"We Also Aim for Premium Brands"... Conflicts with Construction Companies Arise Throughout Maintenance Projects

[Asia Economy Reporter Kim Hyemin] Conflicts between major redevelopment and reconstruction associations and construction companies over apartment brands are continuing. As more apartments with premium brands are increasing one by one, demands for brand changes are pouring in even at existing projects where construction companies have already been selected. As tensions deepen, movements to terminate construction contracts are also increasing.

According to the maintenance industry on the 30th, some association members recently submitted a petition for a general meeting to terminate the construction contract in Sinwol-gok 1 District, Seongbuk-gu, Seoul. This district had already selected a consortium of Lotte Construction and Hanwha Construction as the construction company in December 2009. In August last year, the project implementation approval was also completed.

However, recently some association members have been demanding a change of construction company, intensifying the conflict. Instead of the brand ‘Mark One’ proposed by the existing construction company, they are demanding the use of Lotte Construction’s premium brand ‘Le L’ and have formed an emergency countermeasure committee to seek consent for dismissal of the construction company. These residents are demanding that if the premium brand change is difficult, the construction contract should be terminated and a competitive bidding process initiated.

Last month, the redevelopment association of Sindang 8 District in Jung-gu held a general meeting and passed a motion to terminate the construction contract with DL E&C. The association demanded the use of DL E&C’s premium brand ‘Acro’ instead of ‘e-Pyeonhansesang,’ and when this was rejected, they took the strong step of terminating the construction contract. This was two years after the construction company was selected in 2019. In Heukseok 9 District, Dongjak-gu, conflicts over the application of the ‘Le L’ brand also escalated, leading to the termination of the contract with Lotte Construction.

Conflicts over brands are spreading to local projects as well. The redevelopment association of Gwangcheon-dong, Seo-gu, Gwangju, the city’s largest redevelopment project, held a general meeting in May and terminated the contract after DL E&C consortium rejected their demand to apply the ‘Acro’ brand. In Seogeumsa Redevelopment Promotion Zone, Geumjeong-gu, Busan, the 6th district also parted ways with the existing construction company following the 5th district.

This phenomenon is due to the growing perception that brands increasingly influence housing prices. The psychology is that applying a premium brand will better help increase housing prices in the future. The fact that construction companies have been emphasizing the application of premium brands to win bids has also raised the expectations of associations. An industry insider said, "Premium brands, which were previously applied only to specific complexes in the Gangnam area, have expanded to the Gangbuk area and remodeling projects, increasing dissatisfaction among associations that have already signed contracts."

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