The bidding war for the Apgujeong District 5 reconstruction in Seoul is unfolding as an intense two-way race between Hyundai Engineering & Construction and DL E&C. Some analysts say the contest also dovetails with the business strategy of Hanwha construction division of Hanwha Co. (hereafter Hanwha Construction).
Although Hanwha Construction did not bid directly, it formed a partnership with Hyundai Engineering & Construction. The two companies agreed to pursue an integrated circulation plan connecting Apgujeong District 5 with Galleria Department Store and Apgujeong Rodeo Station on the Suin-Bundang Line. Hanwha plans to support the introduction of commercial facility operations, hotel-style concierge services, and premium food and beverage (F&B) facilities.
For Hanwha Construction, which has been shifting its focus to urban mixed-use development amid overseas business cuts and declining revenue, Apgujeong District 5 is a project with both symbolic value and business viability.
According to the construction industry on the 11th, Hanwha Construction has recently concentrated its capabilities on large urban mixed-use development projects such as the Seoul Station north station district, the Suseo Station transfer center, and the Jamsil MICE development. Rather than expanding scale through overseas plants and housing projects as in the past, it is restructuring its business around mixed-use development that includes development and operation. Industry watchers say it is putting more weight on strengthening its role as a developer than as a simple builder.
Apgujeong District 5 is also being pursued as a mixed-use development that goes beyond simple reconstruction to combine commercial, transportation, and distribution functions. For Hanwha Construction, which is restructuring its business around urban mixed-use development, the project offers a chance to secure both symbolic value and business viability in a core area of Seoul.
The current race for Apgujeong District 5 has Hyundai Engineering & Construction and DL E&C waging an all-out effort to win over co-op members' votes. Hyundai Engineering & Construction is touting its experience winning Apgujeong Districts 2 and 3 and the symbolic power of the "Apgujeong Hyundai" brand, while DL E&C is countering with a fixed-price construction cost structure, financial support, and a shorter project timeline. The general meeting to select the builder will be held on the 30th.
Behind Hanwha Construction's recent push for core mixed-use projects in Seoul such as Apgujeong District 5 are cuts in overseas business and a shrinking scale. In the past, Hanwha Construction drove growth on the back of the Bismayah New City project in Iraq and overseas plants. In 2023, it surpassed 5 trillion won in annual revenue, marking a peak. Since then, however, its global plant and offshore wind businesses have been transferred to other group affiliates, and observers say its direction has changed significantly.
In fact, Hanwha Construction's scale has visibly contracted recently. Last year's annual revenue was 2.7105 trillion won, down 27.6% from a year earlier. It once vied for a top-10 spot in the construction capability evaluation by leveraging overseas plants and large development projects, but it currently sits at No. 11.
A construction industry official said, "Recently, Hanwha Construction appears to be focusing on strengthening competitiveness in mixed-use development and securing stable earnings rather than aggressive scale expansion," adding, "Apgujeong District 5 combines symbolic value and business viability, so the outcome is something we have no choice but to watch closely."