Major Construction Companies Compete for Gangnam Reconstruction Contracts

[Asia Economy Reporter Yoo In-ho] The competition for reconstruction contracts in the Gangnam area, which had stalled due to the COVID-19 pandemic, is heating up again.

In particular, major large construction companies are putting their lives on the line in securing contracts through selection and concentration, making it a showdown that cannot be backed down from.

According to the maintenance industry on the 16th, the Sinbanpo 15th Association in Banpo-dong, Seocho-gu, Seoul, will hold a joint contractor briefing session on the 20th, followed by a general meeting of the association on the 23rd to select a contractor.

Although the scale is small with 180 households, it has been regarded as a prime reconstruction project site with high business feasibility because it is a low-rise complex with five floors and consists only of medium to large units. The association plans to build a new apartment complex with 641 households in six buildings ranging from four basement floors to 35 above-ground floors. The competition has been narrowed down to a three-way battle among two large companies, Samsung C&T and Daelim Industrial, and a mid-sized company, Hoban Construction.

On the 13th, GS Engineering & Construction and POSCO Engineering & Construction participated in the bid for the Sinbanpo 21st reconstruction project in Jamwon-dong, Seocho-gu. Although many large construction companies initially showed interest, only these two companies ultimately participated in the final bid. Sinbanpo 21st will replace the existing two buildings with 108 households with two new buildings ranging from four basement floors to 20 above-ground floors, totaling 275 households.

The Banpo-dong Jugong 1st Complex 3rd District in Seocho-gu, considered the largest reconstruction contract competition in the Gangnam area in the first half of the year, is also a two-way battle between Samsung C&T and Daewoo Engineering & Construction. Daewoo Engineering & Construction was the first to confirm its bid by submitting the bid deposit and proposal to the association on the 9th. Daewoo Engineering & Construction proposed the new complex name "Trilliant Banpo."

To win the reconstruction project rights for Banpo 3rd District, Daewoo Engineering & Construction presented the association with a "reconstruction REIT project" card. According to Daewoo Engineering & Construction, this method involves utilizing the general sale portion of the reconstruction housing as a REIT to operate it as rental housing, and then selling it to the public after the operation period ends.

Samsung C&T also confirmed its participation in the bid the next day. Banpo 3rd District is a large-scale project with an existing complex size of 1,490 households and a new apartment construction of 2,091 households. The construction cost alone amounts to 808.7 billion KRW.

An industry insider said, "Large construction companies have been aggressively moving from the second quarter to recover their performance in the urban maintenance sector," adding, "With limited domestic new project orders and overseas orders due to COVID-19, the results of urban maintenance orders in the second quarter will have a significant impact on the order performance and profitability of large construction companies."

This content was produced with the assistance of AI translation services.