The redevelopment of the "first-phase old new towns," targeted to break ground next year, is picking up speed. The government plans to establish the Future City Fund within the first quarter to ease the burden of project financing and execute loans for initial project costs. Among the first-phase new towns, the leading districts in Gunpo Sanbon, Anyang Pyeongchon and Seongnam Bundang, which are moving relatively fast, are likely to receive initial project cost loans as early as the first half.
On the 8th, according to the Ministry of Land, Infrastructure and Transport (MOLIT) and the Korea Housing & Urban Guarantee Corporation (HUG), MOLIT and HUG recently selected Woori Asset Management as the preferred bidder for the establishment of the first master fund of the Future City Fund and for the management mandate. IGIS Asset Management was named as the second-priority preferred bidder, followed by Shinhan Asset Management and KB Asset Management. MOLIT and HUG plan to negotiate with the preferred bidder and establish the fund as early as February and no later than March.
A HUG official said, "If negotiations fail with the top-ranked eligible negotiator, we will negotiate with the next-ranked eligible negotiator and select a single final firm," adding, "We aim to accelerate the schedule as much as possible and select a manager within the first quarter."
The Future City Fund is a policy fund created to stably procure initial project costs and construction costs for the redevelopment of old planned cities, which requires large-scale financing. As a government-level fund for the first-phase new town redevelopment, it will total 12 trillion won. The manager of the first master fund of the Future City Fund will manage 600 billion won. Its role is to directly provide loans for initial project costs to business sites where the redevelopment zone has been designated and a contractor has been selected, and to purchase beneficiary certificates of sub-funds by project district that implement HUG-guaranteed loans.
The Future City Fund is set to start by supporting the initial project costs of 15 leading districts across the five selected first-phase new towns. Within three months from the date of notification of preferred bidder selection, the entrusted manager will establish and register the fund and execute initial project cost loans to the leading districts of the first-phase new towns. If a project implementer is designated and a contractor is selected in a leading district, initial project cost loans could start as early as the second quarter.
An LH official said, "After completing the formal procedure to designate LH as the project implementer, we will proceed with agreements and briefings related to implementation with the residents' consultative body, after which the selection of the contractor will move forward."
The places expected to receive the first initial project cost loans are the leading districts in Sanbon and Pyeongchon. Initial project cost loans are to be provided after the selection of the project implementer and the contractor, and the four leading districts in Sanbon and Pyeongchon are currently closest to this stage. These four areas have been designated as special redevelopment zones. The four leading districts in Bundang have also passed the city planning committee's review of the redevelopment plan and are expected to be publicly designated as special redevelopment zones soon, putting them in line to receive initial project cost loans quickly. In Goyang, Gyeonggi Province, Ilsan New Town, and in Bucheon, Jungdong New Town, reviews for special redevelopment zone designation are scheduled to be held this year.
An official at the Ministry of Land, Infrastructure and Transport (MOLIT) said, "Once the fund is established, we plan to begin support in line with the conditions as soon as the project implementer is ready," adding, "Currently, four leading districts in Sanbon and Pyeongchon have been designated as special redevelopment zones."
As MOLIT is targeting 2027 for groundbreaking in the leading districts of the first-phase new towns, it is moving to improve regulations to accelerate the projects. MOLIT is pushing measures to ease the fiscal burden of improving educational environments during the redevelopment process. Once redevelopment in the leading districts of the first-phase new towns gets underway in earnest, 37,266 households will begin reconstruction.