[비즈한국] The Apgujeong District 4 Reconstruction Association in Gangnam-gu, Seoul, has signed a construction contract worth approximately 2 trillion won with Samsung C&T. This comes just 100 days after Samsung C&T was selected as the builder last May. The association plans to use this contract as a springboard to expedite the licensing and permitting process, aiming to complete resident relocation and building demolition by the first half of 2028. The government's comprehensive real estate tax reform and Samsung C&T's strategy to shorten the project duration are seen as the driving forces behind the accelerated timeline.
The Apgujeong District 4 Reconstruction Association and Samsung C&T signed the construction contract on the 31st. Previously, the association held a delegate meeting on the 27th, where the proposed construction contract was passed with 85% approval. It has been exactly 100 days since Samsung C&T was selected as the contractor at the general meeting of association members on May 23. The signing ceremony, held at the association's office at 11 a.m. that day, was attended by Association President Kim Yun-su and representatives from Samsung C&T.
The Apgujeong District 4 reconstruction project involves the integrated redevelopment of Hyundai Apartment Complex 8 and Hanyang Apartment Complexes 3, 4, and 6 in Apgujeong-dong. While the current project plan consists of 9 buildings and 1,664 units, Samsung C&T proposed an alternative design featuring 8 buildings ranging from 5 floors below ground to 67 floors above ground, totaling 1,662 units. The estimated construction cost proposed by the association at the time of contractor selection reached 2.1154 trillion won, excluding value-added tax.
Samsung C&T was selected as the contractor for Apgujeong District 4 last May. They accepted the association's estimated construction cost of 2.1154 trillion won as-is and agreed to reflect the lower of the construction cost index or the consumer price index in the contract until construction begins. They also proposed conditions stating that they would not raise construction costs further due to inflation or changes in geological conditions after construction begins. They set a target to begin construction within 10 months of completing resident relocation, with a construction period of 68 months.
The key to this contract is the shortening of the project schedule. The association aims to apply for Seoul City’s integrated review for urban renewal projects this November and pass the review by February of next year. Afterward, they plan to receive project implementation authorization in June 2027 and management and disposal plan authorization in December of the same year, with the goal of completing resident relocation and building demolition by the first half of 2028. The final move-in target is January 2035.
The speed at which Apgujeong District 4 has finalized its contract is faster than other districts. Apgujeong District 2 took about six months to sign its main contract after selecting Hyundai E&C as its contractor on September 27 last year, finalizing it on March 30 this year. Districts 3 and 5 selected Hyundai E&C as their contractor on May 25 and 30, respectively, but have not yet signed their main contracts. Although the contractor selection for Districts 3 through 5 happened only a week apart, District 4 has taken the lead in signing the main contract.
Apgujeong District 4 Association President Kim Yun-su said at the signing ceremony, "Since we have signed the contract after various concerns and twists and turns, I believe that working together with one heart to achieve the fastest possible relocation and move-in is the way to repay our members." He added, "Samsung C&T and our partners will join forces to carry out the project successfully." A representative from Samsung C&T responded, "We will concentrate our capabilities to ensure the project proceeds as quickly as possible."
The burden of the comprehensive real estate tax is a background factor in accelerating the project's pace. On August 3, the government announced plans to strengthen taxation on high-value homes through tax reform. Consequently, the comprehensive real estate tax burden is expected to increase, particularly for ultra-luxury apartments exceeding a market value of 4 billion won. However, if resident relocation and building demolition are completed before the June 1, 2028, taxation reference date, these properties can be excluded from the comprehensive real estate tax on housing. This is why the association is rushing the project.
Samsung C&T also pushed 'the fastest move-in in Apgujeong' as its business strategy even before being selected as the contractor. They involved Foster + Partners, led by Norman Foster, and PWP, led by landscape architect Peter Walker, in the design, and proposed Han River views and terraces for all member units. How much Samsung C&T can shorten the actual licensing period following this main contract is expected to determine the outcome of the speed race in Apgujeong's reconstruction projects.