In the second half of the year, the selection of construction companies for key reconstruction projects in Seoul's Apyeomokseong area (Apgujeong, Yeouido, Mokdong, Seongsu) is gaining momentum. 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 the 14th, recent single 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 resulted in repeated failures.
With instances of only one major construction firm participating in the bidding process leading to negotiated contracts on the rise, industry experts suggest that leading construction companies 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 and select Hyundai Engineering & Construction as the preferred bidder, with a general meeting for construction company selection scheduled for September.
Conversely, the Mokhwa Apartments faced a failed bid on the 9th, with only Samsung C&T participating. There are discussions about a potential 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 actively considering 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. District 3 is currently undergoing re-bid procedures after Samsung C&T participated alone in the first bid. The only real competition appears to be in District 2, where DL E&C and IPARK Hyundai Industrial Development are expected to compete. DL E&C has expressed a strong willingness to secure contracts, and IPARK Hyundai Industrial Development is also reportedly evaluating the project's viability.
In Mokdong, while the pace varies by complex, the competitive landscape among construction firms is gradually becoming clearer. Earlier, DL E&C 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 the 15th. It is highly probable that this will lead to a negotiated contract following a single bid.
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 continuing discussions with the association regarding Mokdong 13 complex.
Among the major project sites in Apyeomokseong, the only areas expected to see actual competition are Seongsu 2 District and Mokdong 14 complex. The remaining projects have either been effectively resolved with single candidates or are dominated by specific construction firms. Industry experts suggest that as major construction firms establish their foothold first, it becomes increasingly difficult for latecomers to enter, leading to a restructuring of the bidding landscape centered around top-tier construction companies.
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 construction 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, construction firms that have built long-term trust with association members and executives are likely to have an advantage. Firms that have consistently established relationships from the early stages of the project often gain a strategic edge in bidding competitions."
* This article has been translated by AI.
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