'Gangnam Geumssaragi' Cheongdam Samik Apartment Breaks Ground Early Next Year

Confirmed Migration Plan for March-May at the 14th General Meeting
Various Lawsuits Nearing Conclusion... Wings for Reconstruction
Demolition Completed, Construction Expected to Start as Early as March Next Year

Samik Apartment, Cheongdam-dong, Seoul

[Asia Economy Reporter Moon Jiwon] Cheongdam Samik Apartment in Cheongdam-dong, Gangnam-gu, Seoul, considered a 'golden' reconstruction complex in the Gangnam area, is set to begin construction as early as March next year. This marks the first groundbreaking 18 years after the approval of the association establishment in 2003.

According to the maintenance industry on the 16th, the Cheongdam Samik Reconstruction Association held its regular general meeting on the 14th and finalized the decision to proceed with the relocation process from March 1 to May 31. An association official stated, "All 12 agenda items related to relocation and budget were passed with a 95% approval rate from attending members," adding, "Relocation and demolition work will take place this year, with construction scheduled to start in March next year."

Although Cheongdam Samik received management disposition approval in November 2017, the relocation process was delayed for over two years due to lawsuits filed by commercial building owners around the complex, claiming that the association establishment excluding commercial building owners was invalid. However, in March last year, the Supreme Court ruled that "there was no defect in the association establishment approval process," giving the project a green light again.

The Supreme Court reportedly judged that since the commercial buildings were not planned or constructed solely as auxiliary facilities for Cheongdam Samik from the beginning, approving an association composed only of apartment owners was not problematic. Currently, the association has also won up to the second trial in invalidation lawsuits related to the business implementation plan and management disposition plan. An association official said, "Ongoing lawsuits are not expected to pose significant issues."

Concerns arose that Cheongdam Samik members might not be able to obtain relocation loans after the government banned loans for apartments exceeding 1.5 billion KRW on December 16 last year. However, the financial authorities later clarified that projects with management disposition plans approved before the announcement would be exempt, easing worries. Members’ relocation funds will be sourced with 40% from mortgage loans at commercial banks, which is the loan-to-value (LTV) limit, and 20% from the construction company’s funds.

The remaining issue is the pricing level of the general sale units to be released with next year’s construction start. Cheongdam Samik avoided the reconstruction excess profit recovery tax but is subject to the private land price ceiling system. When the management disposition plan was approved three years ago, the general sale price was set at about 48 million KRW per 3.3㎡, but with the significant rise in surrounding apartment prices, the association believes this price level is no longer feasible.

An association official said, "It is difficult to make a premature judgment, but since nearby Cheongdam Xi and others have seen prices rise to about 80 million KRW per 3.3㎡, even with the price ceiling system applied, selling at the management disposition price will be challenging," adding, "Experts also consider about 70-75% of the market price to be appropriate."

Currently, Cheongdam Samik consists of 12 buildings with 12 floors and 888 households, and it is planned to be reconstructed into 9 buildings with 35 floors and 1,230 households. The general sale quantity is 157 units, and the construction company is Lotte Construction. Given nearby development benefits such as the Olympic-daero underground project and Hyundai Motor’s Global Business Center (GBC) construction, it is expected to be a 'lottery sale.'

This content was produced with the assistance of AI translation services.