Gaepo Useong 7th Contractor to Be Chosen on the 23rd
First Face-Off Between Samsung C&T and Daewoo E&C Since 2020
Industry Eyes Impact on Seongsu Strategic Maintenance Zone Bids in Second Half
The selection results for the contractor of Gaepo Useong 7th, a prime reconstruction site in Gangnam-gu, Seoul with a project cost reaching 680 billion won, will be announced in two days. The outcome of this bid is drawing significant attention from the industry, as it could influence the selection of contractors for other large-scale projects in the future, such as the Seongsu Strategic Maintenance Area redevelopment project.
According to the maintenance industry on August 21, the reconstruction association for Gaepo Useong 7th will hold a general meeting on the 23rd to decide on the contractor. Gaepo Useong 7th, completed in 1987, currently consists of 802 units across 15 floors. Upon completion of the reconstruction, it will be transformed into a complex with up to 35 floors and 1,122 units. The project cost is approximately 677.8 billion won.
In the bidding war for Gaepo Useong 7th, Samsung C&T and Daewoo E&C are competing. At a preliminary briefing held in March, Samsung C&T, Daewoo E&C, Lotte E&C, POSCO E&C, and GS E&C participated. However, only Samsung C&T and Daewoo E&C submitted bids for the contractor selection.
Samsung C&T has proposed the name "Raemian Lumiwon" for the complex and is promoting quality as its main selling point to association members. The company utilizes a quality management platform to subdivide checklists for each construction process and implements a quality accountability system to ensure responsible construction and maintain inspection records. Samsung C&T also conducts quality demonstration events to pre-verify major processes such as waterproofing and insulation. It plans to conduct a full inspection of finishing materials, directly checking production processes at domestic and international sites. After move-in, a dedicated after-sales service will be provided for three years, along with activities to predict and prevent customer inconveniences in advance.
In collaboration with the global design firm Arcadis, Samsung C&T will apply a curved exterior design and install specialized community facilities such as a sky lounge. The construction cost is set at 8.689 million won per 3.3 square meters, totaling approximately 675.7 billion won, which is lower than the association's estimated price. The proposed construction period is 43 months. Samsung C&T is also sharing the average sales prices of Raemian-branded apartments with association members to bolster its bid. Although Samsung C&T did not participate in the bids for nearby reconstruction projects such as Gaepo Jugong 6th and 7th complexes, it has considered Gaepo Useong 7th as a key target. Due to the high preference for the Raemian brand among association members and the increased likelihood of being selected if participating, Samsung C&T decided to join the bid.
Daewoo E&C, which has been preparing for this bid from early on, proposed the name "Summit Pranity" for the complex. In addition, French architect Jean-Michel Wilmotte, who designed the Louvre Museum and the Elysee Palace, will collaborate with landscaping specialist Byron for the landscaping work. Daewoo E&C will also be the first to apply a smart silent floor system to reduce both lightweight and heavyweight impact noise.
Notably, Daewoo E&C submitted a completion guarantee to the association, pledging that construction will not be suspended under any circumstances except for force majeure events such as natural disasters or war, and that the completion deadline will be strictly observed. If Daewoo E&C fails to fulfill this guarantee, the company will compensate not only for the delay damages or indemnities stipulated in the contract but also for financial costs. Although the association made the submission of such a guarantee optional, Daewoo E&C provided it to alleviate concerns about increased member contributions due to potential construction cost hikes.
Daewoo E&C also offered one of the lowest mandatory project loan interest rates in the maintenance business and proposed a financial benefit allowing association members to defer their contributions for up to six years.
This clash between Samsung C&T and Daewoo E&C marks their first direct competition in five years since the Banpo Jugong Complex 1, District 3 (Banpo 3 District) project in Seocho-gu, Seoul, in 2020. At that time, Samsung C&T was selected as the contractor with 52% support from association members, thanks to its stable financing capabilities and a promise to sell 100% of units only after construction was completed.
Both companies are making every effort in this rematch, as the outcome is expected to influence contractor selections for other major core projects. In the second half of this year, the redevelopment of Seongsu Strategic Maintenance Area Districts 1 to 4, considered the largest maintenance project, will begin in earnest. The project cost for each district is estimated at around 2 trillion won. In District 1, where contractor selection will be finalized in November, Hyundai E&C, GS E&C, and HDC Hyundai Development Company are competing. For District 2, where contractor selection is scheduled for December, Samsung C&T, DL E&C, and POSCO E&C are expected to participate. Samsung C&T and Daewoo E&C are likely to compete in District 3, while Samsung C&T and Hyundai E&C are expected to participate in District 4.
An industry insider explained, "A victory in the Gangnam reconstruction bid will naturally boost influence in Seongsu, which is considered a quasi-Gangnam area. The outcome at Gaepo Useong 7th is expected to directly impact participation and strategies for the Seongsu Strategic Maintenance Area projects as well."
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