In a significant development in the Gangnam reconstruction market, Hyundai Engineering and Samsung C&T have emerged victorious in recent bidding contests, solidifying their positions as the leading players in the sector. Hyundai secured the Apgujeong District 5 project, while Samsung won the integrated reconstruction of Shinbanpo Districts 19 and 25. Industry experts believe these results will enable Hyundai to strengthen its brand town strategy in Apgujeong and Samsung to do the same in Banpo.
According to the construction industry on May 31, Hyundai Engineering and Samsung C&T outperformed their competitors to secure construction rights for the Apgujeong District 5 and Shinbanpo Districts 19 and 25 projects, respectively. Both sites are considered prime locations in Gangnam, with intense competition focusing on maximizing Han River views, financial support, and specialized designs.
In the Apgujeong District 5 reconstruction project, 1,016 out of 1,199 members of the reconstruction association participated in the vote, selecting Hyundai Engineering as the construction company. Hyundai received 599 votes, while competitor DL E&C garnered 398 votes, with 19 abstentions.
Hyundai's strategy focused on appealing to members by promising to create a high-end residential complex that inherits the identity of the iconic Apgujeong Hyundai Apartments. They proposed the name 'Apgujeong Hyundai Galleria' for the new development. With this win, Hyundai has now secured half of the six reconstruction zones in Apgujeong, having previously won bids for Districts 2 and 3.
This victory also bolsters Hyundai's plans to establish a 'Hyundai Brand Town' in the Apgujeong area, which is known for its strong association with the Hyundai brand. Analysts suggest that the continuity of the brand and expectations for future property value increases influenced the members' voting decisions.
In the Shinbanpo District 19 and 25 integrated reconstruction project, Samsung C&T was selected over POSCO E&C. At the general meeting held on May 30, Samsung received 239 votes from the 399 attending members.
Samsung proposed the name 'Raemian Illucera' for the new complex, aiming to create a 'Raemian Town' that connects existing Raemian properties in the Banpo and Jamwon areas, including Raemian Shinbanpo Palace, Raemian Shinbanpo Rio Center, and Raemian Heriven Banpo. The strong preference for the Raemian brand in the Banpo area also played a favorable role in the bidding process.
These results highlight the trend of consolidation among major construction firms in the reconstruction market. For associations, the importance of selecting a construction company capable of completing projects reliably amid rising construction costs, raw material prices, labor costs, and financing expenses has become increasingly critical. The preference for established large construction firms has intensified, considering post-occupancy market values and the success of general sales.
Large construction companies are focusing on securing prime locations, leveraging their substantial order backlogs and financial resources. In particular, reconstruction projects in Gangnam are seen as symbols of future high-end brand competitiveness, beyond just the monetary value of contracts. Meanwhile, mid-sized construction firms are exploring opportunities through selective bidding focused on profitability and expanding into public and non-residential sectors.
Last year, the combined order value for reconstruction projects by Samsung C&T and Hyundai Engineering reached 19.7493 trillion won, accounting for approximately 40% of the total order value for the top 10 construction firms. In the order ranking, Samsung C&T maintained the top position, followed by Hyundai Engineering in second place.
Song Seung-hyun, CEO of Urban and Economy, stated, "Choosing a large construction firm allows members to expect a brand premium that is favorable for future market value formation, and these firms have strong financing capabilities and extensive construction experience, which reduces the risk of project delays. It is likely that the dominance of large construction firms like Hyundai Engineering and Samsung C&T will continue in future key location reconstruction and redevelopment projects."
He added, "As construction costs rise, future bidding will likely shift from simple brand competition to a more comprehensive approach that includes business viability improvements, financial support, and specialized designs."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.