Mid-sized construction companies that have been pushed out by large construction firms in the competition for maintenance projects in Seoul are now focusing on securing Seoul's Mota Town maintenance projects. Mid-sized construction firms unanimously noted that, although the scale of Mota Town is smaller than general redevelopment projects, it offers the advantage of accumulating performance and raising brand awareness in Seoul.

Perspective view of the street housing maintenance project in the 4·5·6 districts of Moa Town, Gocheok-dong. /Courtesy of Dongbu Corporation

According to the maintenance industry on the 2nd, Dongbu Corporation was selected as the construction company for the Mota Town street housing maintenance project in districts 4, 5, and 6 in Gocheok-dong, Guro-gu, Seoul, on the 28th of last month. After competing against Sunkyong Construction, they successfully secured the project. The total construction cost is 210 billion won, which accounts for 12.44% of Dongbu Corporation's revenue last year (1.6883 trillion won).

Mota Town is a project that integrates low-rise residential areas of less than 100,000 square meters into a single complex for redevelopment. Its strength lies in the ability to overcome the limitations of existing small-scale maintenance projects by improving the layout of buildings, road improvements, and creating urban infrastructure like communal parking lots and green spaces. The establishment of cooperatives and approval procedures have also been streamlined, shortening the average project duration from over 10 years to nearly 5 years. Incentives such as increased land use and relaxation of floor area ratios and height restrictions are also available.

Mid-sized construction companies are actively pursuing Mota Town projects. In particular, they are making efforts to secure multiple districts in one area. KOLON GLOBAL has secured all 10 districts of Mota Town in the Beondeong area of northern Seoul, creating 'Sky Town.' The Beondeong Mota Town project site is significant as it is designated as the first pilot project by the Seoul city government, where KOLON GLOBAL was the first to enter the Mota Town project.

The Beondeong Mota Town project site began construction in December of last year, three years after its selection. If the occupancy proceeds as scheduled in the first half of 2028, the maintenance project will be completed six years after its commencement. In addition, KOLON GLOBAL is focusing on Mota Town projects, having also secured construction rights for two districts in Cheonho-dong, Gangdong-gu, and three districts in Myeonmok-dong, Jungnang-gu.

DL Construction, which has been fully incorporated as a subsidiary of DL E&C, also expanded its footprint by securing districts 1, 3, and 4 in Myeonmok-dong, Jungnang-gu, starting from Myeonmok district 2 in 2022. As a result, e-Pyeonhwanseong apartments are expected to be built in the Myeonmok-dong area.

Sunkyong Construction ceded Mota Town districts 4, 5, and 6 in Gocheok-dong to Dongbu Corporation but previously secured districts 1 and 3 from among eight districts in the Siheung 5-dong area of Geumcheon-gu. They also express intent to participate in securing the remaining districts.

Recently, as large construction companies have taken up most of Seoul's maintenance projects, Mota Town has emerged as a representative alternative that realistically enables mid-sized companies to enter Seoul's maintenance business. With district areas being small, initial project costs are lower, and the high degree of publicness and policy correlation provides stable project profitability. The rapid project advancement due to factors like expedited integrated planning and public maintenance is also a significant advantage. Securing multiple districts in a particular area allows for the creation of brand towns, which can enhance brand promotional effects.

A representative from a mid-sized construction company said, 'Mota Town is less burdensome compared to general maintenance projects where large construction firms are competitors,' and added, 'Even securing small districts can provide brand promotional effects, which helps in securing projects in other areas as well. From the perspective of mid-sized construction companies, there are many positive aspects, so we will continue to put effort into securing Mota Town projects.'

Another representative from a mid-sized construction company noted, 'Since it is a project promoted by the public, it has great stability,' and mentioned, 'Its profitability is not superior to that of general maintenance projects. However, since Mota Town is a housing project, its profitability is indeed better than that of other public-based projects like SOC projects.'

However, conflicts sometimes arise among owners as small plots are consolidated for project promotion. There are also opinions that profitability needs to be supplemented through policy support. Professor Ko Jun-seok, head of the Management Research Center at Yonsei University, said, 'Since small plots are being consolidated at once, the usage areas are different for each, and thus adjustments of interests are necessary,' and emphasized, 'While this is positive in terms of continuous supply, more policy support for profitability enhancement seems necessary.'