[Funding] 'DMC Espo K·GL Metro' Knowledge Industry Center Development 400 Billion PF

[Asia Economy Reporter Lim Jeong-su] Project financing (PF) funding for the development of a mega knowledge industry center in Hyangdong District, Goyang City, Gyeonggi Province is being secured one after another. During the process of recruiting PF investors, some loans were not subscribed due to the increase in supply of knowledge industry centers in Seoul and location issues, and it is known that the lead managers acquired the unsold loans and conducted sell-downs.

According to the investment banking (IB) industry on the 16th, Narae Enterprise, a project real estate development operator, borrowed 220 billion KRW from a lending group consisting of financial companies including the lead manager Korea Investment & Securities. This is PF for the construction of the Hyangdong District knowledge industry center ‘DMC Espo K’. The loan has a maturity of 2 years and 9 months and was executed in senior, mezzanine, and junior tranches according to repayment priority. The condition is to repay the loan early according to the repayment priority when sales proceeds come in.

Korea Investment & Securities and Hi Investment & Securities provided credit facilities such as purchase commitments and capital replenishment agreements to purchase loans in case of emergency and sold down the unsold loans to investors.

Perspective view of Goyang Hyangdong Knowledge Industry Center

DMC Espo K, constructed by Hyundai Engineering, broke ground this month. It is being built on a 6,400-pyeong land in Block 6 (BL) of the urban support center in the center of Hyangdong District, Goyang, with 2 basement floors and 15 above-ground floors, totaling a gross floor area of 41,954 pyeong. Completion is planned for 2023. Hyundai Engineering, the contractor, provided credit facilities including a responsibility for completion and an agreement to assume the debt if not fulfilled. Korea Asset Trust acted as the trustee.

Next to DMC Espo K in Block 5, ‘GL Metro City Hyangdong’ developed by GL and constructed by Hanwha Construction will be built. A mammoth-scale knowledge industry center with about 59,034 pyeong of gross floor area will be constructed on the urban support facility site of Block 5 in Hyangdong District, with 4 basement floors and 12 above-ground floors.

The implementing corporation DNC Deok-eun recently selected Kiwoom Securities as the lead manager and raised PF funds worth 157 billion KRW. DNC Deok-eun provided joint guarantees for the loan, and Hanwha Construction provided a responsibility for completion agreement. KB Real Estate Trust acted as the trustee.

An IB industry official said, "Although some unsold loans occurred, the project financing was successfully secured, and the development project of the Hyangdong District knowledge industry center will be in full swing. Given its high locational potential, adjacent to Changneung New Town, sales are expected to proceed smoothly."

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