DL E&C Proposes Unmatched Financial Cost Reduction Structure for Apgujeong District 5

원본보기 아이콘

DL E&C has proposed business terms that significantly reduce the financial burden on association members in the bidding competition for Apgujeong District 5, a core area of reconstruction in Seoul's Gangnam district. Amid a deteriorating environment for redevelopment projects due to recent high interest rates and rising construction costs, the company has leveraged its industry-leading financial stability to create a structure for tangible cost savings.

The core of this proposal goes beyond simply offering lower interest rates. From the association’s perspective, financial costs are an invisible burden that accrues throughout the entire project. Even a slight increase in the project financing rate results in substantial interest costs accumulating over several years, and unfavorable moving expense conditions can greatly increase the individual burden felt by association members. Furthermore, if the timing for paying association dues is brought forward, liquidity in asset management can sharply decrease. Ultimately, true competitiveness in redevelopment lies not in one standout condition, but in how advantageously the structure of tied-up funds and accumulating interest is changed.

DL E&C has directly targeted this issue in its proposal for Apgujeong District 5. By offering a margin rate of 0% based on the new COFIX balance for essential project financing, it enables groundbreaking reductions in financial costs compared to other districts in Apgujeong. In addition, association project costs for various items-such as design fees, specialized consulting fees for redevelopment, and construction management service fees-will be fully financed without limit.

The terms for moving expenses are also noteworthy. DL E&C has proposed a structure that allows total moving expenses to be financed up to 150% of the LTV, in addition to the legally mandated base moving expenses. Notably, the company is considering applying the same interest rate to additional moving expenses as to the base amount, thereby focusing on lowering the actual perceived financial burden for association members. With these terms, if an additional 2 billion won in moving expenses is applied for, it is expected to save each household about 120 million won in financial costs.

The mechanisms to secure asset liquidity are also concrete. Association member dues can be paid in full upon move-in, or members can choose to defer payment for up to seven years after move-in through a payment guarantee. As for refunds, the full amount will be paid within 30 days after the management disposition and sales contracts are completed, facilitating smooth capital recovery for association members. To achieve this, DL E&C has established a stable financing system by signing high-end financial business agreements with five major commercial banks and five major securities firms.

These conditions are particularly meaningful in that such a structure is only possible with strong financial stability. As of the fourth quarter of 2025, DL E&C had a credit rating of AA- and a debt ratio of 84.3%, which stands out even among large construction companies. The company is recognized for designing an advantageous overall financial structure, not just competing on individual terms, based on its overwhelming financial soundness.

A DL E&C representative stated, "To offer the best conditions exclusively for Apgujeong District 5, we redesigned the entire financial burden for association members, from project financing to moving expenses, deferred dues, and refund timing," adding, "We are confident that these are unprecedentedly dominant terms in the history of redevelopment projects, made possible by financial capabilities that are unrivaled by competitors."

This proposal, which focuses on protecting the real asset value of association members and relieving their interest burden, is expected to become the new standard for bidding in the high-end reconstruction market going forward.

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.