This year, a downturn in the construction industry is expected, but fierce bidding among large construction companies is anticipated for major establishments. In the first half, the focus will be on the redevelopment project in Apgujeong-dong, Gangnam-gu, while in the second half, the selection of constructors for the Seongsu Strategic Maintenance District in Seongdong-gu is approaching. Securing a luxury apartment complex by the Han River would provide an opportunity to solidify brand recognition.
According to the maintenance industry on the 13th, the large construction companies known as the 'Big 5'—Hyundai Engineering & Construction, Samsung C&T, GS Engineering and Construction, Daewoo E&C, and DL E&C—have begun formulating strategies internally to secure the construction rights for the second district of Apgujeong in the first half of this year. The second district of Apgujeong is the fastest among six districts undergoing redevelopment in the Apgujeong area.
The maintenance plan for the second district of Apgujeong passed the review of the Seoul City Urban Planning Committee in November of last year. The second district of Apgujeong was completed in 1982 and is celebrating its 42nd anniversary this year. It will be redeveloped into 12 buildings with a maximum height of 250 meters, comprising 2,606 units. The floor area ratio has been set at below 300%. The maximum number of stories has not yet been determined.
A representative of a large construction company noted, 'Apgujeong is regarded as one of the best residential areas in South Korea, so we naturally have to plant our flag there,' adding, 'Since the second district has the fastest business speed and good profitability, our principle is to do our best to secure the order.'
Initial expectations in the industry suggested that a fierce bidding war would take place this year over the third district of Apgujeong, regarded as the 'leader' in the area. The third district is undergoing redevelopment with plans for a maximum of 70 stories and 5,175 units, making it the largest in scope and centrally located in Apgujeong-dong, attracting the attention of large construction companies. However, because of its size, the interests involved are complicated, leading to a relatively slow pace of development. There are differing opinions among members regarding the donation of a public pedestrian bridge, and part of the land equity has been omitted from the registration, causing conflicts between the emergency response committee and the assembly.
Another representative of a large construction company stated, 'The third district of Apgujeong has the largest area adjacent to the Han River, making it highly regarded among redevelopment areas,' but added, 'The various complexes mixed together complicate interests due to differences in floor area ratios, which will likely slow down the project.' The third district is promoting a redevelopment project, integrating Hyundai's 1st to 7th phases and the 10th, 13th, and 14th phases, along with Daelim Villat.
These construction companies are aiming to secure orders in the Seongsu Strategic Maintenance District in the second half of this year. Districts 1 to 4 are plotted in a rectangular shape on the right side of Trimaje, where redevelopment projects are underway. The maintenance plan for the Seongsu Strategic Maintenance District 1 to 4 also passed the Seoul City review last November. Through redevelopment, it will transform into an apartment complex with a maximum height of 250 meters, a floor area ratio of 300% (500% in mixed-use areas), and 9,428 units (including 1,792 public rental units). Among these, the redevelopment assembly for District 4 has accelerated the project by selecting a consortium involving an overseas design firm through a member vote last July. The construction industry anticipates that District 4 may proceed with the selection of constructors in the second half of the year.
Recent interpretations suggest that the intense competition between Samsung C&T and Hyundai Engineering & Construction for the selection of a construction contractor for the redevelopment of the Hannam 4 district is a preliminary battle for securing major sites such as Apgujeong and Seongsu this year. The construction contractor for Hannam 4 district will be decided today, the 18th. Additionally, construction contractor selections for Yeouido Daekyo Apartments and Jamsil Woosung 1, 2, 3, and Gaepo Jugong 6, 7 complex are also expected to be possible within this year.
Ham Young-jin, head of real estate research at Woori Bank, stated, 'The redevelopment complexes in Apgujeong and the Seongsu Strategic Maintenance District are located by the Han River and have a rich demand for high-end residential spaces.' He added, 'Construction companies are also in positions where they can enhance their construction capabilities and brand values, predicting fierce competition among the top five construction companies in terms of construction capacity evaluation.'