The "major renovation" market, which upgrades aging apartment complexes without expansion while preserving their existing structures, is drawing attention. Its advantages include simpler permitting procedures than reconstruction or expansion-type remodeling, while still securing the new-build brand value of major builders. Last year, Samsung C&T (028260) and Hyundai Engineering & Construction (000720) launched "Next Remodeling" and "The New House," respectively, moving to seize market share. With no precedents yet, however, attention is turning to whether major renovation can establish itself as a new redevelopment model.
According to the redevelopment industry Wednesday, cases are emerging in which complexes that had been pursuing expansion-type remodeling are considering switching to major renovation. The biggest reason is the shorter construction period. The "Seocho Raemian" complex in Seocho-gu, Seoul, had been pursuing expansion-type remodeling in 2022 before the project stalled, but found a breakthrough last year by signing a Next Remodeling partnership with Samsung C&T. After selecting a design firm and a redevelopment contractor last month, Samsung C&T and the promotion committee plan to hold a joint residents' briefing on September 5 to present the concept plan, followed by a full-scale collection of consent forms.
"With a floor-area ratio reaching 320%, it was difficult to pursue reconstruction again," said Choi Hyuk-jun, chairman of the remodeling promotion committee. "Expansion-type remodeling can mean a longer permitting period, but the strength of major renovation is that it can be pushed forward quickly by shortening the overall project period."
The "Yeoksam Kumho Eoulim" complex in Gangnam-gu is also shifting toward major renovation. An official from the remodeling promotion committee said, "The shorter construction period is the biggest reason." The official added, "The consent rate for establishing the union is currently around 50%, and many residents say they intend to make decisions in earnest after the Next Remodeling briefing to be held in July or August, so expectations are high."
Major builders are also busy moving to seize market share. After establishing Next Remodeling partnerships with 12 complexes nationwide last year, Samsung C&T was selected in March as the preferred negotiating partner for the remodeling project of "Banpo Prugio" in Seocho-gu, expanding its footing. Choi Moon-young, chairman of the Banpo Prugio remodeling union, said, "We are currently preparing to select a construction company." He added, "In an era when new builds are in the spotlight, we judged that a method that reduces cost burdens while allowing the project to proceed quickly is appropriate."
Hyundai Engineering & Construction has also selected "Samsung Hillstate Complex 2" in Gangnam-gu as the first complex to apply The New House, delivering a project proposal, and held a residents' briefing at "Lotte Castle Classic" in Seocho-gu last Friday, accelerating its business expansion.
Experts cite reaching consensus among residents as the key challenge. Yoon Su-min, a real estate specialist at NH NongHyup Bank, said, "Major renovation can be carried out while residents continue living there, and the permitting process is simple, so it can be pushed forward quickly." He added, "However, since there is no additional revenue through general sales, residents must bear the entire project cost, so disputes over the actual benefits could arise among residents."
