With this year's orders for urban renewal projects expected to hit a record high of 80 trillion won, construction companies have been winning their first contracts of the year one after another from the start. With major sites such as Apgujeong, Seongsu, and Yeouido set to choose builders this year, competition among builders is already heating up.
According to the urban renewal industry on the 21st, the first to announce an order win this year was POSCO E&C. Rather than a reconstruction or redevelopment, it was a remodeling project, and on the 10th the company secured the construction rights for the Munrae Hyundai 5th Apartment in Yeongdeungpo-gu, Seoul. The complex will be named "The Sharp Le Phelio," and the company is said to have won votes by presenting specialized designs for the exterior, landscaping, and community spaces. The apartment, currently 282 units in 2 underground and 18 above-ground floors, will be reborn through remodeling as a 324-unit complex with 6 underground and up to 24 above-ground floors.
On the 17th, Lotte Engineering & Construction also won the reconstruction project for the Garak Geukdong Apartment in Songpa-gu, Seoul. The project will build apartments and ancillary welfare facilities with 3 underground and 35 above-ground floors across 12 buildings and 999 units at 192 Garak-dong, Songpa-gu. The total construction cost is about 484 billion won. Lotte Engineering & Construction will apply its high-end brand "LEEL" to the rebuilt complex. It is the 16th business sites to bear the LEEL name.
The same day, Daewoo Engineering & Construction and Kolon Global each secured their first urban renewal orders of the year. Daewoo Engineering & Construction won the construction rights for the Sajik District 4 redevelopment project, considered the biggest urban renewal project in the Sajik-dong area of Busan. The project will build 1,730 dwelling units and ancillary welfare facilities across 11 buildings with 4 underground and 39 above-ground floors at 141-10 Sajik-dong. The contract is worth a total of 792.3 billion won, and the complex will be named "Prugio Graniel." Kolon Global won the reconstruction of the Hyundai 1st Apartment in Ansan, Gyeonggi Province. Through reconstruction, the apartment will be transformed into 673 units in buildings 3 underground and 35 above-ground floors tall.
With a record-sized bidding war for orders set to unfold this year, interest inside and outside the industry is growing. According to the urban renewal industry, the market size for urban renewal projects this year is projected at 80 trillion won, about 30 trillion won more than last year's roughly 50 trillion won in orders won by the top 10 builders by construction capacity. With more than 70 sites in Seoul alone expected to choose builders, the heat is intensifying.
The areas drawing the most attention are Apgujeong Districts 3, 4, and 5 in Apgujeong, Gangnam-gu, Seoul, home to the Apgujeong Apartments. Starting with District 4 at the end of this month, District 5 will move to select a builder in the first half, and District 3 in the second half. Major builders such as Samsung C&T, Hyundai Engineering & Construction, DL E&C, and GS Engineering & Construction are reportedly interested. District 2, which was last year's biggest urban renewal prize at about 2.7 trillion won, was awarded to Hyundai Engineering & Construction through a private contract.
Across the river in Gangbuk, the Seongsu Strategic Urban Renewal Zone redevelopment in Seongdong-gu stands out. All of Districts 1 through 4 plan to choose builders this year, with Districts 1 and 4 having issued bid notices in December. In addition, the Yeongdeungpo-gu Sibeom Apartment, currently the largest complex in Yeouido with 1,584 units, and the Mapo-gu Seongsan-Siyeong Apt. reconstruction, set to create 4,800 units, are expected to join the bidding race.
An industry official said, "These first wins at the beginning of the year feel less like a simple bid to pad results and more like a probing move ahead of bidding for major sites this year," but added, "That said, with construction costs and financing expense burdens continuing to grow, builders are taking a selective approach."