It appears that construction and implementation companies have actively responded to the senior dwelling project that the government is promoting. Amid the real estate market slump, even large firms are considering the 'senior' related business as one of their new ventures.
According to the Korea Land and Housing Corporation (LH) on the 3rd, a total of 27 companies submitted letters of intent to participate in the private rental housing (Silver Stay) pilot project, which closed on the 27th of last month. This includes 10 construction companies, 7 implementation companies, 5 financial companies, and 5 trust companies.
The construction companies that submitted letters of intent include Daewoo Engineering & Construction, GS Engineering and Construction, POSCO Engineering & Construction, BS HanYang, Kyeryong Construction Industry, Woomee Construction, Jeil Construction, Seohi Construction, E-Land Construction, and Geumseong Baekjo Housing. Among the implementation companies are Shinyoung, Hanmi Global D&I, SK D&D, Triple I&D, A&D One, Myosang Mokdong Development, and Urban Upcycling Cooperative, all of which expressed their intention to participate.
The Ministry of Land, Infrastructure and Transport and LH have selected the B2 block of the Guri Galmae station area as the first Silver Stay project site and have commenced the selection of operators. A total of 34,593 square meters of land is set to be developed into 725 housing units (with exclusive areas of 60 to 85 square meters).
Silver Stay is a project that provides long-term private rental housing for middle-class seniors aged 60 and over for more than 20 years. It features senior-friendly facilities such as anti-slip floors, no-threshold floor design, emergency contact systems, and safety handrails, along with services that support daily living such as meals, cleaning, and laundry, as well as emergency safety services. Initial rents will be set at or below 95% of the market rates for similar facilities, such as senior welfare housing. A 5% increase cap will be applied upon contract renewal.
The construction industry is showing interest in the Silver Stay project led by the government as the 'senior business' can potentially become a new source of income in the future. According to the Ministry of the Interior and Safety, as of the 23rd of last month, South Korea has entered an ultra-aged society, with the proportion of seniors aged 65 and over exceeding 20% of the resident population. However, the number of senior facilities is currently woefully inadequate. According to the Ministry of Health and Welfare, there are 93,056 senior welfare facilities nationwide, including senior welfare centers, elderly lounges, nursing homes, senior welfare housing, and elderly care facilities, which is an increase of 3,358 from a year ago, but still insufficient considering the senior population has surpassed 10 million.
A representative from a large construction company said, 'Silver Stay will be a project that attracts significant attention in the future, so we submitted a letter of intent to participate.'
A representative from an implementation company noted, 'We are also interested in the senior business, so it would be great if the Silver Stay project expands, which is why we expressed our intention to participate.'
However, there was concern that equity participation would require capital to be tied up for a significant period due to the 20-year long-term lease. Currently, the construction and implementation sectors are calling for relaxations on regulations regarding 'sale-type senior welfare housing,' but the government has decided to reintroduce sale-type senior welfare housing only in the 89 'population decline areas.'
A representative from a large construction company who submitted a letter of intent for Silver Stay said, 'There are still points to consider, such as the fact that capital must be tied up for a long time in long-term leasing,' adding that 'the final decision on participation will depend on the circumstances, as detailed matters regarding how many companies will ultimately participate have not been determined yet.'
Recently, construction companies are also making various attempts to expand their senior business independently. Daewoo Engineering & Construction is reviewing the establishment of a daycare center corporation this year. Daycare centers are facilities where seniors can stay during the day and receive care. According to the city of Seoul, there were a total of 477 daycare centers in Seoul as of October last year. Given that the majority of users are aged 75 and over, and considering that the senior population over 75 in Seoul is around 736,000, the situation is extremely insufficient.