Invest1 publisher3 min readPublished
Samsung C&T wins Yeouido's 512.2 billion won Mokhwa rebuild as the only bidder in both rounds
Four of Seoul's marquee apartment reconstruction sites, in Yeouido and Mokdong, have each drawn a single bidder. Sedaily attributes it to builders squeezed by rising costs picking projects on margin and on their odds of winning.
The Investor · Invest desk
What happened
- The Mokhwa reconstruction association picked Samsung C&T at a general meeting on the 12th, after the builder was the only bidder in both rounds, according to industry sources cited on the 13th.
- Mokhwa becomes three buildings running from seven basement levels to 49 floors above ground with 420 units, at an estimated construction cost of about 512.2 billion won.
- Yeouido's biggest prize, Sibeom, would turn 1,584 units into 2,491 in towers up to 59 floors at a construction cost of 2 trillion won, and its first round failed with only Samsung C&T entering.
- Samsung C&T already held Yeouido's Daegyo complex, a 798.7 billion won project won in November last year, and is the sole bidder so far at Mokdong Complex 13.
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Why it matters
- constraint An association facing one bid has no competing number to negotiate against; its only lever is to run the round again and lose months, and a second failed round ends in a private contract.
- exposure Members at each solo-bid site approved an estimate that no rival bid tested, and they carry whatever the contract price turns out to be.
- decision Samsung C&T is concentrating its Seoul reconstruction capacity in Yeouido, and it did not enter the Mokdong rounds where Hyundai E&C and GS E&C stood alone.
Divide 512.2 billion won by 420 units and Yeouido's Mokhwa comes to about 1.22 billion won a unit to build [4][3][1]. Sibeom, the district's biggest job, is 2 trillion won for 2,491 planned units, roughly 803 million won each [7][2]. The small site is priced about 52% higher per unit than the big one [3]. Three towers running to 49 floors, a Han River view written into every unit, and an elevated walkway from Yeouinaru Station through to Hangang Park account for some of it [3][5].
Put the solo rounds side by side. Mokhwa at 512.2 billion, Sibeom at 2 trillion, Mokdong Complex 10 at 2.61 trillion and Mokdong Complex 12 at 1.79 trillion add to about 6.91 trillion won of construction where exactly one builder filed [4][7][9][10][4]. Sedaily reports construction cost estimates and not the prices in the signed contracts [8].
Sedaily attributes the pattern to builders squeezed by rising costs sharpening a selective bidding strategy, weighing profitability and their odds of winning [12]. Each builder is also choosing where not to file. Samsung C&T holds Mokhwa and the 798.7 billion won Daegyo complex, 1.31 trillion won of Yeouido work between them [6][5]. Sibeom would take that to about 3.31 trillion won in one district [6]. It was alone again at Mokdong Complex 13 when the first round closed on the 7th [11]. Hyundai E&C sat through two consecutive solo rounds at Mokdong 10 before being named preferred bidder on the 26th of last month [9]. GS E&C had Mokdong 12's first round and its second on-site briefing to itself [10].
The counter-case sits in Mokdong. At Complex 7, to be rebuilt with 4,335 units, several large builders have opened showrooms to court association members. Samsung C&T, Hyundai E&C, DL E&C and Lotte E&C have all shown interest, and Sedaily's own question is whether that turns into competitive bidding [13]. In Yeouido, the Eunha and Samik complexes began contractor selection on the 11th. They run 360 units each, identical in scale since they were finished side by side in 1974, and both GS E&C and Lotte E&C are interested in the combined project [14].
I think the evidence carries the narrow claim and not the wide one. Four of Seoul's largest reconstruction jobs went to, or are heading to, the one builder who bothered to enter, and cost pressure is the reason on the record [12]. That is a long way from showing contractors set the price, because no rejected rival bid exists to measure the estimates against. If two of the four builders showing at Complex 7 file, the single-bidder rounds would be margin decisions at specific sites, and the 2,491-unit Sibeom tender in December is the cleaner test.
What to watch
- Sibeom's second round in December: another entrant, or a private contract with Samsung C&T on a 2 trillion won job.
- The Gwangjang Zone 38-1 association's contractor selection meeting on the 19th, with Hyundai E&C already the preferred bidder.
- Mokdong Complex 8's first round closing on the 22nd, where Daewoo E&C signalled interest early and is expected to win.