"United We Grow"... The Boom of 'Integrated Remodeling' Dreaming of a Grand Complex Transformation

7 Complexes Including Mullae Hyundai 1, 2, 3, 5, and 6 Phases Proceed with Resident Consent for Union Establishment
Although Small to Medium-Sized Complexes, Combined Total of 1,973 Households... Expecting Large Complex Effect
Different Business Conditions by Complex Cause Many Difficulties in Reaching Resident Agreement

[Asia Economy Reporter Ryu Tae-min] The trend of 'integrated remodeling' is spreading in aging mid-rise apartment complexes in Seoul and the metropolitan area. This movement is driven by expectations of rising housing prices due to the 'landmark effect' created by forming large complexes. Since various community facilities that small-scale complexes could not enjoy before can now be provided, the preference for the 'large complex premium' is expected to expand.

According to the industry on the 9th, seven small complexes including Hyundai 1, 2, 3, 5, and 6 in Mullae-dong, Mullae Doosan We’ve, and Daewon Apartments are currently conducting preliminary resident consent for establishing an integrated remodeling housing association. These complexes formed a promotion committee in July and have reportedly obtained about 30% resident consent so far.

These apartments, built between 1986 and 1998, are small-scale complexes ranging from 166 to 390 households. By complex: ▲ Hyundai 1st (264 households) ▲ Hyundai 2nd (390 households) ▲ Hyundai 3rd (166 households) ▲ Hyundai 5th (282 households) ▲ Hyundai 6th (270 households) ▲ Daewon Cantaville (218 households) ▲ Doosan We’ve (383 households), totaling 1,973 households when combined. Due to the existing floor area ratio being around 300%, making reconstruction or even individual remodeling difficult, these small complexes decided to unite and pursue integrated remodeling to improve business feasibility.

In the first-generation new towns in the metropolitan area, complexes pursuing integrated remodeling are also emerging. In Sanbon-dong, Gunpo New Town, Gyeonggi Province, Dongsung Baekdu and Geukdong Baekdu Apartments have achieved a preliminary consent rate of 50% and are preparing to establish an association. Both complexes were built in 1993, with Dongsung Baekdu having 460 households and Geukdong Baekdu 472 households, totaling 932 households. In Ilsan-dong, Ilsanseo-gu, Goyang City, Gyeonggi Province, the 11th and 12th complexes in Hugok began full-scale integrated remodeling projects in July. These complexes, totaling 1,554 households, plan to create a large complex of about 2,000 households through integrated remodeling.

The popularity of integrated remodeling stems from expectations of the 'large complex premium.' The larger the complex, the more households increase significantly, improving business feasibility and enabling transformation into landmark apartments constructed by major construction companies. Additionally, community facilities such as fitness centers, libraries, and guest houses, which are difficult to install in small complexes, can be provided, enhancing residents' convenience. As the number of residents increases, the shared management fees borne by residents can also be reduced, making it highly preferred by residents.

For this reason, in the Gangnam area of Seoul, there is a movement to promote integrated remodeling centered on solo complexes consisting of one or two buildings. In Jamwon-dong, Seocho-gu, Seoul, Banpo Hanshin Tower (250 households), Blue Hill House (125 households), Jamwon Central Heights (126 households), and Kim’s Village (160 households) have been promoting integrated remodeling since the first half of this year. Although these complexes have excellent locations, they are solo apartments with undervalued real estate values, which they seem to aim to resolve through integrated remodeling.

Construction companies also prefer the integrated remodeling method, judging that it is more profitable because the number of general sale units is higher than when winning individual remodeling projects.

However, since business conditions vary by complex, it should be noted that it is not easy to achieve resident consensus. In fact, five complexes in Ichon-dong, Yongsan-gu?Kolon, Gangchon, Hangaram, Hangang Daewoo, and Woosung?pursued integrated remodeling but failed due to differences in opinions. Currently, Hangaram Apartment is pursuing remodeling independently.