Mid-sized Korean construction firms are accelerating strategic shifts as major builders dominate Seoul's key urban redevelopment projects and regional housing markets remain depressed. Judging that their traditional focus on housing and public works alone cannot sustain growth or survival, these mid-tier companies are expanding into overseas development, energy infrastructure, senior housing and small-scale redevelopment projects.
According to the Construction & Economy Research Institute of Korea (CERIK) on Thursday, contract awards for mid-sized and small builders — estimated based on the gap between construction order data from the National Data Office and the Construction Association of Korea — plunged to 15.7 trillion won last year from 34.2 trillion won in 2021. The order volume has effectively been halved.
The concentration toward major builders has become even more pronounced in the urban redevelopment market. Last year, the combined redevelopment orders of the top five firms — Hyundai Engineering & Construction, Samsung C&T, GS Engineering & Construction, POSCO E&C and HDC Hyundai Development — totaled 36.86 trillion won. That was 3.1 times the 11.81 trillion won combined orders of the sixth- to 10th-ranked companies.
Conditions in the public sector are equally challenging. As the Korea Land and Housing Corporation (LH) directly undertakes public land development projects, mid-tier builders' foothold has narrowed further. As a result, these companies are accelerating their search for new revenue sources, concluding that existing business structures have reached their limits.
A representative example is Bando Engineering & Construction, which is expanding overseas development. The company aims to build its US housing development business into a sustainable revenue model rather than a one-off project. After completing "The Bora 3170," a 252-unit project in Los Angeles' Koreatown, Bando is pushing ahead with a follow-up 262-unit development, "The Bora 3020," targeting completion in January next year.
BS Hanyang is focusing on strengthening its energy and infrastructure business. With Solaseado in Haenam, South Jeolla Province, as its core base, the company is also advancing a biomass power plant in Gwangyang, scheduled for completion this year, and the Yeosu Myodo LNG hub terminal project, targeted for operation in 2028. The energy and infrastructure segment's revenue share accordingly expanded to 30% in 2025 from 24% in 2024.
Woomi Construction has picked senior housing as its future growth engine. After being selected last year as the preferred bidder for LH's Silver Stay pilot project near Guri Galmae Station, the company has broadened its scope beyond simple contracting into development and operations. The project will comprise five buildings with 29 floors each and a total of 725 units, of which 346 units will be supplied as 20-year long-term rentals for middle-class senior citizens. Construction is scheduled to begin in January next year with move-in targeted for the end of 2029.
In the redevelopment sector, mid-tier builders are also actively targeting smaller sites with relatively lower competition. Doosan Engineering & Construction secured construction rights in the first quarter for the Shinan Villa reconstruction in Magok-dong, the Sillim-dong small-block housing redevelopment, public redevelopment in Chungjeongno District 1 and Hongeun District 1, and the Myeongjang District 3 reconstruction in Busan. Ssangyong E&C also won the small-block housing redevelopment near Noryangjin Station's Eunha Mansion in February, accumulating six redevelopment projects worth about 600 billion won in Seoul alone.
Experts diagnose that polarization within the construction industry is deepening. "While overall construction orders grew last year, polarization by company size is widening further," said Lee Ji-hye, research fellow at CERIK. "This is a time when policy support and response strategies are needed to maintain the stability of the industrial ecosystem and regional construction markets."
