Ulsan B04 Redevelopment Fails Again, "Held Back by Unsold Units and PF"

No Construction Companies Paid Bid Deposit, Auction Failed
Top Industry Rivals Samsung C&T and Hyundai Construction Face Cancellation

A panoramic view of the area around 190-4, Gyodong, Jung-gu, the Ulsan B04 redevelopment zone.

[Asia Economy Reporter Cha Wanyong] The construction bidding for the redevelopment project in Ulsan Metropolitan City Jung-gu B04 district (around 190-4 Gyodong) ? the largest redevelopment project in the region ? has failed. Although it was initially expected that Samsung C&T and Hyundai Engineering & Construction, ranked first and second in construction capability evaluation, would participate in the bidding, both companies ultimately did not submit bids due to the recent real estate market downturn and difficulties in project financing (PF) loans.

According to the urban maintenance industry on the 2nd, by the deadline for the second bidding deposit payment on October 31, neither Samsung C&T nor Hyundai Engineering & Construction had paid the bid deposit of 30 billion KRW. As a result, the B04 district redevelopment project has been left without any bids for both the first bidding in August and the second bidding deadline.

The Ulsan B04 redevelopment involves redeveloping the area around 190-4 Gyodong, Jung-gu, to build 55 apartment buildings with 4,080 households (including 206 rental units) ranging from four basement floors to 29 above-ground floors. The expected project cost exceeds 2 trillion KRW, with construction costs alone estimated at 1.2 trillion KRW, making it the largest redevelopment project in the region. The project has been highly regarded for its profitability, with 2,946 units available for general sale excluding 1,134 units allocated to association members.

Both Samsung C&T and Hyundai Engineering & Construction had shown strong commitment to the project, deterring other construction companies from participating. Samsung C&T emphasized its preferred Raemian brand and specialized designs, while Hyundai Engineering & Construction proposed ‘The H’, Ulsan’s first premium residential brand, demonstrating their determination to secure the contract.

However, external factors hindered progress. Both companies faced difficulties in obtaining PF loans due to rising interest rates and the Legoland incident, combined with concerns over unsold units amid market stagnation, leading them to refrain from bidding. According to the Ministry of Land, Infrastructure and Transport, unsold housing units in Ulsan surged by 84% to 1,426 units in September compared to the previous month, marking the highest level in six years and four months since May 2016.

A Hyundai Engineering & Construction official stated, “Although the bidding proposal was completed, we decided not to participate due to the unfavorable market conditions. We will need to monitor the association’s schedule, conditions, and market situation going forward.”

A Samsung C&T representative said, “The association showed a strong intention for clean bidding, and we actively pursued participation, but internally we concluded that further review of the project’s feasibility was necessary.”

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