Milena Traikovich has her finger on the pulse of South Korea’s most competitive markets, helping businesses navigate the high-stakes world of brand perception and lead generation. Today, she unpacks the fierce branding battles in the residential construction industry, where the name on a building can be worth more than the contract itself. We’ll explore the complex decisions builders face when their luxury brands are demanded for new projects, how a brand name translates into tangible property value, and the emergence of an “ultra-luxury” tier as companies fight to maintain exclusivity in a saturated market.
When landlords cancel multimillion-dollar contracts over brand names, as seen with firms like DL E&C and Lotte E&C, what is the step-by-step process builders use to weigh the long-term risk of brand dilution against the immediate financial loss of a project?
It’s an incredibly high-pressure calculation that pits immediate revenue against long-term brand equity. The process begins with a stark risk assessment. On one hand, you have the immediate, tangible loss of a major contract, which we saw when landlords for Heukseok Redevelopment Zone 9 walked away from Lotte E&C in 2020. On the other hand, there’s the slow, creeping risk of brand dilution. These premium brands like “Acro” or “The H” were originally conceived to justify top-tier pricing in exclusive locations like Seoul’s Gangnam District. The moment you start putting that name on a less prestigious development, you chip away at its scarcity and, therefore, its power to command a premium. The decision often hinges on whether the project’s location and scale can uphold the brand’s promise, or if caving in will set a precedent that makes it impossible to say no to the next, less-deserving project.
A recent survey indicated that over a third of adults prefer luxury-branded apartments for their upscale image. How does this perception translate into tangible property value, and what specific data can landlords present to justify demanding brands like “The H” or “Otier” for their developments?
That perception is the most powerful tool landlords have in these negotiations. The tangible value comes directly from buyer demand and willingness to pay more. Landlords can walk into a meeting and present data from the Dabang survey, pointing out that 35.4 percent of 17,100 adults surveyed are swayed by an upscale image alone. That’s a massive segment of the market that prioritizes brand prestige. They can further argue that this isn’t just about feelings; it’s tied to concrete expectations. The same survey shows buyers associate these brands with excellent design and quality materials, a factor for 25.2 percent of respondents, and superior community facilities, important to another 14.2 percent. This data allows landlords to frame their demand not as a whim, but as a market-driven strategy to maximize the property’s long-term asset value.
As more construction firms concede to landlord requests for premium brands like “De’Fine,” how can they strategically manage these top-tier names to prevent them from becoming commonplace? Could you detail some early warning signs of brand dilution that a marketing team should monitor?
Once a company starts conceding, as SK Ecoplant did with “De’Fine,” strategic gatekeeping becomes critical. The primary strategy is to anchor the brand to its original concept of geographic and architectural exclusivity. This means proactively identifying a handful of flagship projects in truly iconic locations, like those along the Han River, and making them the centerpiece of all marketing. An early warning sign of dilution is when the brand name loses its “scarcity value,” which the survey showed was a key factor for 14.4 percent of buyers. Another red flag is when the internal debate shifts from “Does this project deserve our brand?” to “Can we afford to lose this contract?” When financial desperation, rather than brand alignment, starts driving the decision, the brand is on a dangerous path to becoming just another name in a crowded market.
With GS E&C now proposing a “High-end above High-end” vision, is this merely an escalation in marketing, or a real shift in market segmentation? Please describe the practical differences in amenities, materials, or services that would define this new, more exclusive tier for residents.
It’s absolutely a strategic shift in market segmentation, born out of a marketing necessity. As the existing “high-end” brands like “The H” and “Le El” become more accessible, their exclusivity is eroding. GS E&C’s “High-end above High-end” vision for the Seongsu project is a direct response to this brand inflation. It’s an attempt to create a new, protected tier that re-establishes what it means to be truly elite. In practical terms, this new tier would have to offer a quantum leap in quality. This means moving beyond the standard premium offerings and delivering bespoke services, importing exclusive materials not seen elsewhere in the country, and designing community facilities that feel more like a private, five-star resort. It’s about creating a residential experience so unique that it justifies a new brand category altogether.
What is your forecast for the high-end apartment branding market?
I foresee a period of intense brand stratification. The current tier of “high-end” brands will effectively become the new standard for any desirable, large-scale redevelopment, losing some of the elite status they once held. In response, we will see more major builders follow GS E&C’s lead by creating “ultra-luxury” or “above high-end” brands to capture the most prestigious projects and wealthiest buyers. This will create a clearer, more defined hierarchy in the market. Landlords will continue to leverage their power to demand better branding, but the fight will shift to securing these new, ultra-exclusive names. Ultimately, the market is not just selling homes; it’s selling status, and the names on these buildings will become an even more critical symbol of that status.
