Refer Report

HL D&I Hanla has won a contract for a new office building in Seongsu-dong, Seoul worth 75.9 billion won (perspective drawing). It is drawing attention as it is the first business site to apply the construction completion guarantee product introduced by the Construction Guarantee Association.

HL D&I Hanla announced on the 2nd that it had won a 75.9 billion won contract for the construction of a new office building in Seongsu-dong commissioned by East West International. The project involves building office facilities and neighborhood living facilities with a total floor area of ​​19,017㎡ from the 7th basement floor to the 16th floor above ground in the area of ​​273-12, Seongsu-dong 2-ga, Seongdong-gu, Seoul.

It was recorded as the first business establishment to utilize the Construction Guarantee Association’s guarantee product. The Construction Guarantee Association’s responsible completion guarantee is a product launched by the Ministry of Land, Infrastructure and Transport in December of last year to support the construction industry that is having difficulties in securing project financing (PF) due to high interest rates.

The project operator, East West International, was able to reduce the procurement interest rate by at least 2% with the guarantee of the Construction Guarantee Association. The lender secured a stable means of credit enhancement, and the construction company was able to win the construction contract without the burden of separate credit enhancement. It is evaluated that all project participants benefited.

An official from HL D&I Hanla said, “The Construction Guarantee Association has moved beyond its role of providing guarantees related to the performance of simple contracts and has taken on the role of strengthening credit in the private PF market.”

Reporter Lee In-hyeok twopeople@hankyung.com

Source: Korean