Sections 3, 4 and 5 in Apgujeong-dong, Gangnam-gu, Seoul—considered Korea's largest redevelopment site—are moving to select builders. With total project costs exceeding 10 trillion won and the area carrying the symbolism of being the "richest neighborhood in Korea," competition among construction companies is expected to be fierce.
According to the Seoul Metropolitan Government and others on the 6th, the Apgujeong Section 4 association issued a bid notice on the 4th to select a builder. The bid deadline is Mar. 30, and any construction company wishing to participate must pay a 100 billion won deposit within the period. The selection meeting is May 23. Section 4 will combine Hyundai 8th and Hanyang 3rd, 4th and 6th for redevelopment, building up to 69 stories with 1,772 homes.
Section 5 will issue a bid notice to select a builder on the 11th and will make a final selection on May 30. Section 5 will redevelop Hanyang 1st and 2nd into towers up to 70 stories with 1,401 homes. Construction costs are estimated at about 2 trillion won for Section 4 and in the 1 trillion won range for Section 5. Section 3, considered the biggest prize in the Apgujeong redevelopment, is expected to cost 7 trillion won in construction alone. Section 3 also plans to select a builder on May 30, the same day as Section 5, and will be transformed through redevelopment into towers up to 65 stories with 5,175 homes.
Samsung C&T, Hyundai Engineering & Construction and DL E&C are considering participating in the Section 4 bid. The most active is Samsung C&T. In May last year, it opened the S Lounge, a promotional center in Apgujeong-dong, and has been actively promoting the Raemian brand to association members. It also put up an ad at a bus stop near Apgujeong Section 4 that reads, "Only Apgujeong Samsung surpasses the Apgujeong of the past." For Section 5, DL E&C is actively pursuing the order, and GS Engineering & Construction is reportedly reviewing whether to participate. For Section 3, Hyundai Engineering & Construction, which won the Section 2 contract, has set its sights on it. The plan is to carry on the legacy of "Apgujeong Hyundai" and create a THE H (Hyundai Engineering & Construction's high-end brand) town.
Selecting a builder is an important event for association members, too. Home prices vary depending on which construction company's brand is chosen. Also, loan terms for project financing that banks offer the association differ by company credit rating, which directly affects construction costs, so interest is very high. A construction company official said, "Move-in is about five years away, but relocation loans are completely blocked, so many association members are also paying attention to the capacity for additional relocation loans separately supported by the builder," and added, "Because a higher construction company credit rating is necessary to provide payment guarantees, there is a preference for firms with strong financial soundness."
In the market, there is growing weight behind the outlook that, after redevelopment, Apgujeong apartment sale prices will surpass 3 billion won per 3.3 square meters (one pyeong). According to Real Estate R114, Apgujeong-dong's average sale price per pyeong last year was 140.68 million won. While prices vary by section, the most expensive per-pyeong sale price is 199.99 million won (Hyundai Building 65). An Apgujeong-dong real estate agent said, "People sell new apartments in Banpo and come to Apgujeong, which shows how symbolic it is as a wealthy neighborhood," adding, "Prices are currently suppressed by lending regulations, but after redevelopment, I think the sale price per pyeong will easily exceed 300 million won."