Daewoo E&C goes it alone in 500-billion-won Garak Woosung 1st reconstruction project

[Financial News] The selection of a construction company for the Garak Woosung 1st reconstruction project in Garak-dong, Songpa-gu, Seoul, failed at the first project briefing, with Daewoo E&C as the sole participant. As construction companies increasingly take a selective approach to bidding for projects, six major redevelopment projects in Garak-dong are moving ahead with plans to build a total of 4,910 units, accelerating the neighborhood’s transformation.
Daewoo E&C was the only company to attend the project briefing held on the afternoon of the 20th by the Garak Woosung 1st Apartment reconstruction association to select a construction company, resulting in a failed tender. The association plans to inform Songpa-gu Office, the public support agency, of the failed tender and issue a second bidding notice soon.

The Garak Woosung 1st Apartment reconstruction project involves building 967 housing units and ancillary welfare facilities on a 35,043.70-square-meter site around 96-1 Garak-dong, Songpa-gu, Seoul. The estimated construction cost is 501.995 billion won, or 9.85 million won per 3.3 square meters.
The association made the use of the contractor’s high-end brand a condition of participation. Daewoo E&C plans to use its high-end residential brand, Summit,
for the project. If a redevelopment project’s contractor tender fails at least twice in a row, the contract can be converted to a negotiated one, making Daewoo E&C likely to secure the construction contract.
Garak Woosung 1st is an apartment complex completed in 1986, comprising seven buildings and 838 units. Garak Market Station, served by subway Lines 3 and 8; Songpa Station on Line 8; and National Police Hospital Station on Line 3 are all within walking distance, making it one of the better-located reconstruction sites in Songpa. The area was designated for redevelopment in February 2024, followed by approval of the preparatory committee in December of that year and approval for the establishment of the association this March.
Construction companies have become noticeably more selective in pursuing redevelopment projects. In the past, two or more companies often attended a project briefing, but the tender would later fail at the actual contractor selection stage because only one company submitted a bid. Recently, however, there have been a series of failed tenders after just one company participated from the briefing stage.
On September 21, only Hyundai Engineering & Construction attended the project briefing for the nearby Macheon District 1 redevelopment project, and the tender failed. An industry official said, “With the number of redevelopment projects increasing, construction companies are strategically choosing which projects to pursue,” adding, “There is a trend of companies participating selectively from the project briefing stage, with negotiated contracts in mind.”

In Garak-dong, Songpa-gu, aging apartment complexes are moving ahead with redevelopment one after another, bringing a major neighborhood transformation under way. Garak Plaza (673 units), the furthest along, has completed relocation, while residents of Garak Miryung (435 units) and Samhwan Garak (648 units) are in the process of moving out. Garak Geukdong has received approval for its project implementation plan, and Garak Hyundai 6th is going through the approval process. The planned unit count for these projects and Garak Woosung 1st alone totals 4,910.
Major redevelopment sites elsewhere in Songpa-gu, as well as those in Garak-dong, are also entering the relocation phase. Garak Samik Mansion in neighboring Songpa-dong (936 units), Jamsil Woosung 4th in Jamsil-dong (555 units), Hanyang 3rd in Bangi-dong (252 units), and Garak 1st Hyundai in Munjeong-dong (514 units) are among the complexes whose residents are moving out or are expected to do so.
However, those on the ground say that expectations around progress on redevelopment projects are not immediately translating into demand for home purchases or increased transaction activity. Instead, the shortage of jeonse and monthly rental properties and rising prices are having a greater impact. Relocation demand from nearby redevelopment sites is also leading many residents to move elsewhere rather than stay in Garak-dong, given the burden of high jeonse and monthly rents.
A licensed real estate agent in Garak-dong said, “Usually, when a complex is relocating, people tend to move nearby, but with jeonse and monthly rents in Garak-dong having risen so much, it seems many are moving farther away, to places such as southern Gyeonggi Province.”
[email protected] Choi A-young Reporter