'Hannam 2 District with 1 Trillion Won Project Cost... Daewoo vs. Lotte Two-Way Competition Emerges'

Lotte Construction Paid Bid Deposit of 80 Billion KRW on the 19th
Daewoo Construction Scheduled to Pay Bid Deposit on the 23rd
Association to Hold General Meeting for Contractor Selection in November

Perspective view of Hannam 2 District, Yongsan-gu, Seoul [Provided by Seoul City]

[Asia Economy Reporter Cha Wanyong] The competition for the contractor of Hannam 2 District in Yongsan-gu, with a total project cost nearing 1 trillion KRW, has narrowed down to a two-way race between Daewoo Construction and Lotte Construction.

According to the maintenance industry on the 21st, Lotte Construction paid a bid deposit of 80 billion KRW (40 billion KRW in cash and 40 billion KRW in performance guarantee insurance) to the association on the 19th for the Hannam 2 District contractor bid, while Daewoo Construction plans to pay on the bid deadline, the 23rd.

The association plans to conclude the general meeting for contractor selection by November. Completion and move-in are expected between late 2027 and early 2028.

Hannam 2 District is a project to develop a complex of residential apartments and neighborhood living facilities on a site of 115,005㎡ in Bogwang-dong, Yongsan-gu, Seoul. It consists of 30 apartment buildings ranging from 6 basement floors to 14 above-ground floors, totaling 1,537 households (including 238 rental units). The construction cost is approximately 7.7 million KRW per 3.3㎡, with a total construction cost around 790 billion KRW.

Among the five redevelopment districts in Hannam, it is the second fastest in project progress after District 3. The general sale ratio reaches 45%, which is evaluated as having good profitability. Since being designated as a maintenance district in 2009, it obtained association establishment approval in 2012 and project implementation approval last November.

The association set a condition for a single bid. Accordingly, Daewoo Construction and Lotte Construction are known to propose their high-end brands ‘Summit’ and ‘Le L’ respectively, and have launched aggressive campaigns such as opening promotional offices early to secure the construction rights.

Initially, several major construction companies showed interest in the Hannam 2 District bidding besides Daewoo Construction and Lotte Construction. Samsung C&T, Hyundai Construction, GS Construction, and POSCO Construction also participated in the site briefing held on the 3rd of last month. However, they reportedly gave up bidding, judging that competition would be difficult as Daewoo Construction and Lotte Construction had been preparing for years.

In particular, Samsung C&T considered participation until recently but decided not to join, fearing it might conflict with the 'compliance management' emphasized by the Samsung Group Compliance Committee. Also, with Vice Chairman Lee Jae-yong’s promotion to chairman scheduled for November 1 and the unveiling of the new management vision ‘New Samsung,’ concerns about potential noise from an overheated promotional battle appear to have influenced the decision not to participate.

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