‘Incheon Geomdan Seoyoung Honor City 1, 2nd Phase Commercial Complex’ Continues to Attract Attention as Prime Commercial Property in the Zero Interest Rate Era

- Last year, commercial property yields were in the 5-6% range... Investors seeking investment in a low-interest-rate era show high interest in commercial properties
- Popular for golden commercial area premium locations with abundant surrounding demand of 4,500 households
- Focus on Incheon pre-sale complexes such as Hillstate Bupyeong and Geomdan Daebang Nobleland Phase 3

As government housing regulations continue and interest rates show signs of decline, investment demand is shifting towards income-generating real estate. Among these, ‘commercial properties’ equipped with solid underlying demand, abundant foot traffic, and prime locations are gaining attention.

According to the Korea Real Estate Board, last year, the yield on collective commercial properties was 6.59%, and mid-to-large scale commercial properties recorded a yield of 6.29%. Considering that current bank deposit interest rates are at most in the 2% range, this is more than three times higher. With the recent base interest rate lowered to 0.75%, deposit interest rates are expected to fall further, drawing investors seeking alternative investment options towards commercial properties.

When investing in commercial properties, it is important to consider underlying demand and foot traffic. Having abundant underlying demand and foot traffic increases tenant demand, which lowers vacancy rates and enhances investment stability.

An industry insider stated, “As the prolonged low-interest-rate era continues, more investors are dissatisfied with bank interest alone, increasing interest in income-generating real estate. In particular, commercial properties among income-generating real estate have been proven through data to offer an annual return of over 5%, so their popularity is expected to continue as the low-interest-rate era persists.”

Meanwhile, commercial facilities that are surrounded by residential complexes and located in station areas, offering abundant underlying demand and foot traffic, are attracting public interest.

This commercial property is the Incheon Geomdan Seoyoung Honor City Phases 1 and 2, which ㈜Seoyoung Construction Plus plans to supply in April on blocks C6-3-1 and C6-2-2 of Geomdan New Town in Seo-gu, Incheon.

■ Prime ‘Commercial Facilities’ with Both Solid Underlying Demand and Foot Traffic

The Incheon Geomdan Seoyoung Honor City Phases 1 and 2 commercial properties will be located in the golden commercial district of Geomdan New Town, known as the golden block in the very center of the area. Right in front of the commercial block is a large-scale residential complex, ensuring fixed demand from the residential area. Additionally, surrounding residential complexes encircle the central commercial district, providing underlying demand of approximately 4,500 households.

The Seoyoung Honor City commercial facilities are divided into Phase 1 and Phase 2. Phase 1 commercial properties have solid demand from about 1,400 nearby households with close proximity to workplaces, and are designed with three open sides allowing free customer access to maximize foot traffic inflow. Furthermore, considering the vertical facade and terrain for excellent signage effect, the first floor is designed with high ceilings (in some areas), which is expected to attract tenant interest.

Phase 2 commercial properties are located at a golden junction connecting three large complexes and feature a unique hexagonal exterior design that differentiates them from other commercial properties. Additionally, some parts are designed as terrace-style spaces on the 7th and 8th floors, offering a wide open feel and comfortable resting areas that can be used for various purposes.

The Incheon Geomdan Seoyoung Honor City Phases 1 and 2 commercial properties are expected to enjoy a first-mover advantage by being completed early in the central commercial district of Geomdan New Town. Early occupation of the central commercial district allows securing underlying demand from residential complexes in advance, while latecomers face higher entry barriers compared to early entrants. This may limit business type choices, further increasing the merit of Seoyoung Honor City Phases 1 and 2 commercial properties.

■ Strong Future Value... Next Complex Commercial Mixed-Use Development and Incheon Subway Line 1 Geomdan Station Planned

The surrounding area also has abundant underlying demand. It holds underlying demand of about 110,000 people from the Geomdan Phase 1 pilot district and about 70,000 people from the Gimpo Pungmu and Wondang districts. Moreover, a commercial mixed-use complex called Next Complex, integrating culture, commerce, business, and residential functions, is planned to be developed nearby.

Furthermore, the Incheon Geomdan Seoyoung Honor City Phases 1 and 2 commercial properties are located in a station area near the planned Geomdan Station (tentative name) on Incheon Subway Line 1, scheduled to open in 2024, increasing the likelihood of foot traffic from numerous subway users.

Additionally, this commercial property is expected to attract further demand in the future. Located in the golden block, a core location within Geomdan New Town, which is being developed as Korea’s first smart city, the recent confirmation of the relocation of the Incheon District Court Northern Branch and the Incheon District Prosecutors’ Office Northern Branch is expected to increase demand for commercial facilities.

A sales official said, “There is already significant interest simply because the location is in the prime golden block of Geomdan New Town, and inquiries continue due to the expectation of a first-mover advantage by being completed early in the new town’s central commercial district. Surrounded by residential complexes and located in a station area, abundant underlying demand is expected, making this a commercial facility that will dominate the market.”

Meanwhile, the Incheon Geomdan Seoyoung Honor City Phases 1 and 2 commercial properties are located in Incheon, a non-regulated area that has escaped government regulations and is popular in the real estate market. The government’s February 20 real estate measures designated areas such as Suwon Yeongtong-gu, Gwonseon-gu, and Jangan-gu as regulated areas, binding about 70% of the Seoul metropolitan area municipalities.

As a result, many complexes in Incheon are currently being sold or are about to be sold, including ‘Geomdan New Town Daesung Berhill,’ ‘Geomdan New Town Woorim Eco View,’ ‘Geomdan Daebang Noble Land Phase 3,’ ‘Hillstate Bupyeong,’ ‘Hillstate Songdo The Sky,’ and ‘Gyeyang Seohae Grandble The Terrace.’

The model house for Incheon Geomdan Seoyoung Honor City Phases 1 and 2 commercial properties is located at 1028-4 Dangha-dong, Seo-gu, Incheon.