A claim has emerged among the owners of Mokdong New Town Complex 10 (Mokdong Complex 10), which is undergoing reconstruction under a trust scheme in Yangcheon District, Seoul, that the project should proceed under a joint venture method.
The Mokdong Complex 10 reconstruction project involves the construction of apartments and ancillary welfare facilities with a height of up to 40 floors and a total of 4,050 units (including 525 public housing units) on a site of 194,686.2㎡ in Shinjeong-dong, Yangcheon District, Seoul. Mokdong Complex 10 passed the apartment reconstruction maintenance plan establishment and maintenance district designation and landscape review by the Seoul City Urban Planning Committee on the 22nd of last month.
According to the real estate industry on the 25th, there is a movement to establish a new reconstruction promotion committee that advocates for a joint venture method, separate from the existing reconstruction preparation committee (Rejunwi), which has currently selected Korea Land Trust (KOREIT) as the preliminary project implementer.
On the 9th, an event was held to explain the changes that would occur if a joint venture method had been pursued for the reconstruction, targeting the owners of Mokdong Complex 10, led by former chairman Hyung-ki of Acro River Park.
An industry official noted, "Unlike the Rejunwi, which is pushing the trust method, there is a movement to change to the joint venture method and establish a new preliminary promotion committee. Currently, there are conflicting opinions among owners who want to proceed with the trust method led by the Rejunwi and those who believe the joint venture method is more advantageous."
The Rejunwi of Mokdong Complex 10 decided on the project direction using the trust method through a vote held for the owners in 2023. About 91% of participants in a vote, which saw participation of more than half of the complex's owners, agreed to proceed with the trust method. Subsequently, in June of the same year, Korea Land Trust (KOREIT) was selected as the preliminary project implementer through bidding.
However, recently, among the owners of Mokdong Complex 10, the argument that the joint venture method is advantageous in terms of reconstruction speed and cost-saving has gained strength. Additionally, there were claims that the trust method vote held at the time only explained the strengths of the trust method and did not provide an opportunity to consider the joint venture method, resulting in an unbalanced distribution of information during the voting.
Furthermore, the recently amended Urban and Residential Environment Maintenance Act is also raising preferences for the joint venture method. The amendment, which came into effect on the 4th of this month, allows for the approval of the promotion committee by the competent district office if at least 50% of landowners agree, even before receiving the announcement of the maintenance district. Previously, the formation of a promotion committee was only possible after being designated as a maintenance district.
Using the trust method allows for the omission of the promotion committee and the creation process, thereby shortening the project duration. However, with the amendment to the Urban and Residential Environment Maintenance Act, the process of forming the promotion committee has been simplified, which diminishes the advantages of the trust method.
Currently, among Mokdong New Town complexes 1 to 14, the complexes promoting reconstruction under the joint venture method are ▲Complex 3 ▲Complex 4 ▲Complex 6 ▲Complex 7 ▲Complex 8 ▲Complex 12, a total of six.
The complexes promoting reconstruction under the trust method are ▲Complex 1 (Woori Asset Trust, Shinhan Asset Trust) ▲Complex 2 (Hana Asset Trust) ▲Complex 5 (Hana Asset Trust) ▲Complex 9 (Korea Asset In Trust) ▲Complex 10 (KOREIT) ▲Complex 11 (Korea Asset In Trust) ▲Complex 13 (Daishin Asset Trust) ▲Complex 14 (KB Real Estate Trust), a total of eight.