[Exclusive] Daewoo Construction Enters 'Daycare Center' Business... Construction Companies Targeting Seniors

Arrival of Super-Aged Society Next Year
Daewoo E&C Establishes Corporation Related to Daycare Centers
Expanding Daycare Center Market Share
Senior Services as Core Business

Construction Companies Expanding Senior Business Areas

On the 6th, elderly people are engaged in crafting activities at the Gireum Daycare Center in Seongbuk-gu, Seoul. Photo by Kang Jin-hyung

Daewoo E&C is entering the so-called ‘No(老)chiwon’ daycare center business. As the construction industry expands its senior business sector, led by senior welfare housing projects, ahead of the country’s entry into a super-aged society early next year, Daewoo E&C is the only construction company to throw its hat into the daycare center arena.

Daewoo E&C Plans to Open 'Daycare Centers' Starting Next Year

According to industry sources on the 18th, Daewoo E&C will establish a corporation dedicated to the daycare center business next year and take its first step into the market. The related work is led by the in-house New Growth Strategy Team, which is currently reviewing locations for operating daycare centers. Daewoo E&C selected ‘Life Care (Lifetime Care)’ as a new growth engine this year. Since then, it has been preparing to enter the daycare center market to verify the potential of nursing and care service businesses. The company aims to expand its market share of daycare centers mainly in urban areas by 2027 and to grow senior services into a core business starting in 2028.

A daycare center is a daytime care facility where elderly people stay and receive care. It is mainly used by long-term care recipients with mild dementia or senile diseases who have care grades, or by late elderly people aged 75 and older. Elderly individuals who are physically unable to visit senior centers spend time here participating in programs such as dementia prevention activities and exercise. As the elderly population increases explosively, the number of daycare centers should also grow, but the market is still in its infancy.

According to statistics from Seoul City, as of October this year, there are a total of 477 daycare centers across 25 districts. The total capacity is 15,586 people. This can only accommodate 2% of Seoul’s elderly population aged 75 and older (736,000 people). An industry insider said, "When a daycare center is established in a neighborhood, it is sometimes viewed negatively, but if a large corporation that can guarantee the quality of facilities and services enters the market, this perception will begin to change." He added, "Construction companies that can find good locations and have design capabilities that consider the lifestyle of the elderly will have a competitive edge."

In addition to the daycare center business, Daewoo E&C is also responsible for constructing Baegun Lake Prugio, a senior welfare housing complex in Uiwang, Gyeonggi Province.

Construction Companies Entering Senior Welfare Housing

Other construction companies, including Lotte Engineering & Construction, Hyundai Engineering & Construction, HDC Hyundai Development Company, and HanmiGlobal, have also entered the senior welfare housing business.

Lotte E&C built 'VL Le West,' a senior residence in Magok-dong, Gangseo-gu, Seoul, with move-in planned for October next year. Hyundai E&C will begin construction next month on 'Eunpyeong Senior Residence' in Jingwan-dong, Eunpyeong-gu, Seoul. HDC Hyundai Development Company plans to build a ‘Wellness Residence’ as part of the ‘Seoul Kwangwoon University Station Area Complex Development Project.’ HanmiGlobal has completed ‘Wirye Symphonia’ in Jangji-dong, Songpa-gu, Seoul, with move-in scheduled for March next year.

Wirye Symphonia Rendering (Photo by HanmiGlobal)

The construction industry has ventured into the senior housing business anticipating a sharp increase in demand due to aging. According to the Ministry of Health and Welfare’s ‘2024 Senior Welfare Facilities Status,’ there are a total of 40 senior welfare housing facilities in Korea, with a capacity of 9,006 people. An industry insider said, "In an era of 10 million elderly people, the capacity of senior welfare housing is still less than 10,000, which is the reality," adding, "This market will grow in the future."

However, a limitation is that most senior welfare housing currently built by construction companies are premium facilities with monthly rents ranging from 5 to 6 million KRW. There is a need for more affordable senior welfare housing for the middle class with lower economic power. KB Pyeongchang County, targeting middle-class seniors, is a representative example. Yubokjae, Head of Operations at KB Golden Life Care, said, "In the future, practical senior welfare housing with lower prices than existing premium senior housing and only essential facilities should be created so that middle-class seniors will have places to go."