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Lotte Construction Selected as Contractor for Mokdong 2nd Remodeling
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Lotte Construction Mokdong 2nd Woosung Apartment Partial Perspective

As construction companies turn their attention to mid-rise complex remodeling amid tightened reconstruction regulations, a fierce bidding war is expected this year.

According to the construction industry on the 2nd, Lotte Construction was selected as the contractor at the 'Mokdong 2nd Woosung Apartment Remodeling Project Contractor Selection General Meeting' held on the 27th of last month in Yangcheon-gu, Seoul. This apartment complex is a mid-rise apartment with 1,140 households ranging from 14 to 18 floors, built in 2000 in the area of 337 Sinjeong-dong, Yangcheon-gu. The remodeling construction cost is approximately 494.4 billion KRW.

Lotte plans to further expand its remodeling projects this year based on this contract win. Previously, Lotte had consecutively won remodeling projects in prime locations within Seoul, such as Galaxy 1st in Jamwon-dong, Seocho-gu in 2019, and Hyundai in Ichon-dong, Yongsan-gu last year. A company official stated, "Previously, we selectively reviewed remodeling projects only in areas like the Han River waterfront or the Gangnam 3 districts, but going forward, we will expand to the first-generation new towns and the Gyeonggi Province area."

HDC Hyundai Development Company completed preparations to actively enter the bidding war by establishing a dedicated remodeling organization within the Urban Maintenance Business Office through an organizational restructuring in December last year. Currently, HDC Hyundai Development is promoting remodeling projects at four sites: Jamwon Hanshin Royal, Daechi 1st Hyundai, Daechi 2nd Complex, and Gwangjang Sangnok Tower. In particular, they are recently conducting a second safety review of Daechi 1st Hyundai Apartment, a complex in the Gangnam area.

Among remodeling complexes in the metropolitan area that have received approval for association establishment, the Cheolsan Hanshin Apartment in Gwangmyeong, Gyeonggi Province, which is the largest scale, is also attracting attention. The association selected the Ssangyong Construction-Hyundai Engineering consortium as the preferred negotiation partner at the end of last month.

A fierce competition among companies is also expected in major metropolitan area projects where contractor selection is imminent. For Namsan Town in Sindang-dong, Jung-gu, Seoul, estimated to have a total construction cost of about 1 trillion KRW, Hyundai Engineering & Construction, GS Engineering & Construction, Daewoo Engineering & Construction, and POSCO Engineering & Construction are reportedly engaged in a behind-the-scenes bidding war. This apartment complex, completed in 2002, is notable for its size of 5,150 households and its location on the slopes of Namsan. Additionally, contractor selections are pending for △Ssangyong 1st in Garak-dong, Songpa-gu (2,054 households) △Byeoksan in Geumho-dong, Seongdong-gu (1,707 households) △Shinseong Sinan Ssangyong Jinhung in Yeongtong, Suwon (1,616 households) △Yulgok Jugong in Sanbon New Town (2,042 households) and Sanbon Ureuk (1,312 households).

Since the safety inspection was strengthened in March 2018, it has become difficult for apartment reconstructions to receive passing grades such as D (conditionally allowed) or E (poor) even if they exceed the standard age of 30 years after completion. In contrast, remodeling can be pursued if the building is over 15 years old. There is no obligation to supply rental housing, nor is it subject to the excess profit recovery system.

According to the 2018 Population and Housing Census, the number of households in domestic apartments over 20 years old reached 4,287,000. In this context, the approval of the remodeling project plan for Hansol Village Jugong 5 Complex in Bundang New Town last month, the first among first-generation new town apartments in the metropolitan area, is seen as a sign of a favorable wind for the remodeling market.

However, the future of remodeling projects is not entirely smooth. Experts point out that government regulations remain regarding vertical extensions and the allowance of demolition of load-bearing walls between units. Park Yong-seok, Senior Research Fellow at the Korea Construction Industry Research Institute, said, "It is necessary to rationalize related regulations by allowing demolition of load-bearing walls and vertical extensions within the range that does not affect safety during apartment remodeling, expanding floor area ratio incentives, and excluding similar regulations applied to reconstruction."

This content was produced with the assistance of AI translation services.