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SK Ecoplant headquarters. (Photo: SK Ecoplant) |
[Alpha Biz= Paul Lee] SK Ecoplant has decided to abandon a planned apartment development project near Mongchontoseong Station in Seoul’s Songpa District and sell the project to the state-run Korea Housing & Urban Guarantee Corporation (HUG).
According to an exclusive report by Chosun Biz on March 17, SK Ecoplant had provided credit support for loans worth more than 200 billion won for the project together with major investment firms. However, amid concerns over unsold units and prolonged delays, the development has failed to break ground for several years and will now be transferred to a public entity that plans to build rental housing.
Industry sources said the development and construction rights for the “Bangyi-dong 56 Apartment Development Project” in Songpa District are expected to be transferred to HUG by the end of this month.
The project involves building two apartment towers with 472 units and related facilities, ranging from six basement levels to 27 stories above ground, on 11 land parcels near Mongchontoseong Station on Seoul Subway Line 8.
In 2023, SK Ecoplant established K-Square Eco Songpa PFV with investors including Koramco Asset Trust, Koramco Asset Management, KB Securities and NH Investment & Securities to carry out the development.
A project financing vehicle (PFV) is a special-purpose company set up to raise funds and manage large-scale real estate developments or specific projects.
SK Ecoplant holds a 19.9% stake in the PFV, while NH Investment & Securities and KB Securities each hold 14.9%, Koramco Asset Trust holds 10%, and Koramco Asset Management holds 0.3%.
The PFV secured a bridge loan worth 234 billion won to acquire the land, while SK Ecoplant provided credit support guaranteeing repayment if the loan could not be repaid.
Koramco Asset Management serves as the asset management company (AMC), and SK Ecoplant—also an investor in the project—was originally expected to handle construction.
However, the project has been delayed for three years and is now expected to be sold in its entirety to HUG later this month.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
