Kukdong Engineering & Construction and Namkwang Engineering & Construction have formalized a plan to actively take part in Seoul-area maintenance projects ahead of their 80th founding anniversaries next year. The two companies recently threw their hats into the ring for major maintenance sites in Seoul, signaling their intention to foster the dwellings institutional sector as a strategic business.
According to each company on the 12th, Kukdong Engineering & Construction bid on the 9th for the "Kukdong Riverside Small-Scale Reconstruction Project." Namkwang Engineering & Construction also formalized its participation on the 12th in the "Mapo-ro District 5, Zone 2 Urban Maintenance-Type Redevelopment Project." The two companies plan to use this participation as a springboard to expand their footing in the maintenance market in Seoul and the greater capital area.
Kang Kyung-min, head of Kukdong Engineering & Construction, said, "The maintenance market, estimated at 80 trillion won a year, is no longer optional but essential," and added, "We will demonstrate stable execution capabilities based on 80 years of construction experience and on-site management competence."
Under the judgment that structural strengthening of the dwellings institutional sector is necessary for corporations' sustainable growth, the two companies began organizational restructuring late last year. They reinforced staffing, unified the bidding and management organizations, and established a dwellings marketing team and an AM (Asset Management) team to build a system that integrates management of both companies' dwellings businesses. Internally, they have set maintenance projects as a core growth axis going forward.
The "Kukdong Riverside Small-Scale Reconstruction Project," for which Kukdong Engineering & Construction bid, is a small-scale project worth about 70 billion won. Kukdong Engineering & Construction decided on strategic participation considering the locational symbolism of securing Han River views and the potential to improve business feasibility if the floor area ratio is raised in the future.
A Kukdong Engineering & Construction official said, "It is highly symbolic for us to directly reconstruct the Kukdong Riverside Apartment, the first we built along the Han River in Gangnam," and emphasized, "This is a project that can strengthen the company's history and brand story at the same time." The association plans to hold a general meeting in mid-March to select a constructor.
"Mapo-ro District 5, Zone 2," for which Namkwang Engineering & Construction expressed its intention to participate, is a symbolic area that includes the Chungjeong Apartment, known as the first apartment in Korea. Selection of a constructor had been delayed for a long time, but momentum has recently been building to push the maintenance project forward.
A Namkwang Engineering & Construction official said, "Because the site is adjacent to our headquarters, we will approach the project with a strong sense of responsibility," and added, "We will prove we are the right partner for integrated development around Chungjeong-ro based on our experience reconstructing buildings with safety concerns and our urban maintenance know-how." As the possibility of participation by Doosan Engineering & Construction Co., which is involved in the adjacent Chungjeong-ro District 1 public redevelopment, is also being mentioned, attention is focusing on whether a competitive landscape among mid-sized builders will form.
The two companies are also moving to completely revamp their brand strategies. Judging that Namkwang's "Houstory" and Kukdong's "Starclass" are insufficient to fully reflect the market's recent demand for premiumization and differentiation, they are pursuing brand integration and renewal. They plan to unveil a new integrated brand at the end of the year to mark the 80th anniversary of their founding.
Industry watchers say, "It is highly symbolic that mid-sized builders have used their 80th anniversaries as an opportunity to reissue challenges in Seoul's core maintenance market."