Construction Costs Estimated at About 730 Billion Won... Top Builders Gather
"Winning Both 4th and 7th Complexes Is Unrealistic"... Preliminary Maneuvering Over the 7th Bid
Major construction companies are fiercely competing to win contracts for Gaepo Woosung 4th and 7th complexes, which are considered the final pieces of the reconstruction puzzle in the Gaepo Housing Development District. These are highly sought-after projects, with total construction costs reaching 1.4 trillion won. Some companies are even showing a strong determination to win both projects, intensifying the competitive atmosphere.
On May 28, the Gaepo Woosung 4th complex association announced that it had allowed construction companies to operate advance promotional booths for six weeks starting from April 21 to select a contractor. Samsung C&T, Lotte E&C, POSCO E&C, and HDC Hyundai Development Company have sequentially participated in the preliminary promotions. The association plans to issue a bidding notice at the end of this month and hold a site briefing next month.
Construction costs estimated at about 730 billion won...Top-tier builders gather
This complex is a nine-story apartment building with 459 units located in Gaepo-dong, Gangnam-gu. It is close to Maebong Station on Subway Line 3 and sits alongside Tower Palace by the Yangjaecheon Stream. Its proximity to the Daechi-dong private education district makes it one of the most desirable locations in Gangnam-gu. Additionally, 70% of the units have an exclusive area of 129 square meters or more, and the floor area ratio is only 145%, making the project highly profitable. The total construction cost is expected to be around 730 billion won.
On the 23rd, promotional banners of four construction companies were hung within the Gaepo Woosung 4th complex. Photo by Lee Jieun
Due to its outstanding profitability, major construction companies are eyeing the project. In particular, there is growing interest in whether Samsung C&T, which has achieved remarkable contract wins this year, will bid. Samsung C&T has expressed a strong intention to win the contract. For the 4th complex, the company plans to develop it as a key landmark in Dogok-dong, similar to Tower Palace. A Samsung C&T representative stated, "The 4th complex is a key landmark in Dogok-dong, and the 7th complex is the final piece in the Gaepo-dong reconstruction. Since these projects mark the pinnacle of Gaepo, we intend to actively participate in both."
POSCO E&C is also determined to win the contract. If successful, the company plans to introduce its high-end brand 'Otier' for the first time in the Gangnam area. It is also collaborating with the global architectural firm UNStudio and has even provided tax consultations at its promotional booth.
Some observers believe that because POSCO E&C is focusing its efforts on winning the Yongsan Maintenance Depot Zone 1 project, it may not be able to fully concentrate on the Gaepo Woosung projects. However, POSCO E&C maintains that its Gaepo Woosung and Yongsan business units operate separately, so it has sufficient capacity to pursue both. A POSCO E&C representative emphasized, "We are thoroughly identifying the unique characteristics of the 4th and 7th complexes and the wishes of their association members. Since these will be the first projects in Gangnam-gu to feature our high-end brand, we are preparing with great care."
Lotte E&C is also aiming to win both complexes by promoting its own high-end brand, 'LE-EL.' A Lotte E&C representative said, "Both the 4th and 7th complexes are projects we are closely monitoring." HDC Hyundai Development Company, which is competing with POSCO E&C for the Yongsan Maintenance Depot Zone 1 contract, is also actively seeking the contract for the 4th complex.
"Winning both 4th and 7th complexes is unrealistic"...Preliminary maneuvering over the 7th bid
However, industry insiders believe that the competitive landscape for the 4th complex contract needs to be watched further. This is because Samsung C&T, Lotte E&C, and POSCO E&C have all expressed their intention to win both the 4th and 7th complexes. Currently, the 7th complex is further along in the contractor selection process than the 4th. Some predict that, depending on their strategy of selection and focus, construction companies that choose to pursue the 7th complex may not participate in the bidding for the 4th. In other words, the outcome of the Gaepo Woosung 7th complex bid could change the competitive dynamics for the 4th complex.
For this reason, Daewoo E&C, which initially planned to set up a promotional booth for the 4th complex, decided to focus on the 7th complex instead. Daewoo E&C has been working on winning the 7th complex contract for a long time. If it succeeds, following its previous win at Gaepo Jugong 5th complex, Daewoo E&C will be able to further establish its 'Summit' brand in the Gaepo area. A Daewoo E&C representative stated, "After considering all aspects, including current business activities, we have decided that it is best to focus on the Gaepo Woosung 7th complex."
Currently, nine construction companies have expressed their intention to bid by attending the 7th complex site briefing. Of these, five companies (Samsung C&T, Daewoo E&C, Lotte E&C, POSCO E&C, and GS E&C) have already held preliminary briefings. The total construction cost proposed by the association is 677.8 billion won, and bidding will close on June 19. An industry insider commented, "Although the final decision rests with the association, it will be difficult for one company to win both complexes. A fierce psychological battle among construction companies is expected ahead of the Gaepo Woosung 7th complex bid."
The Gaepo Woosung 4th complex association is also closely watching the outcome of the 7th complex bid. An association representative stated, "We hope that the contractor who can maximize the benefits for our members will win the contract," adding, "We believe we will see the true intentions of the construction companies after the 7th complex bidding."
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