As the reconstruction boom continues in aging apartment complexes in Seoul, a large-scale project focusing on remodeling is gaining attention. The 'Uguksin' complex, which includes the Wuseong 2nd and 3rd complexes, the Geukdong complex, and the Shindong-A 4th complex in the Dongjak district near Isu Station, has opted for remodeling to improve living conditions and enhance property value, given the high existing floor area ratio that complicates expansion through reconstruction.
According to the construction industry, the Shindong-A 4th remodeling association held a site briefing on July 2 to select a construction company, but only POSCO E&C attended, resulting in a failed bid. Industry insiders believe that after a re-bid, there is a high likelihood of signing a contract with POSCO E&C.
While reconstruction is the preferred method in Seoul's maintenance project market, complexes with high existing floor area ratios struggle to secure sufficient units for general sale, making the projects less viable. This challenge is part of the reason why Uguksin has chosen remodeling over uncertain reconstruction.
POSCO E&C was previously selected as the construction company for the Wuseong 2nd and 3rd complexes and the Geukdong complex. If POSCO E&C is also awarded the Shindong-A 4th project, it could lead to the development of a 'The Sharp' brand town with around 5,000 units in the Sadang-dong area.
The Uguksin remodeling project gained momentum in 2020 with the push for integrated remodeling. The Wuseong 2nd and 3rd complexes and the Geukdong complex, built in 1993, have existing floor area ratios of 248% to 252%. This is close to the upper limit of 250% for general residential areas, making it difficult to significantly increase units through reconstruction.
Remodeling involves maintaining the existing structure while expanding horizontally and vertically, which allows for a slight increase in the number of units and improvements to the living environment. Although it may not enhance project viability as much as reconstruction, it can serve as a practical alternative for aging complexes with high floor area ratios, reducing the long-term duration of projects.
The scale of the project is substantial. The Wuseong 2nd and 3rd complexes and the Geukdong complex are expected to increase from 3,485 units to around 3,987 units after remodeling. The Shindong-A 4th complex is projected to grow from 912 units to approximately 1,048 units. Including the Shindong-A 5th complex, a large-scale remodeling project with over 5,000 units will be formed in the Sadang-dong area.
Improving parking conditions is also highlighted as a key benefit of the project. The existing parking facilities for the Wuseong 2nd and 3rd complexes and the Geukdong complex have 2,233 spaces, averaging 0.64 spaces per household. POSCO E&C plans to expand this to 5,584 spaces, increasing the average to about 1.4 spaces per household, nearly 2.5 times the current capacity.
The location also offers competitive advantages. The area provides access to subway lines 4 and 7 at Isu Station and has excellent connectivity to Gangnam. Vehicle access via Dongjak-daero and Sadang-ro is also convenient. According to the Ministry of Land, Infrastructure and Transport's real transaction disclosure system, a 60-square-meter unit in the Wuseong 2nd and 3rd complexes recently sold for around 1.3 billion won, while an 84-square-meter unit in the Geukdong complex was sold for around 1.6 billion won.
A representative from POSCO E&C stated, "The Isu Geukdong and Wuseong 2nd and 3rd complexes represent the largest remodeling project in Seoul, showcasing our remodeling capabilities. We anticipate steady demand for remodeling due to the increasing number of aging multi-family housing units, especially in complexes where high floor area ratios limit the viability of reconstruction projects, making remodeling a realistic alternative."
However, some experts caution against viewing the Uguksin case as a broad recovery signal for the remodeling market. While remodeling utilizes existing structures, the costs associated with structural reinforcement, the addition of underground parking, community facility improvements, and construction of extensions can be significant. The volume of units available for general sale is also limited compared to reconstruction, which poses challenges in reducing member contributions.
Professor Ko Jun-seok from Yonsei University's Sangnam Business School noted, "Construction costs are not significantly different from those of reconstruction, yet many projects do not yield viable returns. Under similar conditions, many complexes will prefer reconstruction over remodeling."
Lee Eun-hyung, a researcher at the Korea Construction Policy Institute, added, "For complexes with high existing floor area ratios that struggle to secure sufficient viability through reconstruction, remodeling can be a practical alternative. In the future, there may be an increase in demand for so-called 'cost-effective remodeling' that improves aging facilities without significantly altering the structure."
* This article has been translated by AI.
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