[Edaily Marketin KIM SUNG-SOO Reporter] The “Prima Hotel Site Mixed-Use Development Project” in Cheongdam-dong, Gangnam-gu, Seoul, is on the verge of transitioning to full-scale project financing (PF).

With the maturity date of the 700 billion won bridge loan approaching on the 22nd, the lead arrangers acting as the lending syndicate will deliberate this week on whether to convert the loan to project financing (PF). The financing structure for the Cheongdam-dong mixed-use development project is expected to be determined based on the outcome of this deliberation.

The site is located near “The Penthouse Cheongdam” (PH129), where actors Jang Dong-gun and Ko So-young reside. Furthermore, as it has been designated by the Seoul Metropolitan Government as a “site for a transit-oriented development project” and selected in the city’s design competition, it is expected to become a “landmark building” in Cheongdam-dong.

If approved, the main PF is scheduled to be drawn down on the 22nd

According to the real estate industry on the 16th, KB Securities, Samsung Securities, and NH Investment & Securities will each conduct a review on the 17th regarding the transition to

the main PF

for the Cheongdam Prima Hotel development project. If all three lead underwriters approve the proposal, the main PF will

be drawn down

on the 22nd.

Cheongdam

involves redeveloping the site of the existing Prima Hotel located at 52-3 Cheongdam-dong, Gangnam-gu, Seoul. After demolishing the existing hotel, a mixed-use complex combining a 5-star hotel with residential, office, and cultural facilities will be constructed.

The project developer is Shinsegae Cheongdam PFV. The largest shareholder is Shinsegae Property, which holds a 50% stake. As the project developer, Shinsegae Property oversees the entire project, from planning and strategy formulation to development.

In addition, Basic General Private Real Estate Investment Trust No. 1 holds a 44.99% stake in the PFV, while Mugunghwa Trust and Mirae Development 3 hold 5% and 0.01% stakes, respectively.

The new building will consist of 8 basement levels and 38 above-ground floors, with a total floor area of approximately 7,000 square meters. The building will house 74 rooms in a 5-star hotel, along with 29 residential units, 20 officetel units, neighborhood retail facilities, and cultural facilities.

Notably, Shinsegae Property will develop the hotel as “Aman Seoul” in partnership with the global luxury hotel brand Aman. Aman operates hotels in major cities worldwide, including Tokyo and New York, and has established a unique position in the ultra-luxury accommodation market.

Aman will be involved in all aspects of the project, including planning, design, and operations. Given that this mixed-use development combines a hotel, residential units, and office spaces in a prime location in Cheongdam-dong, the project itself holds significant symbolic value.

The project has already completed the permitting process and broken ground. Following approval by the Seoul Metropolitan Government’s architectural review committee in October of last year, it received a building permit in December of last year and began construction in April. Shinsegae Construction is handling the construction, with completion targeted for 2030.

Currently, a 700 billion won bridge loan is in place for the project, which matures on the 22nd. As a result, the maturity of the bridge loan and the schedule for conversion to the main project financing (PF) are effectively intertwined. This is why market attention is focused on the results of the lead underwriters’ review on the 17th.

Since the size of the main project financing can be adjusted prior to the first drawdown, the project operator plans to finalize the total amount after comprehensively reviewing factors such as the construction company, construction costs, and interest rates offered by the lending syndicate.

Positive Factors: GTX, Wirye-Sinsa Line, and Dongbu Arterial Road

This project site has been selected by the Seoul Metropolitan Government as a “target area for station area revitalization” and was also included in the city’s design competition, leading to expectations that it will become a “landmark building” in Cheongdam-dong.

In August 2024, the Seoul Metropolitan Government held the 8th Advisory Committee Meeting on Station Area Revitalization Projects and selected this area as a new project site. The plan includes introducing tourist accommodation facilities with a floor area ratio (FAR) of at least 50% to secure additional FAR incentives.

The project site (area: 4,730.6 m²) is considered to have an excellent location and significant development potential. It is about a 10-minute walk from Cheongdam Station on Subway Line 7 and an 8-minute walk from “The Penthouse Cheongdam” (PH129), an ultra-luxury residential complex, placing it directly adjacent to Cheongdam-dong’s core residential belt.

In particular, the area is considered to have high future value as major metropolitan transportation projects—including the development of the Samsung Station Intermodal Transit Center, the Wirye-Sinsa Line, and the undergrounding of the Dongbu Arterial Road—are planned in the vicinity, centered around Dosan-daero.

The Wirye-Sinsa Line is a 14.8-kilometer light rail line connecting Wirye New Town to Sinsa Station on Subway Line 3. The expedited preliminary feasibility study for the Wirye-Sinsa Line urban rail project was finally approved by the Financial Project Evaluation Committee of the Ministry of Planning and Budget on March 10.

Currently, the Wirye-Sinsa Line is in the basic planning stage. Once the basic plan is properly finalized and announced, the project will finally move on to on-site work, such as design and construction. In particular, discussions are underway regarding whether to build a new station, “Cheongdam Intersection Station,” on the Wirye-Sinsa Line.

Additionally, the Prima Hotel development site was selected in August 2023 for the Seoul Metropolitan Government’s “Urban and Architectural Creativity and Innovation Design Pilot Project” site competition. The exterior design, created through a collaboration between Hee Rim Architects & Engineers and ODA, was adopted.

When selected for the Seoul Metropolitan Government’s design competition, the city waives or relaxes various building regulations to allow for the construction of buildings with creative and original designs. For example, height restrictions may be waived, or the maximum floor area ratio may be relaxed to up to 1.2 times the limit set by the Enforcement Decree of the Act on the Planning and Utilization of National Land (National Land Planning Act).

In particular, a cultural and arts information platform and an art pop-up store will be established on the hotel’s lobby level as public contribution facilities. A multi-purpose cultural space where local artists, emerging artists, and young entrepreneurs can interact will also be included.