Apgujeong, Seongsu, and Mok-dong Rush to Select Builders... Fierce Competition Among Construction Firms [Real Estate AtoZ]

Apgujeong District 4 and Mok-dong Complex 6 to Announce Tenders by Month-End
Construction Firms Scramble as Major Sites Begin Contractor Selection
Seongsu District 4 Sees Daewoo vs. Lotte, District 1 Likely GS vs. Hyundai Competition

As major redevelopment sites in Seoul, such as Apgujeong, Seongsu, and Mok-dong, simultaneously move to select construction companies, competition among builders has intensified. In the cases of Seongsu and Apgujeong, multiple construction firms are showing strong interest, increasing the likelihood of competitive bidding.

Apgujeong Hyundai Apartment. Photo by Hyunmin Kim kimhyun81@

Apgujeong, Mok-dong, and Seongsu Begin Selecting Construction Companies

According to the maintenance industry on January 15, Apgujeong District 4 is expected to announce a tender for construction companies at the end of this month. District 5 is also reportedly preparing to issue a tender notice for construction companies next month.

For District 4, where the total construction cost reaches 2 trillion won, Samsung C&T, Hyundai Engineering & Construction, and DL E&C are among the companies interested in winning the contract. District 5 has also attracted the attention of various major builders, but their participation will likely depend on the outcome of the District 4 tender. Major construction companies are conducting business activities in both districts and are developing bidding strategies that take into account the preferences of the associations and their members.

A local real estate agent commented, "There is no clear boundary between Districts 4 and 5, which could cause issues during construction," adding, "There is a possibility that the two districts may be pursued together as a single contract."

District 4 is a complex of 1,341 mid-to-large-sized units, consisting of Hyundai 8th Complex and Hanyang 3rd, 4th, and 6th Complexes. After reconstruction, it is expected to become a development of up to 69 stories and 1,664 units. District 5 consists of 1,232 units in Hanyang 1st and 2nd Complexes, and after reconstruction, it will be transformed into a development of up to 68 stories and 1,401 units, with a total construction cost estimated at 1.5 trillion won.

Yonhap News Agency

In Mok-dong, the fastest-moving site, Complex 6, is preparing to announce a construction tender on January 28. The association will hold a board meeting on January 23 to finalize the bidding conditions, including construction costs. DL E&C is actively persuading association members to win the contract.

In Mok-dong, six out of fourteen complexes have already established associations or designated project implementers, prompting each complex to hasten preparations for selecting construction companies. An industry insider noted, "As the new town complexes are proceeding with construction company selection around the same time, there is a sense that missing the right timing could slow down the project, intensifying competition," adding, "Builders are already dividing up which projects to pursue."

Seongsu Strategic Maintenance Zone District 4 Panorama

Since the end of last year, construction tenders have been announced in the Seongsu Strategic Maintenance Zone, and builders have begun to officially declare their participation. There is a possibility that competitive bidding will take place in more than two project sites. In District 4, which is progressing the fastest, a two-way race is expected between Daewoo Engineering & Construction and Lotte Engineering & Construction.

Daewoo Engineering & Construction plans to devote all its resources to securing the District 4 contract in the first half of this year, while Lotte Engineering & Construction has also announced its intention to participate in the bidding. The redevelopment of District 4 involves constructing 1,439 apartment units and ancillary facilities in buildings up to 65 stories above ground and six stories underground, with a total construction cost of 1.3628 trillion won. The bidding closes on February 9.

District 1, with a project cost of 2.154 trillion won, will close bidding on February 20. GS Engineering & Construction, under the "Beyond Seongsu" banner, is mobilizing all employees from its urban maintenance division for the bidding war. The company has proposed five-star hotel-level concierge services, new technology for reducing inter-floor noise, and AI-based smart home residential solutions.

Hyundai Engineering & Construction is expected to be GS Engineering & Construction's main competitor. At a site briefing held on December 30, Hyundai Engineering & Construction employees displayed banners expressing their determination to win the contract and made an impression on association members. If competitive bidding is achieved in this tender, the association will hold a general meeting to select the construction company at the end of April. District 1 involves building 3,014 apartment units and ancillary facilities in 17 buildings, with four basement levels and up to 69 stories above ground.

Should Project Timelines Be Delayed? Concerns Among Other Associations

As prime redevelopment sites in Seoul move forward with selecting construction companies, associations in areas with relatively less attractive business prospects are considering whether to postpone their selection process. A redevelopment committee chairperson in Seoul stated, "Some construction companies have explained that, due to the need to prepare for selections in Seongsu and Apgujeong, they may have to forgo business activities," adding, "There is concern that if we issue a tender notice during the period when many construction tenders are clustered in the first half of this year, construction companies may not show interest, so we are considering adjusting the timing of our tender notice."

Construction companies are also showing a tendency to prioritize profitability over aggressively competing for contracts. An industry insider said, "When competition intensifies in redevelopment projects, it inevitably leads to cutthroat competition, and during difficult times like these, a more conservative approach is unavoidable," adding, "Projects won through fierce competition can become financial burdens, and there are many cases where association issues prevent projects from proceeding as planned, so profitability has become even more important."