Aegis Asset Management's Sindorim D-Cube City remodeling project begins construction mid-month after securing 490 billion won in project financing, with a target completion date of July next year. The project overcame an Event of Default (EOD) crisis earlier this year through successful refinancing negotiations that extended loan terms to May 19 and ultimately secured new funding in May. The remodeling converts the former Hyundai Department Store space at 662 Gyeongin-ro, Guro-gu, Seoul into a mixed-use complex combining commercial facilities and office space, addressing vacancy issues created by the department store's withdrawal while enhancing asset competitiveness at the site directly in front of Sindorim Station — a planned hub for the GTX-B line scheduled to open in August 2031.
Aegis Asset Management Converts Former Hyundai Department Store into Mixed-Use Office Complex
The project transforms the former Hyundai Department Store location within Sindorim D-Cube City into a facility combining commercial and office functions. According to financial investment industry sources on the 13th, Aegis Asset Management plans to begin remodeling construction mid-month with completion targeted for July next year. The remodeled building will operate commercial facilities on lower floors (basement 2F to ground 1F, partial ground 2F), the annex building, and ground 6F. The initial plan to create Shinsegae Group's urban shopping mall brand 'Starfield Village' on basement 2F to ground 1F became difficult to implement due to resident requests for increased retail facility ratios and restrictions on exterior modifications. Floors 3-5 will be converted to office use, strengthening office functionality. The original plan designated floors 2-6 as office space, but resident demands for more retail facilities reduced the office proportion.
The new office facilities will be built in 'ground scraper' format. 'Ground scraper' refers to horizontally expansive office space. In contrast to 'sky scrapers' where people are separated on different floors in tall buildings, ground scrapers utilize wide floor areas to maximize work efficiency and collaboration. The exclusive area per office floor at D-Cube City reaches approximately 4,600㎡ (approximately 1,400 pyeong). Upon remodeling completion, the space will provide global-standard office facilities accommodating over 300 workers per floor. The building's official name has not been finalized. However, it is tentatively called 'Timewalk West,' applying Aegis Asset Management's office brand 'Timewalk.'
Sindorim Station Location Positioned for GTX-B Line Opening in August 2031
Timewalk West is located directly in front of Sindorim Station. Sindorim Station serves as a transfer station for subway lines 1 and 2 and is a regional transportation hub where the Greater Seoul Area Express Railway (GTX)-B line is scheduled to open. The location possesses abundant residential and business demand in its catchment area. The GTX-B line began construction in the first half of last year with main construction progressing toward an opening target of August 2031. When GTX-B opens, travel time from Songdo International City to Sindorim will be reduced to approximately 15 minutes. Sindorim will be able to absorb tenant demand from biotechnology, tech, and advanced technology companies located in Songdo. Additionally, development of Seoul Station and Yongsan International Business District is expected to form a business district belt connecting Seoul Station, Yongsan, Yeouido, and Sindorim.
Aegis Secures 490 Billion Won Project Financing After Overcoming EOD Crisis
The Sindorim D-Cube City mixed-use facility remodeling project is led by Timewalk West Corporate Restructuring Real Estate Investment Trust (REIT). The REIT's investor is Aegis General Private Real Estate Investment Trust No. 468-2, which holds 76.7% common shares and 23.3% convertible preferred shares. The REIT owns 6,234㎡ and its above-ground buildings at 692 Sindorim-dong, Guro-gu, Seoul. The REIT has signed an asset management contract with Aegis Asset Management to invest and operate assets through real estate acquisition, management, improvement and disposal, real estate development and leasing, distributing profits to shareholders.
The project faced difficulties early this year. High interest rates and real estate financial market contraction delayed refinancing, raising EOD concerns. The REIT disclosed on February 20 that an Event of Default financial incident occurred on the Sindorim D-Cube City mixed-use facility collateral loan. Refinancing was not completed by the existing loan maturity date of February 19, resulting in failure to repay loan principal and interest. Market concerns about potential project delays were considerable at the time. However, the REIT subsequently reached agreement with lenders to extend the loan term to May 19. The REIT pursued new funding arrangements using priority beneficiary rights as collateral to repay existing loan principal and interest and secure essential project costs, ultimately succeeding in arranging the main PF and normalizing the project.
Under the loan agreement signed in May, the REIT secured PF loans totaling 490 billion won from multiple financial institutions. The maturity is January 19, 2028. The loan structure consists of Tranche A commitment amount 356 billion won, Tranche B commitment amount 120 billion won, and Tranche C commitment amount 14 billion won. Repayment priority is also set in order of Tranche A, Tranche B, Tranche C. Special Purpose Company (SPC) Heo Sam Sindorim No. 1 participated as Tranche A lender and executed an 83 billion won loan. Asset-backed securities are being issued based on this loan. To enhance repayment capacity of the asset-backed securities, Heo Sam Sindorim No. 1 signed a 'Commitment Letter Regarding Private Bond Underwriting and Loan Receivable Purchase' with Samsung Securities in May.
Industry observers view this project as a turning point that will restore competitiveness of D-Cube City, a representative mixed-use facility in southwestern Seoul, beyond simple remodeling. The possibility of becoming a representative case of converting large retail vacancies into office space has been raised. Particularly, Sindorim Station has high potential to emerge as a key hub for Greater Seoul Area transportation when the GTX-B line opens. A financial investment industry official stated, "With PF procurement completed, project uncertainty has been substantially resolved," adding, "When reborn as a mixed asset combining commercial facilities and offices, rental competitiveness and asset value are expected to rise significantly."
FAQ
Q: What is the construction timeline for the Sindorim D-Cube City remodeling project?
A: According to financial investment industry sources on the 13th, Aegis Asset Management plans to begin construction mid-month with a target completion date of July next year.
Q: How did Aegis Asset Management resolve the Event of Default crisis?
A: The REIT reached agreement with lenders to extend the loan term to May 19 after the original February 19 maturity passed. In May, the REIT secured 490 billion won in new project financing from multiple financial institutions with a maturity of January 19, 2028, consisting of Tranche A (356 billion won), Tranche B (120 billion won), and Tranche C (14 billion won).
Q: When is the GTX-B line scheduled to open at Sindorim Station?
A: The GTX-B line began construction in the first half of last year with main construction progressing toward an opening target of August 2031.
