As the launch of "private urban complex development," which can raise the floor area ratio to as high as 700%, approaches, Seoul's redevelopment industry is abuzz. Although the Seoul Metropolitan Government has yet to release detailed operating standards, moves to get a head start on projects are accelerating, with resident briefings taking place one after another around station areas and quasi-industrial zones.
According to the redevelopment industry on the 5th, the Preparatory Committee for Private Urban Complex Development around 419, Sadang-dong, Dongjak-gu, Seoul held a resident briefing on the 30th and disclosed its plan to push the project. The target site is within a 500-meter radius of Sadang Station on subway Lines 2 and 4, a station-area zone, and covers 14,044㎡. On the day, the committee explained to owners, including land and other rights holders, the business feasibility analysis reviewed with the trustee as the private project operator and the architectural design plan.
Under the plan presented by the committee, applying a floor area ratio of 405% would allow the creation of a large complex with a total of 1,828 households. The committee plans to begin collecting consent forms from land and other owners starting in July.
A private urban complex development project is also being pursued in Dogok-dong, Gangnam-gu. The committee for the area around 947 Dogok-dong held a resident briefing on the 13th and shared plans to build multifamily housing. The target site is a 23,036㎡ parcel in the station-area zone of Yangjae Station on subway Line 3. The committee believes that applying a 360% floor area ratio would allow the construction of multifamily housing with 735 households, based on 255 owners including land and other rights holders. According to the committee, the current resident consent rate is about 60%.
Private urban complex development is also being considered in Singye-dong, Yongsan-gu; Junggok-dong, Gwangjin-gu; and Samjeon-dong, Songpa-gu. A trustee company official said, "Private urban complex development is expected to offer larger floor area ratio incentives and better business feasibility than existing redevelopment projects," adding, "Inquiries are increasing, centered on major station areas in Seoul."
Private urban complex development is a redevelopment project in which private operators such as trustee companies and real estate investment trusts (REITs) participate as the implementing entities, unlike existing urban complex projects led by the public sector such as Korea Land & Housing Corporation (LH). The aim is to accelerate the supply of dwellings by carrying out high-density mixed-use development of station areas, quasi-industrial zones, and aging residential areas.
The project types are broadly divided into the "growth hub type" and the "residential-centered type." Among these, the residential-centered type, which has a strong character of dwellings redevelopment, can be pursued within a 500-meter radius of station areas or in quasi-industrial zones. When carrying out reconstruction or redevelopment, the floor area ratio can be relaxed up to 1.4 times the legal cap.
In the industry, there is an assessment that the incentives are larger compared to Seoul's existing redevelopment projects. Even compared with the expedited integrated planning, Moa dwellings/Moa Town initiative, and station-area activation projects, the scope of floor area ratio relaxation is significant. Considering that the legal cap on floor area ratio in general residential areas is typically around 250% to 300%, the number of households and profitability can vary greatly depending on the project site.
The threshold for advancing a project is also relatively low. Private urban complex development can proceed with the consent of at least two-thirds of residents and more than one-half of the land area. There is also a view that, because the consent requirements are less burdensome than for reconstruction or redevelopment, the initial project pace can be faster.
However, the Seoul Metropolitan Government is wary of demand concentrating on a particular project method. Because project targets may overlap with existing reconstruction and redevelopment, expedited integrated planning, and the Moa Town initiative, the city says it is important to establish detailed standards.
The Seoul Metropolitan Government plans to finalize and announce the operating standards soon. A city official said, "We are preparing operating standards in a way that eases overlap with existing redevelopment projects, curbs excessive concentration in private urban complex development, and enhances fairness among projects," adding, "We plan to implement them in the second half of the year."