HDC Hyundai Development, which has built up a track record of projects across Seoul's Yongsan district, is bidding for an urban redevelopment project near Sookmyung Women's University Station that will include long-term jeonse (deposit-based lease) public housing.
The company attended a contractor briefing held late last month by Daishin Asset Trust for the redevelopment project in Yongsan, according to industry sources on the 16th. Five builders took part, including HDC Hyundai Development, Dongbu, Kukdong Engineering & Construction, Jeil Construction and Chinhung International.
The tender is an open competition, and consortium bids are not allowed. The bid bond is set at 15 billion won ($10.8 million), with a deadline of Oct. 8.
The project calls for five buildings ranging from six basement levels to 40 stories above ground at 52-6 Galwol-dong in Yongsan, comprising 900 apartment units along with community facilities. Construction costs are estimated at about 540 billion won ($389 million).
In Yongsan, HDC Hyundai Development has developed HDC IPARK Mall and the former Yongsan Railroad Hospital site, and has secured construction rights for Block 1 fronting the Yongsan rail yard. Winning the Sookmyung station project would allow the company to link the site with those existing development and operating assets, it said.
On design, the company is considering working with global architecture firm SMDP, sources said. SMDP has worked on major residential projects in South Korea including Nine One Hannam and Raemian One Bailey, and has collaborated with HDC Hyundai Development on Seoul One IPARK and Yongsan rail yard Block 1.
"Yongsan is a core base where our headquarters and key operating assets are concentrated, and our strengths are the complex development experience we have accumulated there and the ability to link those assets," a company official said. "Working with SMDP, we plan to prepare a high-end design that maximizes the value of the Yongsan cityscape, Namsan views and proximity to the subway station."
HDC Hyundai Development posted second-quarter revenue of 914.6 billion won and operating profit of 122.7 billion won on a consolidated basis. Revenue rose 35.7% and operating profit 53.1% from the previous quarter. It was the first time in about five years that quarterly operating profit topped 100 billion won. The operating margin was 13.4%, staying in double digits for a second straight quarter after 11.9% in the first quarter.
Financial metrics also improved. Consolidated net borrowings stood at 1.1952 trillion won at the end of the first half, down 310.3 billion won from a year earlier. The debt-to-equity ratio fell to 128.5%, and contingent liabilities tied to project financing dropped 33.4% from the end of last year to 1.2876 trillion won.
"Profitability and financial soundness improved together, as revenue from large project sites was recognized steadily and we moved preemptively to improve our financial structure," the company said. "Based on the financial capacity we have secured, we plan to concentrate our bidding capabilities on high-quality urban renewal projects."
