[Edaily Park Jung-Soo Reporters Kim Hyung-il and Shin Ha-yeon] The “Bentley Residence Seoul” development project—Asia’s first ultra-luxury residential complex under the “Bentley” brand, currently in the planning stages in Cheongdam-dong, Gangnam-gu, Seoul—is facing difficulties in securing project financing (PF). This comes as HANWHA INVESTMENT & SECURITIES(003530), which was pursuing the role of lead financial arranger, failed to clear its internal investment review process, and #GS Engineering & Construction Corp—which had initially been a strong contender as the general contractor—has also decided not to participate in the project. While #Meritz Securities is currently in discussions to take over as the lead financial arranger, observers predict that it will take a considerable amount of time to finalize the project financing, given the additional burden of sales prices reaching 24 billion won per unit.

◇ Meritz Securities Steps In Where Hanwha Securities Left Off… 'Difficulties' Arise Following GS Engineering & Construction Corp’s Withdrawal
According to the investment banking (IB) industry on the 3rd, Meritz Securities is reportedly considering participating as the lead arranger for the follow-on project financing (PF) for the “Bentley Residence Seoul” development project. A Meritz Securities official stated, “As this matter is currently under discussion, it is difficult to provide specific details.”
Bentley Residence Seoul is a high-end residential complex being built on the site of the former Eunseong Building in Cheongdam-dong, Gangnam-gu, with 7 basement levels and 26 above-ground floors. It is planned to consist of a total of 33 units, including 26 apartments and 7 officetels. The sale price for the apartments (330 million won per 3.3 square meters) ranges from approximately 23.8 billion to 27.3 billion won per unit, while the penthouse on the top floor is priced at 50 billion won.
This project is a “branded residence”—a residential development utilizing the British premium automobile brand Bentley—and marks the second such project globally (following Miami, USA) and the first in Asia. While license and royalty fees paid by developers to use the brand are typically reported in the industry to be 2–5% of sales revenue, the specific contractual terms for this project have not been disclosed.
Initially, HANWHA INVESTMENT & SECURITIES was set to serve as the lead underwriter for this project, but it is understood that the firm withdrew from the project around last June after failing to pass its internal investment review. HANWHA INVESTMENT & SECURITIES had initially considered a financing structure that would raise a total of 480 billion won, divided into 300 billion won in senior debt, 100 billion won in mezzanine debt, and 80 billion won in subordinated debt. Based on total projected sales of 856 billion won, the loan-to-value (LTV) ratio, including subordinated debt, was calculated at 56.1%.
According to the original plan, the main PF loan was to be disbursed in May, construction was to begin, and pre-sales were scheduled to start during the second quarter. The target completion and move-in dates were set for the first quarter of 2030. However, it has been reported that the original schedule is being delayed due to difficulties in securing major lenders.
There were also setbacks in selecting a general contractor. The financial structure outlined in the proposal was designed on the premise that GS Engineering & Construction Corp would assume responsibility for completion and, in the event of non-performance, would assume the debt. Under this structure, if GS Engineering & Construction Corp fails to fulfill its responsibility for completion within 50 months from the initial loan drawdown date, it would assume the project finance debt within a specified range. However, after reviewing its participation in the project, GS Engineering & Construction Corp ultimately decided not to participate.
A GS Engineering & Construction Corp official stated, “We reviewed participation in this project, but following an internal review, we ultimately decided not to participate,” adding, “We have conveyed this decision to the project developer after consultation.”
Although there were market speculations that Meritz Securities—which was mentioned as a potential successor lead arranger—would fully finance the 450 billion won PF loan and that GS Engineering & Construction Corp had been confirmed as the contractor, this differs from the currently confirmed situation. GS Engineering & Construction Corp has decided not to participate in the project, and Meritz Securities is still in discussions regarding its participation as the lead arranger.
Consequently, the existing PF structure will likely need to be reevaluated. This is because even if a new contractor is secured, terms such as the guarantee of completion and credit enhancement will need to be renegotiated.
An industry insider stated, “In the recent real estate PF market, it is not uncommon for lead financial arrangers to go beyond merely organizing a syndicate of lenders and directly underwrite a portion of the funding, such as mezzanine or subordinated debt.” They added, “Since the creditworthiness of the contractor responsible for guaranteed completion and the credit enhancement conditions also determine whether lenders will participate, it appears more time will be needed before the main PF is finalized.”

◇ Ultra-high price of over 24 billion won per unit… Questions surround pre-sales
One of the reasons the financial sector is taking a conservative view of the “Bentley Residence Seoul” project is the ultra-high pre-sale prices. According to the proposal, the pre-sale price per 3.3 square meters of exclusive floor area for the apartments is 330 million won. A 72-pyeong unit costs approximately 23.8 billion to 24.3 billion won per household, while an 82-pyeong unit ranges from 27.2 billion to 27.3 billion won. The price for officetels is 350 million won per 3.3 square meters of exclusive area, and the top-floor penthouse reaches 50 billion won. Total projected pre-sale revenue is approximately 856 billion won.
The LTV, including subordinated debt, is 56.1%, and since the price per 3.3 square meters of exclusive area based on the break-even point (BEP) is only 190 million won, the project was assessed as having sufficient financial stability. For senior debt, the LTV was analyzed at 35.1%, and the exit sales rate was 41.2%.
However, some in the financial sector argue that it is difficult to judge the project’s stability based solely on the low LTV. This is because the projected revenue of 856 billion won—which serves as the basis for the LTV calculation—is itself premised on a sales price that far exceeds 300 million won per 3.3 square meters. If actual sales do not proceed as planned, this could also affect the loan recovery structure.
Even when compared to the high-end residential complexes in Cheongdam-dong used as benchmarks, the planned sales prices for Bentley Residence Seoul are on the high side. The price per 3.3 square meters based on exclusive floor area was reported as 175 million won for PH129, 191 million won for Eterno Cheongdam Phase 1, 270 million won for Eterno Cheongdam Phase 2, and 262 million won for Warner Cheongdam.
An industry insider stated, “While the LTV ratio itself is on the low side, it remains to be seen whether sales will proceed smoothly given that prices exceed 20 billion won per unit,” adding, “I understand that major lenders are taking a conservative approach to participation due to concerns about the project’s marketability.”