Kim Heon-dong, President of SH Corporation, "Housing projects to be converted to building sale housing or floor area ratio to be increased"

If Only Buildings in Naegok-dong Were Sold, Development Profits Would Be Greater
"We Will Maximize Floor Area Ratios in Guryong Village and Seongdwi Village"
Building Sale Supply Ready but Legal Revisions Pending

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Seoyul] Kim Heondong, President of Seoul Housing and Communities Corporation (hereinafter SH Corporation), announced that future housing projects will shift to supplying 'building-only sale housing' where only buildings are sold, or will increase the floor area ratio.

At a press briefing held at SH Corporation headquarters at 10:42 a.m. on the 22nd to evaluate the results of the Naegok District project, Kim Heondong stated, "In future housing projects, even if sales are made, only the buildings will be sold." He added, "When constructing on the hard-to-secure land, we will increase the floor area ratio to build at high density. For future developments such as Guryong Village and Seongdui Village, we will make efforts to maximize the floor area ratio."

SH Corporation achieved development profits of 1.3036 trillion KRW through supplying 2,214 sale housing units and 2,138 rental housing units in Naegok District, as well as selling 103,306㎡ of private land (12.7% of the total area). This is five times the initially expected development profit of 215.6 billion KRW at the start of the project.

[Image source=Yonhap News]

President Kim Heondong's remarks are based on a prior business feasibility analysis of supplying building-only sale housing in Naegok District. Building-only sale housing, commonly known as land lease housing, differs from conventional sale housing where both land and buildings are sold; instead, SH Corporation leases the land to residents and sells only the buildings.

SH Corporation analyzed that converting existing sale housing to building-only sale housing or increasing the floor area ratio to expand building-only sale housing supply would significantly increase development profits. According to the data, converting 2,214 sale housing units to building-only sale housing would increase development profits to 2.3896 trillion KRW (based on official prices). President Kim said, "If only buildings had been sold in the Naegok-dong housing project, the corporation could have gained greater profits from the increase in land value. Selling buildings only allows citizens to acquire housing at a lower price, the corporation gains profits, and overall housing prices can be stabilized, resulting in positive effects."

Increasing the floor area ratio to 450% would enable the supply of 8,960 building-only sale housing units, and development profits would increase to 3.1628 trillion KRW (based on official prices) due to increased land asset value and improved cash flow. President Kim stated, "If greenbelt areas are to be sacrificed for construction, institutions want to increase the floor area ratio and invest more in construction costs to build more luxurious buildings. We will make efforts to maximize the floor area ratio in new developments."

In the following Q&A session, when asked if there are any building-only sale housing complexes currently being prepared, President Kim replied, "The corporation has already completed preparations." He added, "Although I cannot specify the locations, we have prepared a considerable amount." He further noted, "In both the presidential election last May and the Seoul mayoral by-election last April, candidates from both ruling and opposition parties pledged to supply building-only sale apartments. We are ready to supply, but we are waiting as there has been no news of related legal amendments."

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