Banpo 3rd District Contract Battle Intensifies, Samsung and Daewoo Presidents Step In

[Asia Economy Reporter Yuri Kim] As the competition to secure the construction contract for the Banpo Jugong 1st Complex 3rd District (Banpo 3rd District) reconstruction project in Banpo-dong, Seocho-gu, Seoul intensifies, even the presidents of each construction company have stepped forward. Kim Hyung, President of Daewoo E&C, and Lee Young-ho, President of Samsung C&T Construction Division, personally visited the site of the first joint briefing session for Banpo 3rd District held on the 19th, showing strong determination to win the project.

At the first joint briefing session for Banpo 3rd District held on the afternoon of the 19th at Eluce Convention Wedding Hall in Banpo-dong, Seocho-gu, Daewoo E&C, which received construction company number 1, presented first, followed by Samsung C&T, which was assigned number 2.

Kim Hyung, President of Daewoo E&C, appeared on site after screening a promotional video lasting about 40 minutes and emphasized, "Banpo 3rd District is a very important project for Daewoo E&C's future," adding, "We will build a new landmark that will be talked about for 100 years." He promised, "We will adhere to the contents of the bid proposal and contract and proceed with the project swiftly. We will return the highest development profits to the union members. As the representative, I will personally oversee even the smallest issues during the project period," pledging the successful completion of the reconstruction project. Earlier, on the 13th, President Kim also visited the Banpo 3rd District union office and met with union officials including Chairman Noh Sa-shin to express his determination to win the contract.

Lee Young-ho, President of Samsung C&T, also showed confidence in winning the project in front of the union members. He emphasized, "Raemian has been the number one apartment brand for 22 consecutive years," and added, "We have put all our sincerity and attention into the Banpo 3rd District Raemian project." He continued, "With Raemian's excellent quality, technology, service, exterior, landscaping, Internet of Things (IoT), and eco-friendly technology, we will create a truly livable home and a valuable luxury complex," promising to "strictly adhere to the project schedule, including the move-in date, through thorough project preparation."

At the joint briefing session, Daewoo E&C proposed pre-sale, post-sale, and sale of general sale units through a REITs (Real Estate Investment Trust) model. However, they explained that the REITs plan would be finalized through additional consultations with the Seoul Metropolitan Government, which had previously expressed opposition. Construction is scheduled to start in March 2022, with a construction period of 36 months after commencement. The project cost of 780 billion KRW is expected to be financed at a fixed interest rate of 0.9% per annum, with the remaining project costs procured at about 2.5% per annum. For relocation costs, if union members take individual loans, the interest on the loans will be supported with 220 billion KRW from the project activation fund.

Samsung C&T proposed "100% post-completion sale." They explained that choosing this method would increase sales revenue by about 250 billion KRW due to the rise in official land prices. They also emphasized rapid project progress, planning to complete the period from contractor selection to construction start within 12 months. They plan to start construction in May next year and reduce the construction period to 34 months, cutting project interest costs by 12 billion KRW. Based on a high credit rating (AA+), they explained that project costs could be loaned at an annual interest rate of 1.8-1.9%, which is 0.25 percentage points above Samsung C&T’s corporate bond rate (AA rating), up to a maximum of 3 trillion KRW.

Daewoo E&C and Samsung C&T plan to officially open their promotional centers within the Banpo Jugong 1st Complex on the 20th and actively carry out promotional activities. The contractor selection general meeting will be held on the 30th at COEX in Samseong-dong.

The Banpo 3rd District reconstruction project involves rebuilding the area of 1109 Banpo-dong, Seocho-gu, Seoul, into 17 buildings ranging from three basement floors to 25 above-ground floors, with 2,091 households. The total estimated construction cost is 808.7 billion KRW, making it the largest reconstruction project in the market in the first half of this year.

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