"Catch the Big Fish in the First Half: Maintenance Project Contract Battle"

Major Construction Firms Daewoo, Hyundai, Samsung Celebrate Early-Year Contract Wins
Housing Market Regulations Lead to 25.8% Drop in Supply Compared to Last Year
Intense Competition Expected in Busan Udong 1 District and Seoul Sillim 1 District

[Asia Economy Reporter Donghyun Choi] Major construction companies are beginning to actively secure their first redevelopment project contracts of the new year. With housing market regulations tightening and supply volumes steadily decreasing, competition for large-scale projects in the first half of this year is expected to intensify.

According to industry sources on the 13th, Daewoo Construction recently secured the construction rights for the redevelopment project of Sangye 2 District in Sangye-dong, Nowon-gu, Seoul, through a consortium with Dongbu Construction. The Sangye 2 District redevelopment project involves building approximately 2,200 apartment units on a 100,842㎡ site, with a construction cost of 477.6 billion KRW. This marks Daewoo Construction's second redevelopment project contract this year. Earlier, on the 4th, they independently won the construction rights for the redevelopment project of Heukseok 11 District (1,509 units) in Heukseok-dong, Dongjak-gu.

Hyundai Construction also opened the door to redevelopment project contracts this year by winning the remodeling project for Shinjeong Village 9 Complex apartments in Pungdeokcheon-dong, Suji-gu, Yongin. This project involves remodeling the existing 812 units into 914 units, with a construction cost of approximately 228 billion KRW. Samsung C&T Corporation also secured the Dogok Samho reconstruction project in Dogok-dong, Gangnam-gu, worth 91.5 billion KRW. Domestic major construction companies are already announcing redevelopment project contract wins for this year.

Since the government implemented various policies last year, including tax and loan regulations and the price ceiling system, the housing market supply is expected to shrink further this year. According to Zigbang, the nationwide planned supply for this year is 233,000 units, which is a 25.8% decrease compared to the 314,000 units initially projected at the beginning of last year. Under these circumstances, competition to secure large-scale redevelopment projects is likely to become fiercer than for smaller projects.

The first half of the year’s contract competition is expected to be led by provincial areas. The industry identifies Busan as the main battleground. At the site briefing held on the 7th by the U-dong 1 District association in Haeundae-gu, Busan, POSCO Construction, DL E&C (formerly Daelim Industrial), and GS Construction reportedly showed interest in bidding. The U-dong 1 District project involves reconstructing existing apartments into 1,476 units, with a project cost of about 500 billion KRW. Alongside this, the Dong-gu Jwacheon and Beomil District Integrated 2 Zone Urban Environment Improvement Project in Busan is also preparing to select a construction company. This project involves building 1,750 apartment units and officetels, with a project cost of approximately 500 billion KRW. The site briefing held on the 8th attracted as many as 17 companies, drawing attention.

In the metropolitan area, construction company selections will intensify in the first half of the year. The Shinlim 1 District in Gwanak-gu, Seoul, regarded as the largest project in the capital this year, is receiving the most attention. This project will redevelop the area into 3,961 apartment units and 100 officetel rooms. The Shinlim 1 District association selected Korea Land Trust as the project agent in November last year. A representative of the Shinlim 1 District association stated, "We plan to select a construction company around June." Currently, HDC Hyundai Development Company and GS Construction are showing interest in securing the contract. The integrated reconstruction of Gwacheon Jugong 8 and 9 Complexes in Burim-dong, Gwacheon, with 3,311 units, also plans to select a construction company in the first half of the year.

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