Remodeling Market Expected to Reach 44 Trillion Won by 2030
Remodeling Momentum Spreads to 1st Generation New Towns
Construction Companies Form Dedicated Teams and Actively Pursue Contracts
[Asia Economy Reporter Noh Kyung-jo] Construction companies that highly value the growth potential of the remodeling market are actively pursuing orders, expanding the market. In particular, Samsung C&T, which has a high brand preference in the reconstruction market, is drawing attention with its plan to expand its remodeling business.
According to the construction industry on the 30th, Samsung C&T signed a memorandum of understanding (MOU) on the 23rd with Ajou University for joint research and development of new remodeling technologies. Both parties plan to secure design capabilities that can overcome the structural limitations of remodeling, and promote research to enhance structural stability and minimize frame demolition. The developed technologies will be introduced in remodeling projects constructed by Samsung C&T.
Samsung C&T is determined to lead the remodeling market, expecting it to grow. The Korea Construction Industry Research Institute predicted that the remodeling market size will reach approximately 44 trillion won by 2030.
Currently, in the multi-family housing remodeling market, Posco Engineering & Construction is actively securing orders following Ssangyong Construction, a long-standing leader. However, based on completed complex performance so far, Ssangyong Construction and Samsung C&T share the top spot.
According to the Korea Remodeling Association, there are a total of 17 completed multi-family housing remodeling complexes, with Ssangyong Construction and Samsung C&T each having completed 4 projects. DL E&C (formerly Daelim Industrial) completed 3 projects, and Posco Engineering & Construction completed 1.
A Samsung C&T official said, "From a business perspective, remodeling has lower profitability than reconstruction but has the advantage of simpler procedures." He added, "Although remodeling has experienced ups and downs following the government's easing policies on reconstruction regulations, we believe the market will grow in the long term." They also mentioned plans to increase the proportion of remodeling projects starting next year.
For example, reconstruction is only possible for complexes over 30 years old after completion, but remodeling can be done if the complex is over 15 years old. The safety inspection grade standard for reconstruction is a D grade, whereas remodeling can proceed with a C grade or higher. Moreover, the momentum for remodeling is spreading in the first-generation new towns, which already have high floor area ratios.
Among the top 10 construction companies in construction capability evaluation, Hyundai Engineering and SK Ecoplant are also strengthening their remodeling businesses. They succeeded in securing their first solo orders this year.
Hyundai Engineering secured the remodeling project for Suji Samsung 1st Apartment in Yongin City, Gyeonggi Province, in September. At the end of last year, they upgraded their remodeling task force (TF) under the Urban Maintenance Sales Office to a "Remodeling Sales Team." SK Ecoplant also has a dedicated remodeling organization. Last month, it was selected as the contractor for the remodeling of Suji Tri?che Apartment in Yongin City.
An industry insider said, "While it is important from the perspective of construction companies' revenue sources, remodeling, which serves as an alternative to reconstruction, is also being recognized independently." He added, "Competition among construction companies for orders is expected to intensify."
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