As the reconstruction boom continues among aging apartment complexes in Seoul, a large-scale project that has boldly chosen remodeling is gaining attention. The Ugeuksin complex (comprising the Woosung 2nd and 3rd complexes, the Geukdong complex, and the Shindong-A 4th complex) in the vicinity of Isu Station in Dongjak-gu is a prime example of this trend, opting for remodeling to improve living conditions and enhance property value due to the high existing floor area ratio that complicates expansion through reconstruction.
According to the construction industry on July 12, 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 entering into a contract with POSCO E&C.
While reconstruction is the preferred method in Seoul's redevelopment market, complexes with high existing floor area ratios struggle to secure sufficient units for general sale, making them less viable. This is part of the reason Ugeuksin has opted for remodeling instead of vague reconstruction plans.
POSCO E&C was previously selected as the construction company for the remodeling of the Woosung 2nd and 3rd complexes and the Geukdong apartment. If POSCO E&C also takes on the Shindong-A 4th complex, it could lead to the establishment of a 'The Sharp' brand town with around 5,000 units in the Isu area.
The Ugeuksin remodeling project gained momentum in 2020 with the push for integrated remodeling. The Woosung 2nd and 3rd complexes and the Geukdong apartment, completed 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 the number of units even if reconstruction is pursued.
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 is challenging to enhance project viability to the same extent 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 also significant. The Woosung 2nd and 3rd complexes and the Geukdong apartment are expected to increase from 3,485 units to around 3,987 units after remodeling. Plans are underway to increase the Shindong-A 4th complex 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 Isu area.
Improving parking conditions is also highlighted as a key benefit of the project. The existing parking facilities for the Woosung 2nd and 3rd complexes and the Geukdong apartment have 2,233 spaces, averaging 0.64 spaces per household. POSCO E&C has proposed expanding the parking spaces to 5,584, increasing the average to 1.4 spaces per household, approximately 2.5 times the current capacity.
The location also offers competitive advantages. The area is accessible via subway lines 4 and 7 at Isu Station, providing excellent access to Gangnam. Vehicle movement is also convenient through Dongjak-daero and Sadang-ro. According to the Ministry of Land, Infrastructure and Transport's real transaction disclosure system, a 60-square-meter unit in the Woosung 2nd and 3rd complexes recently sold for around 1.3 billion won, while an 84-square-meter unit in the Geukdong apartment was traded for around 1.6 billion won.
However, some experts caution against viewing the Ugeuksin case as a signal for a broader recovery in the remodeling market. While remodeling utilizes existing structures, the costs associated with structural reinforcement, the construction of underground parking, community facility improvements, and expansion can be significant. The limited number of units available for general sale compared to reconstruction also limits the ability to reduce member contribution fees.
Go Jun-seok, a professor at Yonsei University's Sangnam Business School, stated, “Construction costs are not significantly different from those of reconstruction, but many cases do not yield viable projects. Under the same conditions, many complexes will prefer reconstruction over remodeling.”
Lee Eun-hyung, a researcher at the Korea Construction Policy Research Institute, noted, “For complexes with high existing floor area ratios that struggle to secure sufficient project viability through reconstruction, remodeling can be a realistic alternative. In the future, there may be an increase in demand for so-called 'cost-effective remodeling' that improves aging facilities without making significant structural changes.”
* This article has been translated by AI.
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