Bid Notice for Seongsu District 1 in August
GS, Hyundai, and HDC Compete in Three-Way Race
Business Potential Comparable to Gangnam
Villa Transactions Surge on Redevelopment Prospects
Cash-rich buyers are flocking to the Seongsu Strategic Maintenance Zone, considered the largest redevelopment site along the Han River in Seoul. Despite the implementation of strict lending regulations at the end of last month, a severe shortage of properties for sale is occurring. Villas eligible for allocation rights have surpassed 100 million won per pyeong. As the pace of the project accelerates, with each district moving quickly to select construction firms, expectations for redevelopment are rising as top-tier builders continue to express their intention to bid.
Lending Regulations Have Little Impact... Properties Sell Instantly When Listed
According to the maintenance industry on July 15, Seongsu Strategic Maintenance Zone District 1 will issue a bid notice as early as next month and complete the selection of a construction company within the year. As the competition to win the construction contract heats up, housing prices in the project area have been rising. In District 1, where the redevelopment process is progressing the fastest, properties are sold immediately upon listing.
On the 14th, old buildings lined the main roads around Seongsu 1 District in Seongdong-gu. Photo by Lee Jieun
According to real estate agencies in District 1, a 7-pyeong and a 12-pyeong villa land share were traded last month and this month for 2.5 billion won and 3 billion won, respectively. A 12-pyeong land share is large enough to receive a 34-pyeong unit after redevelopment. The head of a real estate agency in District 1 said, "There is a long line of investors eagerly waiting for properties in the 2 billion won range," but added, "Currently, you need at least 3 billion won to acquire a property in District 1, but even then, properties are so scarce that they rarely come on the market."
In particular, there is an extreme shortage of properties under 60 square meters of exclusive area, which are eligible for acquisition tax benefits when registered as rental housing businesses. He explained, "Properties that offer acquisition tax benefits through rental housing business registration are sold immediately upon listing," and added, "Even the 12-pyeong land share villa that sold for 3 billion won was traded on the very day the owner put it up for sale."
Local real estate agencies unanimously stated that, despite the recent financial regulations, investment demand continues to pour in. The head of a real estate agency in District 2 said, "You need at least 3 billion won to invest in this area, so investors who cannot raise funds due to the 600 million won mortgage loan limit do not even attempt to enter the market," and added, "Even now, there is a line of people waiting to snatch up properties in the 2 billion won range as soon as they appear."
Three-Way Competition in Seongsu District 1... Builders Focus on Districts 2 to 4
The competition for the District 1 contract has narrowed to a three-way race among GS Engineering & Construction, Hyundai Engineering & Construction, and HDC Hyundai Development Company. Last month, when the Seongsu District 1 association checked the intention to participate in bidding among the top 10 construction companies, these three expressed their intention to bid.
GS Engineering & Construction has been working for a long time to win the District 1 contract. The company has accumulated a strong track record in the Gangnam area, including the past Sinbanpo District 4 project, and considers Seongsu District 1 a strategic stronghold to further strengthen its competitiveness in the prime Han River area. GS Engineering & Construction plans to present a differentiated design by collaborating with world-renowned architectural firm David Chipperfield Architects. It will also work with global engineering company ARUP, which has experience in designing super high-rise landmarks, for technical cooperation.
On the 14th, old low-rise buildings stand in a row around Seongsu 2 District in Seongdong-gu. Photo by Lee Jieun
HDC Hyundai Development Company, which recently secured the Yongsan Maintenance Depot Zone 1 project, has proposed a similar development-oriented strategy for Seongsu District 1. The company differentiates itself by moving beyond simple construction to directly planning and managing the product. In the Yongsan Maintenance Depot bidding, HDC Hyundai Development Company won support from association members by proposing to connect the development of the underground space beneath Yongsan Station's front park and the former Railroad Hospital site, transforming the area into HDC Town. Hyundai Engineering & Construction is also not expected to easily give up the large-scale project worth over 2 trillion won. Hyundai Engineering & Construction is highlighting its high-end brand "THE H" and emphasizing a design that features views of Seoul Forest and the Han River.
District 1 boasts a prime location with access to both the Han River and Seoul Forest, as well as a large site area, offering business potential comparable to the Gangnam area. Since District 1 has the earliest bidding schedule among the four districts, winning this contract would provide a first-mover advantage that could lead to securing construction rights in the other districts. Expectations are also rising that, with the Seoul Metropolitan Government relaxing height restrictions along the Han River, a super high-rise landmark building up to 250 meters tall could be constructed.
For District 2, where a construction bid notice is expected in September, Samsung C&T, POSCO E&C, and DL E&C are showing keen interest. Initially, a head-to-head competition between POSCO and DL E&C was expected for District 2. However, with Samsung C&T approaching the area with a strategy to win contracts for Districts 2, 3, and 4 and develop the area into a "Raemian Brand Town," a three-way race has materialized. The construction cost per pyeong (3.3 square meters) in District 2 is estimated at about 11 million won.
An industry official explained, "The Seongsu Strategic Maintenance Zone is located along the Han River and has strong business potential, so it is safe to say that all construction companies are interested," and added, "Additionally, the characteristics of the Han River area allow for various specialized designs to be applied."
The Seongsu Strategic Maintenance Zone redevelopment project is a large-scale maintenance project building 55 apartment buildings with 9,428 units across four districts in Seongsu-dong 1-ga, Seongdong-gu. Among them, District 1 is considered the flagship. It has the largest scale and is adjacent to Seoul Forest and the Shinbundang Line. The estimated construction cost is 2 trillion won, and after redevelopment, it will feature approximately 3,014 apartment units and cultural and convenience facilities.
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