu, Seoul, has gained momentum as Hanwha Construction Division has been selected as the new partner. This comes about two years after the contract with the previous builder, GS Engineering & Construction, was terminated due to disputes over cost-sharing.

Sangye Jugong Complex 5. Photo by Kang Jinhyung.

According to the maintenance industry on September 21, the reconstruction association for Sangye Jugong Complex 5 held a general meeting the previous day and confirmed Hanwha Construction Division as the contractor. The estimated construction cost is 7.7 million won per 3.3 square meters, totaling 377.2 billion won. This contract was signed through a private contract method in accordance with current law, after two rounds of bidding in April and July both failed.

Originally completed in 1987, Sangye Jugong Complex 5 will be transformed into five buildings with three basement levels and 35 above-ground floors, totaling 996 units. The number of units will increase from the current 840, and Hanwha Construction Division's apartment brand "Forena" will be applied. The specific name of the complex will be decided at a later date.

Sangye Jugong Complex 5 was once considered the fastest reconstruction project in the Sangye-dong area, but its profitability was weak due to the predominance of small 31-square-meter units and the resulting low land share per household. With only three units available for general sale after accounting for association members and rental units, estimates suggested that each member's cost-sharing would exceed 500 million won, leading the association to terminate its contract with GS Engineering & Construction in November 2023. As a result, the project was stalled for a long period.

The project's profitability was revived thanks to the "profitability adjustment coefficient" system introduced by the Seoul Metropolitan Government. With expanded floor area ratio incentives, the number of rental units was reduced from 153 to 55, while general sale units increased from 3 to 101. Accordingly, the cost-sharing amount per association member is expected to decrease by about 100 million won.

In the Sangye-dong area, Hanwha Construction Division has already completed the "Forena Nowon" complex, a reconstruction of Sangye Jugong Complex 8. With the successful bid for Complex 5, Hanwha Construction Division is poised to establish a large-scale brand town in Sangye-dong, further strengthening its presence in the area.