The volume of urban redevelopment contracts this year is expected to reach about 80 trillion won. As projects move ahead in key Han River locations — often grouped as “Apyeomokseong” — builders are escalating bid battles with aggressive financing terms and high-end designs.
According to the redevelopment industry on Thursday, Hyundai Engineering & Construction and DL E&C are facing off in the reconstruction project for Apgujeong District 5 in Seoul’s Gangnam Ward.
Hyundai E&C is promoting a luxury complex with AI-based services and a panoramic design aimed at maximizing Han River views. DL E&C is betting on financing, confirming construction costs at 11.39 million won per 3.3 square meters and offering relocation loans with a 150% loan-to-value ratio.
Seongsu is also emerging as a major battleground. Seongsu District 4, seen as a centerpiece of new riverfront redevelopment, has moved to reshape competition through a rebid. Daewoo E&C and Lotte Engineering & Construction highlighted 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.
But Seongsu District 4 has also seen repeated disputes during bidding. After last year’s bid was canceled over a missing-document controversy and alleged violations of promotion guidelines, arguments have continued in the rebid process over limits on interest-rate terms.
Competition is also intense in Banpo. In the combined reconstruction of Shinbanpo complexes 19 and 25, Samsung C&T and POSCO E&C are competing for the contract. Samsung C&T is pitching an upscale strategy centered on building a “Raemian town,” while POSCO E&C has proposed financial support built around “zero contributions.”
POSCO E&C said it would eliminate members’ contributions by paying 200 million won per household in financial support upfront and maximizing revenue from general sales through post-completion sales. A POSCO E&C official said a general meeting to select the builder is scheduled for May 30 and that the company is pursuing a strategy focused on maximizing members’ interests.
Controversy is also growing over the financing terms themselves. 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 Urban and Residential Environment Improvement Act. Interpretations differ over whether such terms amount to providing monetary benefits unrelated to construction work.
Seo Jin-hyung, a professor in the Department of Real Estate Legal Affairs at Kwangwoon University, said the support is not a direct cash handout, 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, adding that such terms could ultimately be reflected in construction costs and passed on to members.
Lee Eun-hyung, a senior researcher at the Korea Construction Policy Institute, said areas drawing intense competition tend to have clear profitability or symbolic value, and builders generally propose terms within a range unlikely to trigger legal problems. He added that financial authorities could still raise issues, but that would be decided after the fact, and said builders are taking an “all or nothing” approach focused on key projects.
* This article has been translated by AI.
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