"After Reviewing the Association's Bidding Requirements,
It Is Difficult to Present Our Prepared Proposals"
Association Sets Guidelines: Restriction on Alternative Designs,
Prohibition of Financial Techniques...
Focus Shifts to Gaepo Woosung 7th and Others;
Major Bids in Yeouido and Seongsu Planned for Second Half
Samsung C&T has decided not to participate in the bidding for Apgujeong District 2, which is considered the largest redevelopment project site of the year. A two-way competition with Hyundai Engineering & Construction was expected, following the case of Hannam District 4, but the early withdrawal of Samsung C&T has nullified the anticipated rivalry between the industry's first and second-ranked companies.
On June 20, Samsung C&T's construction division (hereafter Samsung C&T) announced that it had sent an official letter to the Apgujeong District 2 reconstruction association in Gangnam-gu, Seoul, stating its decision not to participate in the contractor selection bidding for this project.
Samsung C&T stated, "We designated Apgujeong District 2 as a strategic project site and have been actively preparing to participate in the bidding, aiming to build the best apartment complex that would instill pride in the association members and become a world-class landmark. However, after reviewing the association's bidding requirements, we determined that the unprecedented alternative design and financial restrictions prevent us from presenting the proposals we have prepared."
Samsung C&T added, "We respect the association's decision-making process and sincerely hope that this project proceeds as planned and is completed as a successful redevelopment. We also extend our heartfelt gratitude to the association members who have supported us."
Earlier this month, Samsung C&T opened the private lounge 'Apgujeong S.Lounge' across from the Apgujeong Apartments to actively communicate with association members and others. The company had been preparing an innovative alternative design in collaboration with the world-renowned architectural firm Foster+Partners. Samsung C&T also planned to offer optimal financial terms through partnerships with five major commercial banks and leading securities firms.
Samsung C&T declared its withdrawal after concluding that it would be difficult to meet the project requirements. Recently, the Apgujeong District 2 reconstruction association passed unusual bidding guidelines at a general meeting, which included: a significant restriction on the scope of alternative designs; requiring all interest rates to be proposed only in the form of CD plus spread; prohibiting proposals for relocation loans with LTV over 100%; prohibiting proposals for additional relocation loan interest rates; and prohibiting the use of other financial techniques.
Previously, Samsung C&T had considered participating in Jamsil Woosung 1, 2, and 3 but ultimately decided not to. Recently, Samsung C&T has been withdrawing from projects, even those it had actively reviewed, if bidding conditions favored competitors. At Gaepo Woosung 7th, the company proactively paid the bid deposit, and it plans to participate in the bidding for Gaepo Woosung 4th. This decision not to participate is also seen as taking into account upcoming bids for major redevelopment sites such as Yeouido Daegyo and Seongsu. As of June, Samsung C&T has secured 5.02 trillion won worth of redevelopment projects, achieving its annual target of 5 trillion won within just half a year.
A Samsung C&T representative stated, "While we respect the association's decision, we have determined that, under the current bidding guidelines, it is difficult to create a global landmark with world-class design and architecture as we envision. We will continue to actively engage with other associations in the Apgujeong area to realize a global residential masterpiece in the district."
The Apgujeong District 2 reconstruction project involves building a total of 14 buildings, ranging from 5 basement floors to 65 above-ground floors, with 2,571 apartment units and various welfare facilities, in the 434 Apgujeong-dong area of Gangnam-gu, Seoul. The association announced the contractor selection bidding on June 18 and will hold a site briefing on June 26. The deadline for submitting Apgujeong District 2 bid proposals is August 11. The construction cost is set at 2.7488 trillion won (excluding VAT), with a cost per pyeong (3.3㎡) set at 11.5 million won.
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