The redevelopment of Eunma Apartment, a symbol of Gangnam's transformation, has gained momentum following the approval of its project implementation plan under the fast-track integration planning system. As major redevelopment projects in Apgujeong, Gaepo, Seocho, Banpo, and Jamsil move forward, industry experts believe that construction costs and member contributions will be critical factors determining the success of these initiatives.
According to the redevelopment sector on July 6, expectations are rising for expedited administrative procedures in Gangnam's redevelopment projects following the Eunma approval. Gangnam District is currently operating a task force dedicated to accelerating redevelopment efforts. There are 103 ongoing redevelopment projects in Gangnam, with 53 of them focused on reconstruction.
In Daechi-dong, the so-called 'Priority Belt' is also progressing following Eunma's lead. Daechi Woosung 1st Complex is pursuing a combined redevelopment with Ssangyong 2nd Complex, with discussions on integration scheduled for a general meeting in August. Seongkyung Apartment is awaiting project implementation plan approval, while Mido Apartment is pushing for changes to its redevelopment plan.
However, some voices in the field express concerns that the perceived speed of the fast-track integration planning does not meet expectations. A representative from the Daechi Woosung 1st Complex stated, "Although we applied the fast-track advisory method during the redevelopment plan change process, the number of advisory procedures was more than anticipated, resulting in a slower perceived pace. We hope that the Seoul City and Gangnam District will process subsequent approvals, such as the project implementation plan, more swiftly in the future."
Major redevelopment projects in Apgujeong, Gaepo, Seocho, and Songpa are also advancing through their respective procedures. In Apgujeong, Hyundai Engineering & Construction has been selected as the contractor for zones 2, 3, and 5, while Samsung C&T will handle zone 4. Apgujeong 2nd Zone has become the first area within the Apgujeong special planning zone to pass the integrated review by Seoul City. In Gaepo-dong, Gaepo Jugong 6th and 7th complexes have entered the project implementation plan approval stage. In Seocho, construction and contractor selection processes are underway for large complexes along the Han River, while in Songpa, redevelopment efforts are ongoing for Jamsil Jugong 5th Complex and Jamsil Woosung 1st, 2nd, and 3rd complexes, as well as Jangmi 1st, 2nd, and 3rd complexes.
The challenge is that as the pace of redevelopment accelerates, the burden of construction costs also increases. Recently, redevelopment projects in Gangnam have rapidly escalated construction costs due to competitive introductions 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 stages.
Conflicts over construction costs have already materialized across Gangnam. Following its completion, Cheongdam Leel has been embroiled in disputes as Lotte Engineering & Construction demanded around 130 billion won in construction costs and delay interest from the association. Issues related to cost settlements have also led to delays in occupancy and internal conflicts among some members of the D.H. Daechi Edelweiss project. In Seocho's Shinbanpo 4 District, additional construction cost disputes arose before occupancy, leading to a mediated agreement with Seoul City.
In projects with limited or no general sale units, the burden of contributions is even more pronounced. The Shinbanpo 18th Complex, which is pursuing a one-to-one redevelopment model without general sales, has seen cases where even selecting smaller units results in contributions exceeding 1 billion won per household. Projects unable to offset rising construction costs with general sale profits will inevitably increase the financial burden on members.
Professor Ko Jun-seok from Yonsei University's Sangnam Business School noted, "The viability of redevelopment projects in Gangnam, including Eunma, ultimately hinges on their economic feasibility. As public contributions and construction cost burdens increase, member contributions will inevitably rise. Even after receiving project implementation plan approval, coordinating opinions among members regarding unit allocations and contributions during the management and disposal approval stage will present another significant challenge."
* This article has been translated by AI.
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