The Battle for Hannam 3 Contracts Begins... Hyundai Construction Proposes 'The H Hannam'

Construction cost proposal of 1.7377 trillion KRW... About 150 billion KRW less than the union's expected price
100% LTV for relocation costs·100% payment of contributions one year after move-in, proposal for in-kind compensation
Promotion of commercial facilities with Hyundai Department Store... Collaboration with global commercial real estate consulting firm

[Asia Economy Reporter Yuri Kim] Hyundai Engineering & Construction announced on the 19th that it has proposed 'The H DH Hannam' for the Hannam 3 District redevelopment project in Yongsan-gu, Seoul.

The Hannam 3 District redevelopment project involves redeveloping the aging multi-family and multi-household residences in the area around 686 Hannam-dong, Yongsan-gu, Seoul, into 197 apartment buildings ranging from 6 basement floors to 22 above-ground floors, comprising 5,816 households, along with ancillary welfare facilities and retail facilities.

Hyundai Engineering & Construction presented the alternative design standard construction cost as 1.7377 trillion KRW. The company explained that while maintaining the union's recommended closing level at an equal or higher standard, it reduced approximately 150 billion KRW compared to the union's estimated price.

For relocation measures, they proposed responsible procurement of additional relocation cost LTV 60% beyond the basic relocation cost collateral recognition ratio (LTV) of 40%. Hyundai Engineering & Construction stated, "It is expected that stable relocation of about 8,000 households within the district will be possible." Additionally, they proposed 500 billion KRW for project promotion expenses to cover costs related to eviction and tenants, undersized lots, and permit delays.

They proposed a payment timing selection system for union members' contribution payments. Hyundai Engineering & Construction explained, "We once again proposed the payment timing selection system for union members' contributions, such as '100% payment one year after moving in,' which was highly welcomed by union members during the last bid," adding, "We also added a proposal to prepay 50% of the refund amount at the time of general sale contract so that union members can enjoy more benefits."

Furthermore, as in the previous bid, they stated that in case of unsold units, they would accept apartment and commercial facility compensation based on the initial general sale price. Hyundai Engineering & Construction said, "This is to eliminate the risk of additional burden that union members worry about the most."

Hyundai Engineering & Construction emphasized, "Based on financial stability, there is no need for Housing and Urban Guarantee Corporation (HUG) guarantees when procuring project funds and relocation costs, which is advantageous by about 109 billion KRW in fees alone."

For commercial facilities within the complex, they proposed the entry of Hyundai Department Store, equipped with world-renowned luxury brands. They plan to promote a pedestrian passage connecting the department store and the newly established station if a new station on the Shinbundang Line is constructed. They also proposed a detailed operation plan to enhance the value of the facility in collaboration with global commercial real estate consulting firm Avison Young.

Hyundai Engineering & Construction stated that after completion, they will place a dedicated AS center within the complex for 10 years and provide landscaping gardening services for 10 years, ensuring systematic quality management. They set 173.7 billion KRW, equivalent to 10% of the total construction cost, as the contract performance bond.

Immediately after winning the contract, they plan to establish a Hannam 3 District Task Force (TF) with an executive-level responsible person and propose to appoint a site manager at the executive level early even after construction begins.

Meanwhile, the union general meeting for selecting the contractor for Hannam 3 District is scheduled to be held on the 21st. Hyundai Engineering & Construction, GS Engineering & Construction, and Daelim Industrial are participating in the bid. Last year, during the contractor selection process for Hannam 3 District, there were signs of overheating, leading to a field investigation by the Ministry of Land, Infrastructure and Transport, and a request for investigation of the three bidding companies by the Seoul Metropolitan Government. However, the prosecution cleared the bidding construction companies of charges, leading these three companies to compete again. Hyundai Engineering & Construction emphasized in this regard, "We thoroughly excluded the issues pointed out during the joint inspection by the Ministry of Land and Seoul City in this bid."

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