Rising construction costs and weaker profitability are pushing South Korean builders to pursue “selective bidding” rather than aggressive head-to-head competition, reshaping Seoul’s redevelopment market around solo bids. In that shift, DL E&C has effectively secured the first builder’s role in the Mokdong reconstruction market by emerging as the only bidder for the Mokdong New Town Complex 6 project, seen as the fastest-moving among the area’s major rebuilds.
According to the redevelopment industry on the 21st, DL E&C was the sole participant in the second round of bidding to select a contractor for the reconstruction of Mokdong New Town Complex 6 in Seoul’s Yangcheon district. The bid closed at 2 p.m. With no rival bidder again after the first round on April 10, the project has effectively moved toward a negotiated contract.
Under the Urban and Residential Environment Improvement Act, if only one company bids in a second round, the association may choose the contractor through a negotiated deal. The Mokdong Complex 6 association is expected to sign a contract with DL E&C after a general meeting in late June. Complex 6 is considered the quickest-moving of Mokdong’s 14 complexes and is viewed as the starting point for a large-scale reconstruction program totaling 26,000 households and about 30 trillion won in project costs.
This year’s Seoul redevelopment market is expected to reach a record scale as major projects move to select contractors, but analysts say the trend is shifting away from the intense bidding wars of the past and toward solo bids.
Recent projects have followed that pattern. Samsung C&T was selected after submitting the only bid for the Daechi Ssangyong 1 reconstruction project in Seoul’s Gangnam district on April 11. POSCO E&C also secured the Singil Station-area redevelopment project as the sole bidder. Other projects decided through solo bids include Songpa Hanyang 2 reconstruction (GS Engineering & Construction), Singil District 1 public redevelopment (Hyundai Engineering & Construction), and Geumho District 21 redevelopment (Lotte Engineering & Construction).
The shift is widely attributed to a combination of higher construction costs and heavier financing burdens. With rising materials and labor costs driving up budgets, builders also face project financing (PF) pressure and the risk of unsold units, making profitability harder to predict. Companies also factor in the expense of design proposals, financing terms and marketing, which can erode margins as competition intensifies.
As a result, builders are increasingly concentrating on projects where returns appear more secure rather than pursuing contracts at any cost.
GS E&C has won the Songpa Hanyang 2 and Gaepo Wooseong 6 reconstruction projects this year and is seeking additional contracts, including Seongsu Strategic Redevelopment Zone District 1 and Seocho Jinheung Apartments.
Hyundai E&C has also identified Apgujeong Districts 3 and 5, Mokdong reconstruction complexes, and the Seobinggo Shindonga Apartments in Yongsan district as core targets. “We are working to win only key projects,” a Hyundai E&C official said.
Lotte E&C is focusing its efforts on winning Seongsu District 4 while reviewing participation centered on projects it sees as strong, including sites in Mokdong and Macheon in Songpa district. “From the bidding stage through presales and move-ins, we are pursuing selective bidding focused on places where projects can proceed stably,” a Lotte E&C official said.
DL E&C is also watching major sites including Apgujeong District 5, Mokdong Complex 6, Seongsu District 2 and Yeouido. “We are maintaining a selective bidding approach centered on profitability,” a DL E&C official said.
Competition, however, has not disappeared everywhere. In high-profile areas such as Apgujeong, Yeouido, Mokdong and Seongsu, major builders are still expected to compete. In a recent bid to select a contractor for Apgujeong District 5 reconstruction, the process was halted after an employee of a construction company was caught taking unauthorized photos of bid documents, highlighting risks tied to overheated competition. The association’s work has since been reorganized and normalized.
Overall, this year’s bidding is expected to show “low-intensity competition” dominated by solo bids, while “selective showdowns” continue in a handful of prime districts. Lee Tae-hee, a doctor, said the increase in Seoul redevelopment volume has reduced the need for loss-leading competition and that offering overly aggressive terms can become a sunk-cost burden. He added that in symbolic projects such as Apgujeong, companies believe being shut out could narrow their standing in the market.
* This article has been translated by AI.
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