HDC Hyundai Development Company launched a bold move by proposing extraordinary conditions such as a project financing rate of 'certificate of deposit (CD) rate + 0.1%' to win the redevelopment project for the Yongsan Maintenance Depot Zone 1.
According to the maintenance industry on 2nd, HDC Hyundai Development Company recently proposed a project financing rate of CD + 0.1% to the Yongsan Maintenance Depot Zone 1 redevelopment association.
This is not only lower than the competitor's project financing rate of CD + 0.7% but also the lowest level in the history of urban maintenance projects.
As the total project cost reaches billions of won, it is expected to significantly reduce the financial interest burden on the association, and when considering the period for changing the maintenance plan, it may also lead to interest savings of hundreds of millions of won, according to the maintenance industry.
Also, HDC Hyundai Development Company suggested a minimum relocation expense that directly affects individual members at 2 billion won per household (150% loan-to-value ratio).
There is an advantage in that small owners with low asset valuation can secure sufficient relocation funds, thus eliminating potential delays in the project. HDC Hyundai Development Company proposed to apply the same loan-to-value ratio (LTV) for additional loans exceeding the relocation expenses.
The construction cost proposed by HDC Hyundai Development Company is 8.58 million won per 3.3 square meters, which is more than 1 million won lower than the association's expected price (9.6 million won) and is also cheaper than the competitor's 8.94 million won.
This is the result of including a gross floor area that is 19,298 square meters larger than a competitor while maintaining low construction costs. HDC Hyundai Development Company aims to maximize revenue by optimizing underground space utilization and efficiently placing revenue-generating non-residential facilities.
The construction period has also been shortened to 42 months, five months earlier than competitors. This reduction in construction time not only decreases temporary housing expenses and interest expenses but also increases benefits for association members due to early revenue realization from commercial facilities and other non-residential properties.
HDC Hyundai Development Company proposed the design of nine buildings, claiming that this structure is advantageous for securing promenade space and landscaping area compared to the competitor's twelve buildings.
The landscape design will be developed in collaboration with the landscape team of Samsung C&T, aiming to create an elegant living environment by considering the time spent within the complex.
Measures to address the risk of unsold commercial and office spaces have also been prepared. To minimize the burden on association members, conditions were proposed that in the event of unsold units, 'the highest amount between the initial general sale price or the appraisal value upon completion will be used for compensation.'
It is reported that the project financing rate offered by the competitor POSCO Engineering & Construction is CD + 0.7%, the minimum relocation expense is 1.6 billion won, and the construction cost per 3.3 square meters is 8.94 million won.