쌍용건설

South Korea’s largest-ever apartment remodeling project was in full swing with a business model of construction management (CM) for the first time in the country.

Ssangyong Engineering & Construction Co. announced it has recently signed a CM agreement to remodel 3,870 homes of an apartment complex in Suwon, Gyeonggi province. The Dongshin Apartment Complex in Jeongja-dong of Suwon was built in March 1987.

Under the agreement, Ssangyong Engineering will play two roles (as manager and builder) for the apartment remodeling project. The agreement calls for Ssangyong Engineering to set up plans, draw initial designs and help residents of the apartment complex in administrative work for bids to other builders and service companies. Ssangyong Engineering is also required to carry out work in civil engineering, construction, electricity and gardening. In addition, Ssangyong Engineering will help the residents get government approval for the project and persuade a majority of the residents to vote for the project.

As a matter of fact, a remodeling project for such a large-scale apartment complex is difficult because it isn’t easy to win support from a majority of residents. So, the CM business model, which allows a construction company to confirm designs with the residents’ agreement and later to pick the company as a builder, was drawing keen attention amid expectations that it would set a precedent in the construction industry.

From the viewpoint of the residents, the CM business model was expected to satisfy them in terms of both quality and price because it allowed them to confirm designs and then choose a builder through a public tender. So, the business model offers optimal designs and the least costs for a remodeling project.

For a builder, the CM business model helps save advertising costs and allows the construction company focus on price and technology because it lets the builder join a public tender based on fixed designs.

“Residents have high expectations for the remodeling project, as last year’s survey of 54 percent of the residents showed 96 percent of them supported the project,” said Oh Jeong-ho, 43, head of the remodeling project committee of the Dongshin Apartment Complex. “Previously, we had met builders, but most of them demanded rights to guarantee special treatment in the project. So, we weren’t confident.

However, we signed the agreement with Ssangyong Engineering & Construction because we concluded that the CM business model was appropriate to the large-scale apartment complex.”

“The floor space index of Dongshin Apartments has already reached at 250 percent. So we have pushed for the remodeling project, not reconstruction,” Oh said. “This apartment complex shows an emergence of two different markets for reconstruction and remodeling each.”

Meanwhile, Ssangyong Engineering have signed business agreements with Woosung Apartments in Yeomchang-dong (196 homes) and Shindongah Apartments in Daerim-dong (591 homes). In January, Ssangyong Engineering was chosen as a builder of a remodeling project for the Samick Garden Apartments (768 homes) in Myeongil-dong. So far this year, Ssangyong have won remodeling orders worth some 790 billion won (US$790 million) for a total of 5,425 homes.

In addition, Ssangyong Engineering successfully completed a remodeling project for Ssangyong Yega Classic Apartments in Bangbae-dong, which gained attention because it was the nation’s first project to remodel an entire apartment complex. Ssangyong Engineering enhanced its status as an industry leader by opening an exhibition center for remodeling nearby Garak-dong for the first time in the country.