Input 2021.01.15 11:00
Out of the total 27642 apartments sold in Seoul in 2019, the share of the 10 largest construction companies was 2,372, or 73.6%. While the total pre-sale volume in Seoul has decreased, the pre-sale by large construction companies has rather increased, and the proportion has increased by 13.2 percentage points in one year.
The majority of mid-sized and small-sized construction companies were small complexes. Mid-sized and small and medium-sized construction companies sold 1,657 households over two years, and 33 out of 37 sold-out complexes were small complexes with less than 500 households. There were also 16 mini complexes with less than 100 households.
Samsung C&T (Raemian), Hyundai E&C (Hillstate·DH), DL&C (ePyunhansesang·Acro), POSCO E&C (The Sharp), Daewoo E&C (Prugio·Summit), Hyundai Engineering (Hill State), Lotte E&C (Lotte Castle, Le-L), HDC Hyundai Industrial Development (I-Park), SK E&C (SK View), Hanwha E&C (Forena), and Lakeside Construction (Verdium, Lakeside Summit).
Their greatest strength is the luxury apartment brand. Due to the characteristics of Seoul, where the proportion of reconstruction and redevelopment is high, construction companies are fiercely winning orders for their members. When the moment of final competition comes, brands often end up winning or losing. Brands with good images are the driving force behind orders.
An official from one of the top ten construction companies said, “There are many cases where the apartment price varies by several billion won after completion, depending on which brand you wear.” “From the standpoint of members, where the apartment is the largest asset, in the end, “The reason I have no choice but to throw votes.”
This phenomenon is expected to continue in the pre-sale market this year. Lotte E&C, Hyundai E&C, Daewoo E&C, and HDC Hyundai Industrial Development consortium won an order for the Dunchon Jugong reconstruction project last year with a scale of 12,032 households. Samsung C&T won the Dogok Samho reconstruction project (308 households) following Raemian Won Bailey (2990 households). Daewoo E&C won an order for Heukseok 11 District (1509 units) on the 4th, and on the 10th, it was selected as a contractor for Sanggye District 2 (2200 units) by a consortium with Dongbu Construction.
Mid-sized and small and medium-sized construction companies are especially concerned that the 10 largest construction companies will take over the public redevelopment and reconstruction projects, which are expected to begin to stand out in Seoul this year. This is because it made it possible to select a brand for a group 1 construction company in order to increase business participation. In the past, brands such as SH and LH were often launched.
An official from a mid-sized construction company said, “We achieved 1 trillion won in orders this year, but there are few private houses in the metropolitan area, and most of them were public housing orders.” It is unclear whether it can be maintained.
Another middle-sized construction company official said, “There is no reason to participate in a few weeks before spending a small amount of marketing expenses in a situation where it is obvious who will lose by voting.”
Sim Gyo-eon, a professor of real estate at Konkuk University, said, “The construction company of District 1 will continue to build landmark new apartments such as’Raemian One Bailey’ and’Seocho Granzai’, and use them as billboards to solidify market dominance. “The polarization phenomenon of being culled into an’old apartment brand’ will spread across the country as the proportion of new construction companies is reduced,” he said.
Go Jong-wan, head of the Korea Asset Management Research Institute, said, “If you allow the use of the contractor’s brand in existing LH and SH public housing, it will help small and mid-sized construction companies to increase their brand power.” When forming a consortium with construction companies, it is necessary to introduce preferential policies such as giving additional points.”