You don't have to go wild for "new builds" supplied through reconstruction to make your home a new home. "Raemian" will lead a new phase of the maintenance business. (Park In-suk, managing director and head of the remodeling team at Samsung C&T)
Since Samsung C&T's construction division unveiled "Next Remodeling" last month, the maintenance industry's landscape has been shifting. The view is that the maintenance business, which centered on reconstruction and redevelopment, will expand into the "remodeling" business. "Next Remodeling" is a remodeling project that keeps the existing frame while renewing the interior and exterior of apartments and incorporating cutting-edge technologies such as smart home, eco-friendly materials, and an automatic parking system. It is a bold new business in the dwellings segment that Samsung C&T has rolled out.
The person who devised this business model is Park In-suk, a managing director at Samsung C&T. Met on the 1st at Samsung C&T's headquarters in Sangil-dong, Gangdong District, Seoul, Park is a veteran of construction sites in the dwellings business.
Joining the company in 1998 as one of a few women in technical roles, Park did not shy away from tough domestic and overseas sites. In 2018, she became Samsung C&T's first female site manager (Busan Oncheon District 2). She was then promoted to managing director in 2022, four years later. "Next Remodeling" is the work Park, a top dwellings expert at Korea's leading builder, put forward to lead the maintenance market going forward. She anticipated it would both calm market overheating and anxiety driven by a preference for new builds and serve as an alternative to reconstruction and redevelopment.
She said, "With the preference for new builds, home prices are overheating, and people living in older stock suffer from alienation and anxiety. While many are not yet old enough for reconstruction, there will clearly be demand in aging apartments."
"Next Remodeling" is different from the remodeling we commonly know. What we have known until now is, strictly speaking, "extension-type remodeling." It is a method of increasing the number of units by building horizontal or vertical extensions, or separate buildings. When a high floor area ratio makes reconstruction difficult, extension-type remodeling is pursued.
By contrast, "Next Remodeling" is a major-repair-type remodeling project. No buildings are added and the number of units does not increase. Yet it can create a high-end apartment unlike anything seen before. Samsung C&T has already signed agreements with 12 apartment complexes, and one of them is highly likely to become the first project site. Major complexes included are "Banpo Prugio (completed in 2000, 237 households)" and "Yeoksam Kumho Eoullim (2003, 183 households)" in Gangnam District; "Seocho Raemian (2003, 1,129 households)" and "Seocho I'Park (2003, 115 households)" in Seocho District; and "Ichon Dongbu Centreville (2001, 309 households)" in Yongsan District. Samsung C&T is also communicating with complexes that reached out after the model was unveiled. In some complexes, so-called "splitting"—dividing a large unit into two—will be possible.
Park said, "I believe the business will start in small and midsize complexes in prime locations among apartments that appeared in the 2000s, prove its effect, and then expand," adding, "I think leading a new housing culture is Raemian's social responsibility."
-How is "Next Remodeling" differentiated from existing remodeling (extension-type remodeling) and individual interior work?
"The number of apartment complexes completed since the 2000s is as large as those from the 1990s that are eligible for reconstruction. The frames of these apartments remain very solid. You can spruce up the interior through interior work, but when you open the front door and step outside, the view is the same as before. Apartments are the most significant asset in Korea, but older apartments cannot escape depreciation. The market does not recognize their value either.
Whereas conventional remodeling focused on extensions to increase the number of households, Next Remodeling centers on performance. We leave only the skeleton and replace everything, including wiring and piping. The difference lies not only in what is visible but also in the software. Even in newly built high-end apartments today, the interior is not that different from before. It is hard to price construction costs at over 10 million won per 3.3 square meters. Communities may use more upscale materials, but they are no different in terms of performance. For example, completely new approaches are needed, such as spaces that provide medical services for the elderly. Compared to machinery, it is like moving from first generation to fifth generation. It is about integrating high added value into apartments."
-How strong do you think demand will be for "Next Remodeling"?
"I think demand will start in prime locations in southern Seoul's Gangnam. The greater the price gap between older stock and new builds, the more likely people are to choose "Next Remodeling." It will vary by complex depending on the location, characteristics, and residents' needs. By so-called "customizing" it, we can reach a satisfactory level.
While preparing the business, we shortlisted complexes in prime locations where the gap between new builds and asset values is large, and came up with 130. We contacted each complex, and among them, 12 apartment residents' representative councils responded positively. The first "Next Remodeling" apartment will likely come from among these. It is also a model that can be applied to residential-commercial complexes that emerged in the 2000s."
-I'm curious about the profitability of "Next Remodeling." Can profitability be assured without additional units from extensions?
"Samsung C&T approached "Next Remodeling" from the standpoint of leading a new era in the maintenance business. You should see Raemian as launching the post–reconstruction and redevelopment maintenance model. The business will proceed through a process not much different from existing remodeling projects—obtaining owners' consent and forming a promotion committee and a cooperative association. However, because the number of units does not increase, the permitting process should not be complicated. We are planning a project period within two years.
Project costs will be covered by contributions paid by owners. Depending on the degree of remodeling, the contribution level can vary as much as needed. Samsung C&T will provide guarantees, and the project will proceed with loans or deferred-interest payment, as with existing maintenance projects. The balance will be paid upon move-in, in the same way."
-In June, Samsung C&T announced it had developed an "automatic controlled preloading method" for vertical-extension remodeling. Will you also expand extension-type remodeling?
"Yes. Extension-type remodeling mainly targets apartments completed in the 1990s. These complexes have reached the reconstruction age limit but face constraints due to the floor area ratio. Through extension-type remodeling, Samsung C&T has won seven complexes, and construction starts are planned sequentially."
-Currently, urban dwelling supply and residential environments are improving mainly through reconstruction and redevelopment. How do you see the future?
"Going forward, remodeling will become a construction company's flagship product. It is time for builders to step up to prevent the slumification of complexes that cannot be reconstructed and to improve apartment performance.
Many industrial technologies are dispersed. Among them are quite a few we want to co-work on. It is the role of large corporations to integrate them into apartments. That is how "future-type high-end" dwellings can emerge. We can apply advanced technologies across the housing industry and thereby further spur technological development."