POSCO Engineering & Construction announced on the 1st that it clearly presented interest rates in the bid proposal for the front Zone 1 of the Yongsan Maintenance Center, minimizing the financial burden on union members. The redevelopment project for the front Zone 1 of the Yongsan Maintenance Center is in competition for the construction rights between POSCO Engineering & Construction and HDC Hyundai Development Company.
POSCO Engineering & Construction proposed an interest rate of 'CD + 0.7%' for essential project costs required for union operational expenses and service performance. Additionally, it offered a funding rate standard of 'CD + 0.85%', while guaranteeing an additional relocation cost to union members at a housing mortgage loan ratio (LTV) of 160%.
The business promotion cost, a record high scale for a maintenance project, amounting to 1.5 trillion won, will also apply the same interest rate standard as the additional relocation costs.
The payment method for the union members' contribution can also be selected between '100% upon occupancy' or '2 + 2 years deferred payment after occupancy,' with the condition that no interest will accrue before occupancy regardless of the chosen payment method.
In addition, it proposed the condition of 'progress payment within the proceeds from sales' regarding the payment method for the union's construction costs. Unlike the 'progress payment' condition where the contractor receives construction costs based on the progress of construction, 'progress payment within the proceeds from sales' allows the contractor to receive construction costs within the range of proceeds secured through sales by the union, thereby minimizing the union's burden for construction cost payments.
In addition, conditions such as ▲18 months deferral for payment of construction costs after commencement ▲20 months deferral of construction cost inflation after bidding ▲lowest interest procurement through agreements with five major financial institutions were also proposed.
A representative from POSCO Engineering & Construction noted, 'The funding rate is unprecedented compared to past redevelopment projects,' emphasizing that 'these business conditions were proposed after careful consideration to ensure coexistence with the union, not just to pursue company revenue.'
The redevelopment project for the front Zone 1 of the Yongsan Maintenance Center is a large-scale complex development project that will create 777 apartment units and 894 officetels in 12 buildings, 38 stories above ground in the area around Hangang-ro 3-ga in Yongsan District, with a project cost of 955.8 billion won.