The selection of construction companies for key reconstruction projects in Seoul's Apyeomokseong area (Apgujeong, Yeouido, Mokdong, Seongsu) is intensifying in the second half of the year. Major construction firms are beginning to reveal their bidding strategies as significant projects like the Seongsu 2 District, Yeouido Shibum Apartments, and Mokdong 12 and 14 complexes enter the bidding process.
According to the construction industry on July 14, recent bids for major projects such as the Yeouido Gwangjang Apartments 38-1 reconstruction (Hyundai Engineering & Construction), Mokhwa Apartments reconstruction (Samsung C&T), Mokdong 6 complex reconstruction (DL E&C), and Seongsu 3 District redevelopment (Samsung C&T) have seen repeated single bids resulting in failures.
With instances of only one major construction firm participating in the bidding process, leading to negotiated contracts, industry experts suggest that major firms are effectively establishing their dominance in specific project sites.
In Yeouido, Samsung C&T and Hyundai Engineering & Construction are essentially dividing the key projects between them. Samsung C&T secured the construction rights for the Daegyo Apartments reconstruction, while Hyundai Engineering & Construction won the contract for the Hanyang Apartments.
Currently, the Yeouido Gwangjang Apartments 38-1 reconstruction is expected to be automatically rejected as Hyundai Engineering & Construction is the only firm attending the second site briefing. The association plans to convert to a negotiated contract, selecting Hyundai Engineering & Construction as the preferred negotiator, with a general meeting for construction company selection scheduled for September.
Conversely, the Mokhwa Apartments bid on July 9 was unsuccessful as only Samsung C&T participated. There are discussions about a re-bid leading to a negotiated contract.
At the largest project site in Yeouido, the Shibum Apartments, both Samsung C&T and Hyundai Engineering & Construction are reportedly the most active in reviewing the project, solidifying a competitive landscape between the two companies.
In the Seongsu Strategic Maintenance Zone, more than half of the outcomes have been determined. GS Engineering & Construction has been selected as the contractor for District 1, adopting the 'Xi' brand, while Lotte Engineering & Construction secured the construction rights for District 4 after competing with Daewoo Engineering & Construction, applying the 'Leel' brand.
The remaining project sites are Districts 2 and 3. In District 3, Samsung C&T participated alone in the first bid and is currently undergoing re-bidding. The only real competition appears to be in District 2, where DL E&C and IPAPK Hyundai Industrial Development are expected to compete. DL E&C has expressed a strong desire to secure contracts, while IPAPK Hyundai Industrial Development is also reviewing the project's viability.
In Mokdong, while the pace varies by complex, the competitive landscape among construction firms is gradually becoming clearer. DL E&C previously secured the construction rights for Mokdong 6 complex in June, marking its entry as the first contractor in Mokdong.
GS Engineering & Construction is considered the most likely candidate for Mokdong 12 complex, which will hold a site briefing on July 15. A negotiated contract following a single bid is highly probable.
Mokdong 14 complex is one of the few sites where competition between DL E&C and Daewoo Engineering & Construction is anticipated. Additionally, Samsung C&T is reportedly in discussions with the association regarding Mokdong 13 complex.
Currently, the only sites among the major Apyeomokseong projects expected to see real competition are Seongsu 2 District and Mokdong 14 complex. The remaining projects have either been effectively resolved with single candidates or a specific construction firm holds a significant advantage. Industry experts suggest that as major construction firms establish their foothold, it becomes increasingly difficult for latecomers to enter, leading to a competitive landscape dominated by top-tier firms.
Song Seung-hyun, CEO of Urban and Economic Research, stated, "A selective bidding strategy focused on high-profit core projects is being strengthened." He added, "Whereas previously, the competition involved ten major construction firms, it is now effectively being restructured around five or even three leading firms, reducing opportunities for other companies to participate."
However, he noted that not only brand competitiveness but also trust with the association plays a crucial role in determining the success of bids. Song emphasized, "In maintenance projects, firms that have built long-term trust with the association and its members are likely to have an advantage, and those that have consistently developed relationships from the early stages of the project often gain a strategic edge in bidding competition."
* This article has been translated by AI.
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