Competition Among Bangbae 15 District, Sinbanpo 4th Complex, Jamsil Woosung, etc.
Rush to Secure Supply in Gangnam Area... Increased Renovation Project Targets This Year
This year, a fierce competition among construction companies is expected over reconstruction projects in the Gangnam area of Seoul. Last year, the market was so sluggish that companies selectively bid only on maintenance projects, and this year is not expected to be easy either. However, due to the regional characteristics of Gangnam, where demand is concentrated, and housing supply instability, it is analyzed that companies are early securing pre-sale volumes in the Gangnam area, anticipating attention on prime location projects.
According to the maintenance industry on the 3rd, the Woosung Apartment Reconstruction Association in Jamsil-dong, Songpa-gu, Seoul, will hold an on-site briefing session at the association office within the complex on the same day. According to the construction company selection announcement issued by the association on February 24, the bidding period is until 2 p.m. on March 4. Construction companies intending to bid must submit a bid proposal along with a deposit of 60 billion KRW. Consortium bidding is not allowed. The total construction cost is approximately 1.7 trillion KRW. The construction company will be selected in April. The complex will be reconstructed with a maximum floor area ratio of 299.93%, consisting of 2,680 households (including 342 public housing units) from basement level 4 to a maximum of 49 floors above ground.
Promotion of Samsung C&T’s Raemian brand is in full swing around the complex. In the bidding for construction company selection held last September, only GS Engineering & Construction participated. Accordingly, a two-way competition between Samsung C&T and GS Engineering & Construction is expected. The complex is evaluated to have excellent location and business feasibility.
Shinbanpo 4th Complex in Jamwon-dong, Seocho-gu, is also moving quickly toward selecting a construction company. An on-site briefing session was held on the 20th of last month, and bidding closes on March 5. Six construction companies, including Samsung C&T, Daewoo Engineering & Construction, POSCO E&C, HDC Hyundai Development Company, Kumho Construction, and Jinheung Enterprise, participated in the briefing session. It is reported that all of them have submitted letters of intent to bid.
Shinbanpo 4th Complex will transform from the existing 13-story 1,212 households to a maximum of 49 floors above ground with a total of 1,826 households through reconstruction. The total construction cost exceeds 1 trillion KRW. Samsung C&T has shown great interest in this, drawing attention to whether the Banpo area can be filled with the 'Raemian' brand. Samsung C&T introduced 'Raemian Firstige' in Banpo in 2009, followed by 'Raemian One Bailey' and 'Raemian One Pentas' last year.
In Bangbae-dong, Seocho-gu, a fierce competition is expected over District 15. The submission of letters of intent for bidding for Bangbae District 15 was completed last month. Five companies, including Daewoo Engineering & Construction, Hyundai Engineering, POSCO E&C, HDC Hyundai Development Company, and Kumho Construction, have expressed their intention to participate in the project. The total construction cost is about 755.3 billion KRW. A construction company official said, "Bangbae-dong has many redevelopment projects and lower construction costs than Banpo-dong, but before apartments became dominant, it was a traditional affluent area with many high-end villas and a quiet environment. Last year, large construction companies’ high-end brand complexes such as Acro Ritz County and DH Bangbae, which completed reconstruction, were successful in pre-sales, maintaining interest in the remaining districts."
Construction companies are expected to enter maintenance projects more aggressively than last year. In the Gangnam area, Apgujeong 3 District in Apgujeong-dong is considered the largest project. A representative from a major construction company said, "We have set our maintenance project bidding target higher than last year," adding, "The association also seems reluctant to delay the project as the interest burden increases the longer the project is delayed."
Last year, amid rising construction costs and economic downturn, construction companies conducted selective bidding. Even in the Gangnam area, competitive bidding did not materialize, resulting in many private contracts. Representative complexes include Shinbanpo Hanshin 12th (Lotte Engineering & Construction), Shinbanpo Hanshin 27th (SK Ecoplant), Shinbanpo Hanshin 16th (Daewoo Engineering & Construction), Shinbanpo Hanshin 2nd (Hyundai Engineering & Construction), Woosung 4th in Jamsil-dong (DL E&C), Gaepo Jugong 5 Complex in Gaepo-dong, Gangnam-gu (Daewoo Engineering & Construction), Miryung in Garak-dong (POSCO E&C), Samik Mansion (Hyundai Engineering & Construction), and Samhwan Garak (GS Engineering & Construction).
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