The redevelopment of Eunma Apartment, a symbol of Gangnam's real estate, has gained momentum following the approval of its business implementation plan under the rapid integration planning system. Major redevelopment projects in areas such as Apgujeong, Gaepo, Seocho, Banpo, and Jamsil are now progressing through subsequent procedures. Industry experts believe that construction costs and member contributions will be key factors determining the success of these projects moving forward.
According to the redevelopment industry, there is growing optimism about the acceleration of administrative procedures in Gangnam following the Eunma approval. The Gangnam District has established a task force dedicated to expediting redevelopment projects. Currently, there are 103 ongoing redevelopment projects in Gangnam, with 53 of them being redevelopment sites.
In Daechi-dong, the so-called 'Priority Belt' is also moving forward, starting with Eunma. Daechi Woosung 1st Complex is pursuing a merger with Ssangyong 2nd Complex, with discussions on the merger scheduled for a general meeting in August. Seongkyung Apartment is awaiting approval for its business implementation plan, while Mido Apartment is pushing for changes to its redevelopment plan.
However, some voices in the field express that the perceived speed of the rapid integration planning is not meeting expectations. A representative from the Daechi Woosung 1st Complex stated, "Although we applied the rapid integration advisory method during the redevelopment plan modification process, the number of advisory procedures was greater than anticipated, leading to a slower perceived pace. We hope that the Seoul city government and Gangnam District will expedite the processing of subsequent approvals, including the business implementation plan."
Major redevelopment projects in Apgujeong, Gaepo, Seocho, and Songpa are also progressing. In Apgujeong, construction companies have been selected, with Hyundai Engineering & Construction chosen for zones 2, 3, and 5, and Samsung C&T for zone 4. Apgujeong 2nd Zone has become the first area within the Apgujeong special planning zone to pass the integrated review by the Seoul city government. In Gaepo-dong, the Gaepo Jugong 6th and 7th complexes have entered the business implementation plan approval stage. In Seocho, construction and contractor selection procedures are underway for large complexes along the Han River, while in Songpa, redevelopment efforts are ongoing for Jamsil Jugong 5th Complex, as well as Jamsil Woosung 1st, 2nd, and 3rd complexes and Jangmi 1st, 2nd, and 3rd complexes.
As the pace of redevelopment accelerates, the burden of construction costs is also increasing. Recently, redevelopment projects in Gangnam have been rapidly raising construction costs due to the competitive introduction of high-end brands, specialized exteriors, and luxury community amenities. Even if they clear the approval hurdles, conflicts over unit allocations and member contributions are likely to arise during the management and disposal stage.
Conflicts over construction costs have already materialized in various locations in Gangnam. Cheongdam Leel has been embroiled in disputes after Lotte Engineering & Construction demanded around 130 billion won in settlement for construction costs and delay interest from the association following completion. Issues related to construction cost settlements have also led to delays in occupancy and internal conflicts among some members at The H Daechi Edelweiss. In the Shinbanpo 4th District of Seocho, additional construction cost disputes arose just before occupancy, leading to a settlement agreement after mediation by the Seoul city government.
In projects with little or no general sale volume, the burden of contributions is even more pronounced. The Shinbanpo 18th Complex 337 Building is being pursued through a one-to-one redevelopment method without general sales, resulting in cases where even choosing a smaller unit incurs a contribution of over 1 billion won per household. In projects where it is difficult to offset rising construction costs with profits from general sales, the burden on members inevitably increases.
Go Jun-seok, a professor at Yonsei University's Sangnam Business School, stated, "Ultimately, the viability of redevelopment projects in Gangnam, including Eunma, is the most significant variable. As public contributions and construction cost burdens increase, member contributions will inevitably rise. Even after receiving approval for the business implementation plan, coordinating opinions among members regarding unit allocations and contributions during the management and disposal approval stage will present another challenge."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.