"Everyone Launching High-End Brands"... Now Is the Season of Apartment 'Brand 2.0'

High-end Brand Created by DL E&C in 1999 Becomes Mainstream After 20 Years
7 out of Top 10 Construction Companies Expand Housing Business with High-end Brands

The entrance view of The H Banpo La Class, featuring Hyundai Construction's high-end brand. [Provided by Hyundai Construction]

[Asia Economy Reporter Cha Wanyong] Apartment brands are evolving. It is no longer just about naming or renewing logos. Through premium residential brands that differentiate from general apartment brands, they provide value and pride in life and space. If the early 2000s, when apartment brand launches were booming, was the ‘Brand 1.0’ season, now is truly the apartment ‘Brand 2.0’ season.

"Without a High-end Brand, You Can't Even Bid"

According to the construction industry on the 13th, recently POSCO Engineering & Construction and SK Ecoplant launched high-end brands. As a result, 7 out of the top 10 construction companies based on 2022 construction capability evaluation (Hyundai Engineering & Construction, DL E&C, POSCO E&C, Daewoo E&C, Hyundai Engineering, Lotte Engineering & Construction, SK Ecoplant, etc.) now have high-end brands.

The reason construction companies launch high-end brands is that brand value is becoming increasingly important in the urban renewal market, such as reconstruction and redevelopment, where competition among contractors is fierce. In the urban renewal market, brand power is considered the most important factor leading to winning contracts.

In fact, in popular urban renewal areas like Gangnam, the associations do not even allow bidding unless the contractor is a large construction company with a popular brand. As a result, construction companies are introducing more luxurious and differentiated brands to gain an edge over competitors.

Even in the general subscription market, premium brand complexes are more popular than general brand complexes. According to data from Korea Real Estate Agency’s subscription home from January to December 2021, complexes with premium brands showed higher first-priority subscription competition rates compared to those with general brands.

Hyundai Engineering & Construction recorded an average first-priority subscription competition rate of 37 to 1 for THE H, higher than Hillstate’s 21 to 1. Daewoo E&C’s ‘Prugio’ (20 to 1) and ‘Prugio Summit’ (25 to 1) also showed differences.

DL E&C’s High-end Strategy Secures Prime Gangnam Locations

The first construction company to launch a high-end brand was DL E&C. In 1999, when the concept of apartment brands was not yet established, they launched the premium residential complex brand ‘ACRO.’ This was before the apartment brand ‘e-Pyeonhansesang’ (launched in 2000). Later, in 2013, they redefined the scope under the concept of residential and established it as a high-end brand.

DL E&C, led by ACRO, secured many prime reconstruction complexes in Gangnam, including ACRO Re-park (Sinbanpo), ACRO Riverview (Banpo), ACRO Seoul Forest (Seongsu), and ACRO Riverheim (Dongjak).

Daewoo E&C, which launched the high-end brand Prugio Summit in 2014, supplied Seocho Prugio Summit, Yongsan Prugio Summit, Banpo Summit, and notably completed the Gwacheon Prugio Summit brand town by winning three reconstruction projects in Gwacheon alone.

Additionally, Daewoo E&C was the first among large construction companies to supply The Beach Prugio Summit in Busan (Daeyeon 4 District reconstruction), outside the metropolitan area.

Hyundai Engineering & Construction launched the high-end brand ‘THE H’ in 2015 to win reconstruction projects in Seoul’s Gangnam area. Through this, they achieved rapid growth in the housing market. In the first half of this year, Hyundai Engineering & Construction achieved 7 trillion KRW in urban renewal project orders for the first time since its founding, aiming for industry first place for four consecutive years. They quickly established themselves by pursuing aggressive order strategies in major renewal markets including Gangnam and Yongsan. Their affiliate Hyundai Engineering jointly uses Hillstate and also supplies THE H through agreements.

Lotte Engineering & Construction introduced the high-end brand Le L in 2019. This was a response to falling behind competitors with high-end brands in the Gangnam reconstruction market. Through this, they were able to plant their flag in the Gangnam reconstruction market with Le L Daechi, Banpo Le L, Banpo Le L 2nd Phase, and Le L Sinbanpo Park Avenue. Notably, Le L Daechi, the first to apply the Le L brand, recorded the highest subscription competition rate (212:1) among apartments sold in 2019.

This year, POSCO E&C and SK Ecoplant, which had insisted on single brands until now, launched high-end brands. These construction companies have experienced setbacks due to being outpaced by high-end brands in the fiercely competitive renewal markets of Seoul and major metropolitan cities.

POSCO E&C won the remodeling project for Hyundai Apartments in Ichon-dong, Yongsan-gu in 2020, but lost the project to Lotte Engineering & Construction, which proposed Le L, amid difficulties negotiating with the association and construction costs. SK Ecoplant was once at risk of contract termination for the Noryangjin 7 District due to difficulties applying a high-end brand, but resolved the issue by deciding to apply the high-end brand Define.

Among the top 10 construction companies, those maintaining a single apartment brand are Samsung C&T (Raemian), GS Engineering & Construction (Xi), and HDC Hyundai Development Company (IPARK). All have used their single apartment brands for over 20 years. Although there are annual rumors about these companies launching high-end brands, they state that they are not considering it at all.