A KB Securities consortium was finally selected as the preferred bidder for the purchase of the Homeplus Yeongdeungpo store project, it said on April 28.

The consortium plans to set up a project financing investment vehicle (PFV) in May and complete procedures for signing the main contract and paying the deposit. It then plans to raise a bridge loan in July to secure ownership and develop apartments on the site after approval procedures such as changes to the district unit plan.

In this project, KB Securities decided to make a direct equity investment in line with the government's policy direction to improve the real estate project financing system. In real estate project financing, equity refers to the developer's own capital invested directly as part of total project costs, as distinct from loans, or debt.

The project is seen as having the advantage of a location with strong access to Yeouido and the Gangnam area, at a time when sites in central Seoul that can be developed into new apartments are scarce.

KB Securities expects the project to contribute to local housing stability by supplying new homes of about 500 households through the project.

A KB Securities official said it decided on a pre-emptive direct investment in a prime project site even as uncertainty continues in financial markets. The official said the bridge-loan funding planned for July is also expected to proceed smoothly, adding it would supply quality housing and take the lead in stabilising the real estate project financing market.