POSCO E&C has abandoned the Champions City development project it was to build in Gwangju Metropolitan City. As a result, the developers, including Shin Young, which took charge of implementation, and Daewoo E&C, the joint builder, are redrawing the construction plan for the project. POSCO E&C has seen frequent fatal accidents this year, prompting President Lee Jae-myung to order a review of sanctions, including license revocation.
Champions City is a project to complex-develop the Jeonbang and Ilshin Spinning sites in Im-dong, Buk District, Gwangju, with a total construction cost exceeding 1.2 trillion won. It is also close to Gwangju Shinsegae Department Store and Gwangju-Kia Champions Field, the home stadium of the Kia Tigers. It is also where Hyundai Department Store Group plans to open "The Hyundai Gwangju," the first in Gwangju.
Some say POSCO E&C, after fatal accidents and pressure from the government such as license revocation, took this opportunity to step back from the Champions City project. With unsold new homes piling up in the provinces, a large wave of unsold units could lead to the risk of not getting paid for construction costs.
A construction industry official on the 17th said, "Originally, Daewoo E&C and POSCO E&C, which were selected as the final preferred bidders in the builder tender, were in the process of discussing how to divide the consortium and proceed with construction, but POSCO E&C suddenly declared it would not participate in the project," and added, "As for the reason for not carrying out the construction, I understand it was not even conveyed to the developer." Another official said, "I understand the construction rights were recently given up," adding, "A major variable suddenly arose."
Regarding this, a POSCO E&C official said, "We withdrew because final agreement with the client was not reached during talks on the construction contract terms."
The Champions City development project aims to create a mixed-use complex of 4,315 households, including residential, office, and commercial facilities, on about 290,000 square meters of the Jeonbang and Ilshin Spinning site around 100-1 Im-dong, Buk District, Gwangju. It will be developed in two blocks: A1 block will consist of four buildings, 1,099 households from three basement floors to 49 stories above ground, and A2 block will consist of 14 buildings, 3,216 households from three basement floors to 49 stories above ground. A2 block was scheduled to break ground and go on sale next month and be completed in Jun. 2029, and A1 block was scheduled to break ground and go on sale in Aug. 2026 and be completed in Jun. 2030.
The implementation was undertaken by Humans Holdings 1st PFV (Humans PFV), a special purpose company (SPC) established by Shin Young and Umi Construction, and the total construction cost is about 1.2 trillion won.
To select a builder, a public tender was held on Apr. and Hyundai Engineering, Daewoo E&C, GS Engineering and Construction, and POSCO E&C submitted letters of intent to build. POSCO E&C and Daewoo E&C were selected as the final preferred bidders.
Hyundai Department Store Group is also participating in the Champions City development project. It plans to purchase 32,364 square meters of land from the developer and build "The Hyundai Gwangju," with eight floors above ground and six below (total floor area 274,079 square meters). At 1.5 times the size of "The Hyundai Yeouido" in Seoul, it will be the second-largest among domestic department stores after Shinsegae Centum City (total floor area 293,904 square meters). Hyundai Department Store Group plans to break ground next month.
The industry views the sudden relinquishment of construction rights for a landmark business site in Gwangju as unusual. Some also say that POSCO E&C, where four workers died this year and which faced strong rebukes from President Lee Jae-myung with even the possibility of license revocation mentioned, may have been influenced by this. POSCO E&C had a fatal accident at the Hamyang–Changnyeong Expressway site on Jul. 28, among four fatal accidents this year. On Aug. 6, President Lee Jae-myung ordered, "Find and report all legally possible measures such as revoking construction licenses and banning public tenders," and on Aug. 19, police and the Ministry of Employment and Labor raided the headquarters and other locations. POSCO E&C has temporarily suspended new orders for civil engineering projects such as roads, excluding its housing business.
A construction industry official said, "At the time of the Apr. tender, the contract terms had already been set, so it is hard to understand giving up construction on the eve of groundbreaking, saying the terms do not match," adding, "Given the recent industrial accident issues and government pressure, they may have felt burdened about starting a large project."
Another official said, "Considering the situation in metropolitan cities where large-scale unsold units are occurring, it is also possible they stepped back because they felt burdened taking on construction at a large business site in Gwangju."
According to the Korea Real Estate Board (REB), in the first half of this year (January to June), major metropolitan cities saw large-scale undersubscription for new apartments. Busan recorded a subscription shortfall rate of 77.7%, the highest, and Gwangju also recorded a subscription shortfall rate of 76%, the second-highest among the six major metropolitan cities after Busan.