The order amount for maintenance projects (reconstruction and redevelopment) by construction companies has significantly increased this year. The order amount from eight major construction firms, including Samsung C&T and Hyundai E&C, in the first half of this year (January to June) has already surpassed last year's total order amount by over 4 trillion won. Unlike last year, when many conflicts over construction costs and declining profitability due to rising prices led to a lack of interest in securing maintenance projects, construction companies are now focusing on acquiring maintenance project orders. Additionally, the selection of contractors for large business sites, including Hannam New Town, is also ongoing, contributing to the increase in orders for construction companies.
In the second half, large-scale contractor selections worth trillions are scheduled in business sites such as Gaepo-dong and Apgujeong-dong in Gangnam District, Seoul, and Seongsu-dong in Seongdong District, leading to intensified competition among construction companies.
◇ In the first half, orders in the trillions continue with Hannam District 4 and others
According to the maintenance industry on the 25th, construction companies that have achieved over 5 trillion won in urban maintenance project orders in the first half of this year include Samsung C&T (construction division), Hyundai E&C, and POSCO E&C. Samsung C&T leads among major construction firms with 5.7213 trillion won in orders. This reflects an increase of 55.5% compared to last year's total order amount (3.6398 trillion won). Hyundai E&C (5.5357 trillion won) and POSCO E&C (5.0302 trillion won) also secured over 5 trillion won in orders in the first half.
Lotte Construction (2.9521 trillion won), DL E&C (2.683 trillion won), Hyundai Industrial Development (2.2262 trillion won), and GS Engineering and Construction (2.1949 trillion won) also achieved orders exceeding 2 trillion won. The combined order amount for the first half from eight construction companies, including Daewoo E&C (867.3 billion won), is 26.5107 trillion won, which is nearly 4 trillion won more than last year's total order amount (22.7987 trillion won).
In the first half, bids for construction rights at large business sites worth over 1 trillion won have continued. Starting with the 1.5695 trillion won redevelopment of Hannam District 4 (Samsung C&T) in January, the 1.2972 trillion won reconstruction of Bank Jeong Apartment in Seongnam (February, POSCO E&C), the 1.0310 trillion won reconstruction of Shinbanpo 4th in Seocho (March, Samsung C&T), the 1.1945 trillion won public redevelopment of Jangwi District 8 (April, Samsung C&T), and the 1.5138 trillion won construction project for Gaepo Jugong Complex 6 and 7 (May, Hyundai E&C) have all designated contractors. In June, Hyundai E&C obtained the construction rights for the redevelopment project in Sutaek-dong, Guri City, Gyeonggi Province, with the highest construction cost ever at 1.9648 trillion won for a single district redevelopment.
Song Seung-hyun, CEO of City and Economy, noted, "As construction costs increase, the order amounts for maintenance projects by construction companies have also risen, and as each maintenance business site in Seoul and the metropolitan area speeds up their projects, the orders for construction companies have increased."
◇ Expected fierce competition for the construction costs of 3.2 trillion won at Seongsu District 1 in August
In the second half, work for contractor selection will also proceed in business sites such as Gaepo-dong and Apgujeong-dong in Gangnam District, as well as Seongsu-dong in Seongdong District. The most highly anticipated area in the maintenance industry is Seongsu Strategic Maintenance District 1, considered the largest redevelopment project in the Han River belt. Major firms, including Hyundai E&C, GS Engineering and Construction, and HDC Hyundai Development Company, have shown intentions to bid.
A representative of the Seongsu Strategic Maintenance District 1 association said, "If all goes well, we plan to announce the contractor designation by the end of August and finalize the contractor within the year." The estimated project cost for Seongsu District 1 is 3.2 trillion won, with the construction cost estimated to be around 1.8 trillion won. This project involves developing a total of 3,014 households on approximately 230,000 square meters of land in Seongsu-dong 1-ga, Seoul, with an underground level of 5 and a maximum of 77 floors above ground.
Samsung C&T and Daewoo E&C have already participated in the bidding for the redevelopment of Gaepo Woosung 7 (construction cost 677.8 billion won), and the contractor will be selected in August. Additionally, the contractor for the redevelopment of Apgujeong District 2, with a total construction cost of 2.7488 trillion won, will be determined in September, with Hyundai E&C currently in a favorable position. Among the 14 complexes in Mokdong, Complex 6, which has the fastest redevelopment speed, plans to announce the contractor selection by the end of the year.
Sung Sohee, a real estate specialist at Shinhan Premier Pathfinder, stated, "The new government is sending a strong commitment to the market regarding the expansion of residential supply in the metropolitan area," adding, "Construction companies are expected to actively pursue orders in the second half as the maintenance projects centered around the metropolitan area become more active in line with this trend."