The construction company for the Seongsu 4 District redevelopment project in Seoul's Seongdong-gu will be finalized today. This project is viewed as a critical juncture not only for the competition between Daewoo Engineering & Construction and Lotte Engineering & Construction but also for the selection of construction firms across the Seongsu 1 to 4 districts.
According to the maintenance industry, the Seongsu 4 District redevelopment association will hold a general meeting at 3 p.m. today to select the final construction firm. Prior to the meeting, both companies will present their final project proposals during a third joint briefing.
The Seongsu 4 District redevelopment involves the construction of a residential complex with 1,439 units, ranging from six underground floors to a maximum of 64 above-ground floors, along with community facilities. The total project cost is estimated at 1.3628 trillion won, making it a significant redevelopment effort. This marks the first time in nearly four years that Daewoo and Lotte have faced off since the Hanam 2 District project in 2022, drawing considerable attention from the industry.
The selection of the construction firm has faced various challenges, including controversies over invalid bids and heated competition. The initial bidding in February was declared invalid due to issues with promotional methods and procedures. During the re-bidding process, Lotte's proposal to guarantee a minimum relocation cost of 2 billion won sparked controversy over compliance with bidding guidelines. Subsequently, both companies revised certain financial conditions, and the association improved its procedures, allowing the general meeting to proceed as scheduled.
In their project proposals, both companies presented differentiated strategies. Daewoo emphasized its 'Only One Seongsu' concept, highlighting designs by renowned architect Richard Meier and a landmark plan utilizing 520 meters of riverfront along the Han River. Key competitive advantages included the ability to allocate large unit sizes to all association members, the application of pocket terraces to all units, enhanced competitiveness for general sales, and financial support based on joint guarantees.
In contrast, Lotte showcased its 'Seongsu Leel S70' project, featuring designs involving international experts like David Chipperfield and LERA. They emphasized their high-rise construction expertise and the competitiveness of their 'Leel' brand, drawing on their experience with the Lotte World Tower.
When comparing financial conditions, both companies applied the maximum legal limit of 100% loan-to-value (LTV) ratios for both basic and additional relocation costs, indicating similarities in their overall frameworks. However, Daewoo highlighted financial stability through joint guarantees on project and relocation costs, while Lotte proposed a payment guarantee method.
In terms of total project costs, Lotte's bid was slightly lower, with a construction cost of 1.3099 trillion won compared to Daewoo's 1.3126 trillion won. The net construction cost per 3.3 square meters was also lower for Lotte (approximately 10.17 million won) than for Daewoo (approximately 10.32 million won). Additionally, Lotte's indirect costs were set at 51.9 billion won, lower than Daewoo's 78.1 billion won.
There were also differences in strategies for unsold units. Lotte proposed to purchase unsold units based on the initial general sale price, while Daewoo set conditions based on the highest value among the initial general sale price, the appraisal value at completion, and 150 million won per pyeong.
Meanwhile, the overall Seongsu Strategic Maintenance District is also accelerating the selection of construction firms. In April, GS Engineering & Construction secured a contract for the Seongsu 1 District through a sole bid, while Samsung C&T is being considered a strong candidate for the Seongsu 3 District as the only major construction firm to participate in the bidding. The selection process for the Seongsu 2 District has resumed following the establishment of a new executive body, with interest from firms like IPARK Hyundai Industrial Development.
Industry experts believe that the outcome of the Seongsu 4 District construction firm selection will significantly influence the overall atmosphere of the Seongsu Strategic Maintenance District. Given that the Seongsu area is a key redevelopment site along the Han River, it is expected to have a substantial impact on the competition and progress of construction firms in the Seongsu 2 and 3 districts.
* This article has been translated by AI.
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