Gaepo Reconstruction Latecomer, On-site Briefing on the 20th
Association Proposes Construction Cost of 8.4 Million KRW per 3.3㎡
Posco E&C Expresses Active Intention to Bid
Samsung C&T, Daewoo E&C, GS E&C Under Review
The construction company selection process has begun at Gaepo Jugong 5 Complex, considered a latecomer among the reconstruction projects in Gaepo-dong, Gangnam, Seoul. Posco E&C is showing the most active intention to win the contract, while Samsung C&T, GS Engineering & Construction, and Daewoo Engineering & Construction are also exploring whether to participate in the bidding.
The Gaepo Jugong 5 Complex Reconstruction Maintenance Project Association announced on the 15th that it has issued a bidding notice for the construction company selection and will hold a site briefing session on the 20th. The deadline for submitting bids is April 5. A bid deposit of 30 billion KRW (in cash) must be paid to participate in the bidding. The construction cost proposed by the Gaepo Jugong 5 Complex Association is 8.4 million KRW per pyeong (3.3㎡), with a total construction cost of 697 billion KRW. A letter of commitment to participate in the bidding must be submitted within 7 days, and joint bidding (consortium) is not allowed.
Major construction companies are expected to participate in large numbers at the site briefing session. Posco E&C has expressed a strong intention to actively participate in winning the contract. A Posco E&C official stated, "We will repay the trust of the association members with the best products and business conditions." Samsung C&T, GS Engineering & Construction, and Daewoo Engineering & Construction are also reviewing their participation in the bidding.
A Samsung C&T official said, "We are internally reviewing the bidding announcement and details and will decide whether to participate after understanding the bidding conditions." A Daewoo Engineering & Construction official explained, "We are positively considering participation." The reconstruction projects of Gaepo Jugong Complexes 1 to 4 were completed with Hyundai Engineering & Construction, Samsung C&T, and GS Engineering & Construction selected as construction companies.
There is expected to be intense strategic maneuvering until the actual bidding. Recently, due to the sharp rise in raw material and labor costs, construction companies are showing caution in bidding for maintenance projects. In the case of Noryangjin 1 District, which proposed a bid deposit of 50 billion KRW and a construction cost of 7.3 million KRW per pyeong, the construction company was selected after a re-bid. No construction companies participated in the first bidding held in November last year, but only Posco E&C participated in the second bidding held on the 13th of this month.
Gaepo Jugong 5 Complex is a project to build a total of 14 buildings, ranging from 4 basement floors to 35 above-ground floors, with 1,279 households, completed in 1983. If the construction company bidding is completed as scheduled, a general meeting for the selection of the construction company will be held in May, with plans to receive management disposition approval in early 2025.
The 54㎡ units in Gaepo Jugong 5 Complex were traded at 2.15 billion KRW in mid-January and 1.9 billion KRW in December last year. For the 74㎡ units, listings are available in the range of 2.5 to 2.6 billion KRW. The Gaepo-dong area was once lined with low-rise apartments centered on small-sized units but is emerging as a new affluent neighborhood after reconstruction. Raemian Blestige (Complex 2) moved in February 2019, and The H Honor Hills (Complex 3) in August of the same year. Gaepo Xi Residence (Complex 4) moved in February last year, and The H Firstier I-Park (Complex 1) moved in January this year. Gaepo Jugong Complexes 6 and 7 are undergoing integrated reconstruction. They aim to apply for project implementation approval in March.
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