Reconstruction and redevelopment projects at major aging complexes in Yeouido are picking up speed. With the application of Seoul's fast-track integrated planning, the approval process is being shortened, and redevelopment projects are moving faster.
According to the redevelopment industry on the 4th, the project operator for the Yeouido Samik Apartment reconstruction and redevelopment project issued a consolidated bid notice on the 2nd for the selection of partner firms in seven areas, including fire safety, legal advisory, appraisal, underground safety assessment, and environmental, disaster, and traffic impact assessments. This appears to be in anticipation of a fast integrated review ahead of the decision on the redevelopment plan. The goal is to select a builder next year and obtain approval for the project implementation plan.
To obtain approval for the project implementation plan, reviews must be conducted in multiple areas such as architecture, traffic, and environment, and an integrated review processes the individual reviews at once. The integrated review is the core of the fast-track plan, and it shortens the review period, which used to take about two years, to around six months, thereby reducing the redevelopment timeline. In the Yeouido area, more and more complexes are passing the integrated review. The Si-beom Apartment, the largest reconstruction complex in Yeouido, passed the Seoul city integrated review on Nov. 17. Si-beom Apartment is set to be rebuilt into a complex with 2,493 households.
Two complexes, Daekyo and Hanyang, have obtained approval for project implementation. Once approval is obtained, it is generally viewed as having passed the most difficult part of the redevelopment process. After approval, the subsequent steps include approval for the management and disposal plan (the final approval stage that confirms the number of units by size, sale prices, and contribution amounts), relocation and demolition, groundbreaking, and completion.
The fastest-moving site is Daekyo Apartment. As the first site in Seoul's fast-track advisory program, the approval process that used to take more than 10 years was significantly shortened, and the complex obtained project implementation approval in Aug. on the 1 year and 7 month mark after the establishment of the association and selected Samsung C&T as the builder. Daekyo Apartment, currently 12 stories with 576 households, is set to be transformed through reconstruction into four buildings with a maximum of 49 stories and 912 households. Hanyang Apartment, which received project implementation approval last month, will be reborn as a mixed-use complex with four buildings up to 56 stories, 992 households (including rental units), and 60 officetel units.
As expectations for reconstruction rise, major complexes in Yeouido have been setting record-high prices this year. According to the actual transaction price disclosure system of the Ministry of Land, Infrastructure and Transport, a 151-square-meter exclusive unit in Daekyo Apartment traded for 4.9 billion won in Sept. This was up 1.35 billion won from the previous transaction in Apr. this year (3.55 billion won). Hanyang Apartment and Si-beom Apartment have also set record highs across all floor plans this year.
However, some say the upward price trend has been checked after the Oct. 15 real estate measures were announced. This is because all of Seoul, including Yeouido, was designated as a regulated area (adjustment target area and overheated speculation district) and placed under a land transaction permit zone, subjecting it to restrictions such as limits on transferring association member status and borrowing. In the case of reconstruction, the transfer of association member status is restricted after the association is established, which places many constraints on sales.
Nam Hyeok-u of the Woori Bank Real Estate Research Institute said, "After Yeouido was designated as a regulated area, some complexes are seeing urgent-sale listings hit the market," and added, "As these urgent sales are absorbed by the market, record-high prices are being set. If regulations such as the land transaction permit system are lifted, prices are likely to rise sharply."