South Korea’s urban redevelopment contracts this year are expected to total about 80 trillion won. As major projects along Seoul’s Han River — including Apgujeong, Yeouido, Mok-dong and Seongsu — move into full swing, construction firms are escalating bids with aggressive financing packages and high-end designs.
According to the redevelopment industry on the 26th, Hyundai Engineering & Construction and DL E&C are locked in a fierce contest for the reconstruction of Apgujeong District 5 in Seoul’s Gangnam district.
Hyundai E&C is highlighting premium features, including AI-based services and a panorama design aimed at maximizing river views. DL E&C has focused on financing, offering a fixed construction cost of 11.39 million won per 3.3 square meters and relocation loans with a loan-to-value ratio of 150%.
The Seongsu area has also emerged as a key battleground. Seongsu District 4, seen as a centerpiece of new Han River redevelopment, is reshaping the competitive field through a re-bid. Daewoo E&C and Lotte Engineering & Construction have emphasized their funding capacity: Lotte offered relocation-loan support, while Daewoo proposed full responsibility for project financing and an interest rate set at 0.5 percentage points below the CD rate, a market benchmark.
Seongsu District 4, however, has seen repeated disputes during the bidding process. After last year’s bid was canceled over allegations of missing documents and violations of promotion guidelines, the re-bid has also drawn debate over interest-rate cap conditions.
Competition is also intense in Banpo. In the combined reconstruction of Sinbanpo complexes 19 and 25, Samsung C&T and POSCO E&C are vying for the contract. Samsung C&T has promoted an upscale strategy centered on building a “Raemian town,” while POSCO E&C has put forward a financing plan built around “zero member payments.”
POSCO E&C said it would eliminate members’ contributions by paying 200 million won per household in advance as financial support and then maximizing revenue from general sales through post-completion sales. A POSCO E&C official said a general meeting to select the builder is set for May 30, adding that the company is pursuing a strategy that puts maximizing members’ interests first.
The financing terms themselves are also drawing scrutiny. Critics say offers such as interest rates below the CD benchmark or relocation loans with 150% LTV could raise legal issues, tied to Article 132 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions. Interpretations differ over whether such terms amount to providing monetary benefits unrelated to construction work.
Seo Jin-hyeong, a professor in the Department of Real Estate Law and Administration at Kwangwoon University, said the support does not involve handing over cash directly, making it unclear whether it constitutes a benefit to members. “It can work as a favorable condition, but it could also become subject to legal judgment later,” he said.
Lee Eun-hyeong, a senior researcher at the Korea Construction Policy Research Institute, said areas drawing intense competition tend to have clear profitability or symbolic value, and builders generally present terms within bounds that avoid legal risk. He added that financial authorities could still raise concerns, but any decision would likely come after the fact, and that builders are pursuing an “all or nothing” strategy focused on core projects.
* This article has been translated by AI.
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