Shinbanpo 21st Complex Acquired by POSCO E&C... Remaining Banpo 3rd District and Hannam 3rd District 'In Focus'

[Asia Economy Reporter Kim Yuri] Following the awarding of the construction rights for the prime reconstruction project Shinbanpo 21st Complex in Gangnam, Seoul, to POSCO Engineering & Construction, the construction rights for Banpo Jugogu 3rd Complex worth 800 billion KRW will be decided on the 30th, and for Hannam 3rd District worth 1.8 trillion KRW on the 21st of next month. The outcome of these construction rights is expected to determine the success or failure of this year's redevelopment projects.

According to the redevelopment industry on the 29th, the Banpo Jugogu 3rd Complex union will hold a selection meeting on the 30th at the Grand Ballroom on the 1st floor of COEX in Samseong-dong, Seoul, to choose between Samsung C&T Corporation and Daewoo Engineering & Construction as the contractor. The Banpo Jugogu 3rd Complex reconstruction project involves rebuilding a complex in Banpobon-dong, Seocho-gu, consisting of 35 buildings and 1,490 households into 17 buildings with 2,091 households, ranging from 3 basement floors to 35 floors above ground. With construction costs reaching 800 billion KRW and the brand premium associated with the symbolic value of Banpo Jugogu 3rd Complex, there is high interest from the construction and redevelopment sectors. This is why Samsung C&T and Daewoo E&C are fiercely competing.

Both companies are aiming to win the contract with differentiated strategies. Samsung C&T emphasizes a post-sale and rapid progress, including applying for management disposition approval within three months after signing the construction contract. They also highlight a construction period shortened by more than a year compared to competitors (within 34 months), which reduces financial costs for union members. Daewoo E&C proposed a pre-sale and post-sale selection system. They also offered a groundbreaking condition of financing the project at an interest rate of 0.9%. They have also proposed REITs investment for general sales and sale after leasing, but they must overcome regulatory hurdles from the Ministry of Land, Infrastructure and Transport and the Seoul Metropolitan Government.

The Hannam 3rd District, called the "largest redevelopment project since the founding of Korea," will hold its contractor selection meeting on the 21st of next month. With a total project cost reaching 7 trillion KRW, it is this year's "largest redevelopment project." Hyundai Engineering & Construction was assigned number 1, Daelim Industrial number 2, and GS Engineering & Construction number 3. The Hannam 3rd District redevelopment project is a plan to build 197 buildings with 5,816 households in the area of 686 Hannam-dong, Yongsan-gu, ranging from 6 basement floors to 22 floors above ground, with a total project cost of 7 trillion KRW and construction costs of 1.888 trillion KRW.

Meanwhile, POSCO Engineering & Construction was selected as the contractor for the Shinbanpo 21st Complex reconstruction project the day before. Shinbanpo 21st Complex, consisting of two buildings with 108 households, will be transformed through reconstruction into two buildings with a total of 275 households, ranging from 4 basement floors to 20 floors above ground.