Mid-sized construction companies are strengthening their offensive of orders by using the Moatown ma..

Mid-sized construction companies are strengthening their offensive of orders by using the Moatown market as a bridgehead for entering Seoul. As competition for maintenance projects in the Seoul metropolitan area intensifies amid a slump in the local sales market, the strategy is to expand its presence in Seoul through MoTown, which has relatively low barriers to entry. Attempts to build a ‘brand town’ equivalent to a large complex by grouping small maintenance areas are also spreading.

According to the construction industry on the 15th, Dongbu Engineering & Construction posted a total of 768 billion won in orders in the Moa Housing and Moa Town projects in Seoul last year. It is the largest mid-sized construction company among the recent efforts to expand Seoul’s urban renovation projects. The representative business sites secured by Dongbu Construction last year are districts 4-6 in Gocheok-dong, Guro-gu, and districts 1-3 in the Seoksu Station area in Siheung-dong, Geumcheon-gu. It will build up to 25 floors, 10 buildings, and 647 households in Moatown in Gocheok-dong, and supply up to 15 floors, 10 buildings, and 576 households in Moatown in the Seoksu Station area.

Kolon Global, known as the “Haneulchae” brand, also won a total of 533.1 billion won in the 1st and 2nd districts of Majang-dong, Seongdong-gu, Mangwoo 5 districts in Jungnang-gu, and 3-8 districts of Myeonmok Station last year. BS Hanyang also entered the Moatown market in Seoul for the first time last year and won the right to construct the 2-1 and 2-3 districts of Myeonmok Station in Jungnang-gu. An official from BS Hanyang said, “We plan to expand our business area by continuing orders around adjacent areas this year.”

The reason why mid-sized construction companies are paying attention to Moatown is that it is a realistic passage for entering Seoul. Moatown has a relatively small size of individual business sites, which can avoid head-on competition with large construction companies, and its business speed is faster because the licensing process is simpler than that of general redevelopment. An official from Dongbu Construction said, “We are aiming to enter the Mokdong reconstruction market after laying the foundation in the southwest region with the concept of a premium residential complex tailored to the region.” BS Hanyang also said, “We plan to strengthen our position in the eastern part of Seoul based on our existing business experience.”

Another attraction is that it can create a “brand town” by continuously securing small maintenance areas with 200 to 300 households. This is because it is possible to realize a residential environment comparable to a large complex by unifying the exterior design of adjacent areas and organically designing community facilities, landscaping, and underground parking lots. An official from Kolon Global explained, “It is an opportunity to create a Haneulchae brand town in Seoul,” adding, “If we start construction of several districts at the same time, we can also expect to reduce construction costs.”

The Seoul Metropolitan Government is also speeding up the MoTown project. Moatown is a method of promoting street housing maintenance projects (Moatown) called “mini-reconstruction.” As of the end of last year, there were 307 MoA housing and MoA town businesses in Seoul, an increase of nearly 2.5 times from 2022 (124), which was the beginning of the system. The Seoul Metropolitan Government is inducing the revitalization of the project by applying deregulation such as the introduction of a correction factor for business feasibility and the extension of semi-residential areas along arterial roads and station areas. “Woody mid-sized construction companies often have reasonable construction costs and proven construction capabilities at the same time,” said Baek Joon, CEO of J&K Urban Improvement. “It is considered a stable alternative even among union members.”

[Reporter Lim Youngshin]