The Korea Land & Housing Corporation (LH)'s privately participated public housing construction project ("Mincham project") that it directly implements has kicked into full gear. With the construction slump and rising construction costs increasing the risks of their own projects, builders are eyeing the more stable Mincham projects.
According to LH on the 8th, the call for private operators for the 2026 round 2-2 Mincham project, the Seouldobong 01BL, has been announced. The private estimated project cost is 590.8 billion won.
The Seouldobong 01BL project calls for building a 2,100-household multifamily housing complex on a 48,055-square-meter (14,536-pyeong) site in Dobong District, Seoul. The total public sale supply is 1,709 households. Of these, 1,242 households are 60 square meters or less, and 467 households are 60–85 square meters. The integrated public rental supply is 391 households (60 square meters or less), and this type will be offered as youth-specialized housing. LH will receive letters of commitment for project applications through the 17th and plans to wrap up the solicitation at the end of next month.
As builders have found it harder to supply dwellings by purchasing land from LH, they are showing strong interest in Mincham projects. With rising construction costs and a contraction in the project financing (PF) market, interest is growing in Mincham projects that can be carried out stably without concern over unsold units, instead of own-account projects with higher risks. In particular, LH has completely overhauled the system for calculating private operators' project costs to guarantee appropriate construction costs, enabling builders to carry out projects stably.
Accordingly, competition among builders to win Mincham projects is intensifying. Large builders are gaining extra points in the solicitation by bringing in new firms. In consideration of the possibility that Mincham projects could skew toward large builders, LH decided to grant 1 point per new firm, up to two firms, when a consortium includes new companies.
This year's first Mincham projects by LH—Osan Osan 1BL, Incheon Geomdan AA31BL, and the integrated projects Incheon Yeongjong A-57BL and A-63BL—also went to a consortium formed by DL E&C. DL E&C organized a consortium with Dongbu Corporation, Taeyoung E&C, and Geumgwang Enterprise. The projects, with private estimated costs totaling 558.1 billion won, will supply 1,697 households in total. By project district, 366 households will be supplied in Osan, 766 in Incheon Geomdan, and 565 in Incheon Yeongjong.
In particular, tier-one builders are preparing strategies that leverage their brands. Given perceptions of public housing, there had been speculation that builders might apply separate brands for Mincham projects. When GS Engineering & Construction moved last month to file a trademark application for "Xi-Ette," the rental apartment brand it introduced in 2015, talk grew among major builders that "sub-brands" might emerge.
However, since LH decided to award extra points when a "house brand" is used without discrimination in Mincham projects, industry consensus is that more builders will stick with their existing brands to win project rights. An LH official said, "In Mincham projects, we are using a method of giving extra points to builders that do not differentiate brands and use their existing brands." A representative at a major builder said, "We see leveraging existing brand power as more likely than using a sub-brand."
In the first half of this year, LH plans to solicit new Mincham projects totaling 18,000 households across 27 blocks, including Namyangju Wangsuk S-20BL and Seongdae Baseball Stadium 1BL.