Small apartment complexes in key areas of Seoul's Gangnam district are accelerating their redevelopment projects. Single, small-scale apartment buildings often pursued redevelopment by integrating with nearby complexes. Recently, however, some integrated redevelopment efforts have stalled as interests clashed among apartment complexes or as regulations, such as the levy on excess redevelopment profits, blocked integration. As a result, some complexes are shifting their maintenance projects toward standalone redevelopment as a realistic alternative.
According to the redevelopment industry on the 12th, the Sinbanpo 20th Reconstruction and Maintenance Association, located at 60-78 Jamwon-dong, Seocho-gu, Seoul, on a 9,593.7-square-meter site, will hold a general meeting of association members on the 16th to select a contractor. The site is pushing a small-scale redevelopment to increase the current 112 households to 142. It sits between Jamwon Station on Seoul Subway Line 3 and Banpo Station on Line 7, near Maple Xi (formerly Sinbanpo District 4), Jamwon Donga, and HAUTERRE Banpo.
An association official said, "After the contractor is selected, we will prepare for integrated deliberations for redevelopment." The association has already held two on-site briefings for contractor selection, and after SK ecoplant participated alone and the bid failed, conditions were met to allow a negotiated contract with the builder. SK ecoplant plans to apply its high-end brand "DE'FINE."
Sinbanpo 20th had pursued integrated redevelopment with Sinbanpo District 4, which has been rebuilt as Maple Xi. However, the integrated redevelopment fell through due to the application of the levy on excess redevelopment profits, which recoups up to 50% of the excess amount when the development gain during redevelopment exceeds 80 million won per association member. The levy was deferred for complexes that applied for management disposition approval by the end of 2017, but it applies if the approval is sought after that. Sinbanpo District 4 applied for management disposition approval at the end of 2017 and was exempted from the levy, but Sinbanpo 20th had not applied. A legal interpretation concluded that if the two sides proceeded with integrated redevelopment, the entire complex would become subject to the levy, leading to Sinbanpo 20th being excluded from the integration.
The nearby Sinbanpo Hanshin Hue Plus 26th (Sinbanpo 26th) apartment is also pursuing small-scale redevelopment. It applied to Seocho-gu, the local district, for approval to establish an association, and the district is conducting a public notice and inspection through the 21st. Built in 1984, the complex consists of one 66-household building at 62-4 Jamwon-dong (district area 4,990.6 square meters). Because it is a redevelopment with fewer than 200 households, it is subject to the Special Act on the Maintenance of Vacant Houses and Small-Scale Dwellings, not the Urban and Residential Environment Improvement Act. The complex is a three-minute walk from Jamwon Station on Line 3. A Seocho-gu official said, "After the public notice and inspection, the approval to establish the association will be granted at the end of this month or in early Jun.," adding, "After the association is established, the redevelopment schedule, including contractor selection and architectural deliberations, will proceed."
Garam Apartment in Irwon-dong, Gangnam-gu, has also formed a promotion committee and is moving forward with standalone redevelopment. Gangnam-gu announced on Apr. 30 that it approved the redevelopment promotion committee for Garam Apartment, located at 735 Irwon-dong (41,144.7 square meters). The plan is to rebuild the existing 496 households in five stories above ground into up to 25 stories and 818 households, including 61 rental dwellings. Earlier, on Dec. 24 last year, the Seoul Metropolitan Government convened the Urban Planning Committee and designated the site as a maintenance zone.
Song Seung-hyeon, head of Urban and Economy, said, "It's best for standalone complexes to combine several sites for integrated redevelopment, but differing interests by complex often make that hard to achieve," adding, "If redevelopment is delayed, the complexes age and asset value keeps falling, so they are choosing small-scale redevelopment as a realistic alternative." Song added, "Even with small-scale redevelopment, Gangnam-area complexes can leverage their locational advantages, and in many cases they hold significant land equity, so association members' burdens are not large," noting, "Many complexes are also seeking to secure profitability by increasing the volume of general sales units."
Ko Jun-seok, a professor at Yonsei University's Sangnam Institute of Management, said, "Despite pursuing small-scale redevelopment due to practical conditions, many face difficulties in creating and operating community facilities compared with large complexes."