A representative from a real estate agency A in Apgujeong-dong, Gangnam-gu, Seoul, said, "As the reconstruction of the Apgujeong 2 district accelerates, the nearby apartment complexes are growing in anticipation. Due to the excitement over reconstruction, there are hardly any listings these days."
As the bidding for the construction company for the reconstruction of the Apgujeong 2 district (Apgujeong Shin Hyundae Apartments 9, 11, and 12) in Apgujeong-dong, Gangnam-gu, Seoul, approaches, the anticipation for reconstruction is rising among residents of apartment complexes in the Apgujeong area.
According to the maintenance industry on the 29th, the Apgujeong 2 district reconstruction association announced a bidding notice on the 18th. Apgujeong is divided into six special planning zones for apartment reconstruction, with the Apgujeong 2 district being the fastest in terms of project speed. Through reconstruction, it is expected to transform into a complex with a floor area ratio of 300% or less, up to 65 stories, 14 blocks, and 2,571 households.
Eight construction companies, including Hyundai E&C, GS Engineering and Construction, POSCO E&C, DL E&C, HDC Hyundai Development Company, KOLON GLOBAL, BS Hanyoung, and Jeil Construction, attended the site briefing held on the 26th at 2 p.m. Although competition with Hyundai E&C was expected, Samsung C&T's construction division, which later expressed its intention not to bid, did not attend the briefing. The association plans to close bids on August 11 and hold a general meeting for the selection of the construction company in September.
The total construction cost of the Apgujeong 2 district is estimated to be around 2.7 trillion won, focusing interest on the bidding battle between Samsung C&T and Hyundai E&C, the top two companies in industry construction capability evaluation. However, the Apgujeong 2 district reconstruction association recently passed unusual bidding guidelines in a general meeting, including major restrictions on alternative design scope, presenting all interest rates in the form of CD plus additional charge, not accepting proposals for relocation loans over 100% LTV, and not allowing proposals for additional relocation loan interest rates or other financial techniques, leading Samsung C&T to declare its intention to withdraw.
Samsung C&T announced in a letter sent to the Apgujeong 2 district reconstruction association on the 20th, "We have been actively preparing for the bid, treating the Apgujeong 2 district as a strategic business site and collaborating with global architectural designers and financial firms to create a world-class landmark complex. However, we determined that we could not include the design and financial proposals we had prepared due to the bidding conditions set by the association."
Residents are paying attention to the conditions that Hyundai E&C will present, and some expressed disappointment at Samsung C&T's absence. A resident named Kim (75), whom I met in the Apgujeong 2 district, said, "The resident age group in Apgujeong 2 district is somewhat older, and many have lived here for a long time, so they cannot imagine a name change from Hyundai Apartments. I think this aspect influenced Samsung C&T's departure. Although specific conditions have not yet been revealed, there seems to be a vague expectation that Hyundai E&C will offer appropriate terms without competition."
A representative from a nearby real estate agency B noted, "Generally, competition is necessary for the association to receive favorable terms, but in Apgujeong, there are still reconstruction projects remaining in districts 3, 4, and 5 after district 2, so it is unlikely that Hyundai E&C will propose unfavorable terms to the association." This implies that if they set unfavorable conditions for district 2 while needing to win contracts in other districts, it could create negative perceptions about Hyundai E&C, adversely affecting contracts in other areas.
Residents from areas outside of district 2 are also showing high interest in the reconstruction of district 2. A resident named Yoo (52), whom I met in district 5, said, "I have lived in this complex for a long time, and as the reconstruction of district 2 progresses, discussions about shared costs and other reconstruction-related topics have begun among residents. I believe that once the conditions presented to district 2 are disclosed and the selection of the construction company is completed, expectations will grow even more."
There are reactions expressing disappointment at Samsung C&T's absence. A representative from a nearby real estate agency C commented, "There was a support base for Samsung C&T among residents, but now that they have declared their complete withdrawal, there are people feeling disheartened. Competition would have been beneficial for the shareholders, so there is a sense of disappointment. "