Gangnam Reconstruction Bids Heat Up as Builders Offer Loans Below CD Rates

Competition for reconstruction projects in Seoul’s Gangnam area is intensifying, with some builders reportedly offering loan terms cheaper than banks for prime sites such as Shinbanpo 19 and 25. The proposals included loans below certificate of deposit rates, prompting the relevant district office to warn that they may violate laws and regulations. Similar situations have also been reported in major redevelopment areas such as Apgujeong and Seongsu. In some cases, the possible use of special purpose companies to bypass limits on direct support has been raised. As competition for lucrative Gangnam projects spreads into financing terms, disputes over bidding practices and legality are expected to grow. Source: mk.co.kr