Office-Type Knowledge Industry Centers Attracting Demand with Various Tax Benefits

In the untact era, knowledge industry centers, which offer relatively affordable rents along with various tax benefits, are gaining popularity.

With the noticeable increase in the establishment of related corporations due to the COVID-19 era and the real estate market boom, demand is flocking to knowledge industry centers, which have less price burden compared to offices or plaza commercial buildings, and offer many benefits such as a 50% reduction in acquisition tax, 37.5% reduction in property tax, and interest-free interim payments.

According to data released by the Ministry of SMEs and Startups, the number of corporations established from January to May this year was 53,785, a 16.47% increase compared to 46,179 in the same period last year. In particular, technology-based industries, information and communication industries, professional scientific and technical services, and real estate industries account for a large proportion, highlighting the increase in newly established corporations in untact industries during the COVID-19 era and real estate industries due to the real estate market boom.

Additionally, in May, a partial amendment to the Enforcement Decree of the Act on Industrial Cluster Activation and Factory Establishment was deliberated and approved at the Cabinet meeting, allowing e-commerce and drone-related service industries, which were previously classified as service industries and not allowed to move into industrial facility zones in industrial complexes, to now enter, thereby expanding the scope of tenants for knowledge industry centers.

An industry official explained, "Recently, as knowledge industry centers have been supplied mostly in office-type formats, most newly established corporations are looking into knowledge industry centers due to their lower price burden, and especially recently, inquiries from IT sector corporations have increased significantly due to the COVID-19 era."

In fact, knowledge industry centers have lower rents than general offices. According to a 2018 survey conducted by Real Estate 114, the average monthly rent per 3.3㎡ in Seoul knowledge industry centers was 40,000 KRW, which is only about half of the general office rent (74,000 KRW).

Furthermore, as the Ministry of the Interior and Safety extended the tax reduction benefits period for companies moving into knowledge industry centers until 2022, companies initially moving into knowledge industry centers can receive a 50% reduction in acquisition tax and a 37.5% reduction in property tax under the Local Tax Special Cases Restriction Act.

If the qualification conditions are met, corporate tax reductions and policy fund support benefits can also be enjoyed. Additionally, although value-added tax (VAT) is applied to the building portion during sale or general trade of knowledge industry centers, early refund applications or VAT settlement refunds are possible, reducing the initial burden.

Loans are also possible up to 80% of the sale price without restrictions, and the expectation of stable rental business targeting companies also contributes to the popularity of knowledge industry centers. This is due to the characteristic of companies rarely relocating once they move in.

An industry insider stated, "The number of newly established corporations is increasing annually across all age groups, including young entrepreneurs in their 20s and 30s facing employment difficulties and middle-aged entrepreneurs in their 60s due to an aging society. With knowledge industry centers emerging as niche products amid government real estate regulations, their popularity is expected to continue for the time being."

Amid this situation, D-Hub Plus Co., Ltd.'s ‘D-One City Signature’ in Gurae-dong, Gimpo-si, Gyeonggi-do, currently on sale, is attracting attention.

It is a knowledge industry center with 613 units, 97 commercial facilities, and 12 warehouses, spanning from three basement floors to ten above-ground floors. It is a new-concept knowledge industry center equipped with a one-stop complex cultural space such as ‘D-One Culture Line,’ making it an optimal investment product that perfectly combines location, product, and demand?the formula for successful real estate investment. Including the previously sold first phase ‘D-One City’ in Hangang New Town, it is the largest in Hangang New Town, with an area equivalent to 18 soccer fields.

‘D-One City Signature’ boasts a prime location near the station. It is located 350 meters from Yangchon Station (D-One City Station) on the Gimpo Urban Railway, right in front of the central commercial district where E-Mart, Lake Park, and a complex transfer center are located, making it easy to access various convenience facilities. It is also conveniently located near Gimpo International Airport, Incheon International Airport, and Incheon Port, facilitating domestic and international travel.

‘D-One City Signature’ focuses on upgrading facilities to provide tenants with a sophisticated and pleasant working environment. It is the first knowledge industry center to offer ‘concierge services’ and is equipped with various convenience facilities such as a concierge lounge, meeting rooms, healing rooms, and powder rooms (including shower facilities).

For more detailed information, consultations are available at the sales offices located at 310, B-dong, 158, Gimpo Hangang 9-ro 75beon-gil, Gimpo-si, Gyeonggi-do, and on the first floor at 4, Gyeongin-ro 102-gil, Yeongdeungpo-gu, Seoul.