Seoul's Mokdong new town reconstruction projects are accelerating their timelines for selecting construction companies and obtaining permits. This push comes in response to uncertainties stemming from the International Civil Aviation Organization's (ICAO) revised height restriction standards. As multiple bids converge, construction firms are facing complex calculations, and concerns are growing over potential rental shortages due to large-scale relocations.
According to the construction industry on July 29, major complexes in Mokdong are advancing their timelines for selecting construction companies and permit procedures by several months compared to initial plans.
The 14th complex, the largest in Mokdong with 5,123 units and a construction cost exceeding 3 trillion won, is considering announcing its bidding in September. The 7th complex, originally scheduled for bidding in the first half of next year, has moved its timeline up to October, while the 4th complex is expected to announce its bidding as early as next month.
The 12th complex will close its bidding on August 31. The 10th and 13th complexes, each with construction costs around 2 trillion won, have completed their site briefings, with the 10th complex set to finalize its bidding next month and the 13th complex in September. The 8th and 11th complexes are also joining the bidding process in the second half of the year, accelerating the overall reconstruction timeline in Mokdong.
The urgency behind this acceleration is linked to the ICAO's revised obstacle limitation surface standards, which are set to take effect in November 2030. Complexes in Mokdong, which are planning to rebuild up to 40 to 49 stories, are concerned that the new standards could impact their planned heights and project viability under domestic application methods.
The new standards aim to reduce uniformly restrictive areas for construction while expanding the scope for individual safety assessments. Although specific domestic criteria and transitional measures for existing projects have not been finalized, complexes believe securing project implementation permits before the new standards take effect is crucial to mitigate uncertainties.
A representative from a Mokdong reconstruction project stated, "We are tightening our schedules to be among the leading groups in the new town complexes and preemptively block policy uncertainties."
However, the simultaneous bidding from multiple projects has increased the burden on construction firms. Initially, 14 complexes were expected to select construction companies sequentially over two years, but with large-scale projects concentrated in the second half of the year, the distribution of manpower and financial resources has become inevitable.
Top construction firms like Samsung C&T and Hyundai Engineering & Construction have assessed that they may struggle to handle all the bids. While companies like POSCO E&C and Lotte Engineering & Construction may find opportunities, if construction firms selectively participate in strategic projects, some complexes may face delays in selecting contractors due to unsuccessful bids.
As the pace of projects accelerates, the timing of relocations may also become concentrated. The 14 complexes in Mokdong are expected to expand from the current 26,629 units to approximately 47,000 units after reconstruction. If project implementation permits and management disposition permits proceed simultaneously, the existing demand for relocation from about 27,000 units could become concentrated.
This influx may be difficult for Mokdong to absorb, potentially impacting the rental markets in Yangcheon District, as well as in Gangseo, Guro, and Yeongdeungpo districts, and even in Bucheon, Gyeonggi Province. Given the high demand for school districts, there are concerns about a decrease in rental listings and rising deposit amounts.
Yangcheon District plans to analyze the expected relocation volume by year through a study on stabilizing the Mokdong apartment reconstruction relocation plan and develop strategies to stagger the timing of relocations.
In some projects, there are movements to adjust the pace of work considering the capacity of construction firms and the potential for relocation challenges. There is a belief that if bidding and permits are concentrated, it could lead to delays in the projects.
A representative from a redevelopment project in Sinjeong-dong remarked, "If we insist on speed alone, we could face bottlenecks in permits or a relocation crisis. Some complexes are showing trends to adjust their bidding schedules to early next year when top-tier construction firms may have more capacity."
* This article has been translated by AI.
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