Hyundai Engineering & Construction and POSCO E&C are fiercely competing for the top spot in urban renewal project orders this year. The outcome depends on whether POSCO E&C secures the reconstruction contract for Ansan Jungang Jugong Complex 6 in Ansan City, Gyeonggi Province, which will be announced on the 23rd.
If POSCO E&C succeeds in winning the contract, it will claim the title of number one in urban renewal project orders for the first time since its establishment. If it fails, Hyundai Engineering & Construction will become the top urban renewal construction company for the fifth consecutive year.
According to the construction industry on the 15th, POSCO E&C currently ranks first in orders for urban renewal projects, including redevelopment, reconstruction, remodeling, and public housing complex projects issued this year. It has secured 15 projects in total (7 redevelopment, 2 reconstruction, 6 remodeling), achieving order sales of 4.3158 trillion KRW.
Last year, POSCO E&C recorded 4.5892 trillion KRW in orders, ranking fifth behind Hyundai Engineering & Construction, GS Engineering & Construction, Daewoo Engineering & Construction, and DL E&C. Although it has achieved a similar order amount this year, the real estate market slowdown caused by high interest rates and soaring construction costs has led to a sharp decline in orders for other construction companies, creating an opportunity for POSCO E&C to rise to first place for the first time in history.
In second place is Hyundai Engineering & Construction, which secured 9 urban renewal projects (4 redevelopment, 2 reconstruction, 2 remodeling, 1 public housing project) with order sales of 3.7613 trillion KRW. Last year, Hyundai Engineering & Construction recorded 9.3395 trillion KRW in orders, maintaining the number one position in the urban renewal sector for four consecutive years. However, this year, due to the high interest rate trend and soaring construction costs, it has adopted a selective bidding strategy, resulting in a significant decrease in order sales.
However, Hyundai Engineering & Construction is expected to secure two private contracts by the end of this month: Choryang District 2 in Busan (valued at 420 billion KRW) and Pyeongchon Gojak Booyoung Apartments (valued at 270 billion KRW). If POSCO E&C does not secure additional orders, Hyundai Engineering & Construction could reclaim the top spot in urban renewal projects.
Given this situation, the construction industry's attention is focused on the outcome of the bidding for Ansan Jungang Jugong Complex 6 in Gyeonggi Province. Both POSCO E&C and Daewoo Engineering & Construction are participating in this project, which has a construction cost of 283 billion KRW. The first-place ranking will be decided based on whether POSCO E&C wins this contract.
Meanwhile, orders for urban renewal projects in the construction industry have significantly contracted this year due to high interest rates and soaring construction costs. As of this day, the top 10 construction companies have secured 50 urban renewal projects, a 55% decrease compared to 112 projects last year. Order sales have also plummeted by more than 60%, from 42 trillion KRW last year to 16 trillion KRW.
An official from a major construction company said, “With construction costs having risen so much, it is difficult to actively pursue urban renewal projects. The order environment is unlikely to improve next year either, so construction companies are expected to adopt an even more conservative approach to urban renewal projects.”
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