Expecting Spillover Benefits for Lifestyle Lodging Facilities Amid High-Intensity Apartment Regulations

Niche Investment Products Enjoying Demand from Visitors to Major Tourist Attractions Attract Interest from Investors Avoiding Real Estate Regulations

As the government's stringent real estate regulations are expected to continue into the new year, residential-type accommodation facilities are emerging as niche products. With domestic tourist destinations gaining popularity due to COVID-19, residential-type accommodation facilities that can benefit from the demand for visits to major tourist spots are gaining traction. Additionally, as residential officetels are now included in the housing count, effectively increasing the regulatory intensity on officetels, investors seeking alternative investment options are turning their attention to residential-type accommodation facilities, which face less stringent regulations.

Residential-type accommodation facilities refer to income-generating real estate products that began to be actively supplied after being included in the Enforcement Decree of the Public Health Control Act revised in 2012. Legally, they are the same as general lodging facilities, allowing guests to sleep and stay overnight. Unlike general lodging facilities, they have the advantage of allowing cooking. These residence-type lodging facilities offer hotel-level living with cooking facilities, attracting tourist demand with excellent amenities. From an investment perspective, they are free from acquisition tax surcharges and holding tax burdens, and do not require subscription savings accounts. Furthermore, unlike residential facilities such as apartments or officetels, they are free from loan restrictions and can be resold immediately after purchase.

In fact, residential-type accommodation facilities performed well in last year's sales market. In September last year, Hyundai Construction's 'Hillstate Songdo Stay Edition' in Songdo, Incheon, received 65,498 applications for 608 units, achieving a high competition rate of 107.7 to 1 on average. Additionally, in August, Daewoo Construction's 'Pyeongchon Prugio Central Park' in Pyeongchon, Anyang, recorded an average competition rate of 121 to 1 in subscriptions. These results are analyzed as a shift of demand to residential-type accommodation facilities amid ongoing apartment regulations.

A real estate official stated, "Since high-intensity housing regulations will continue this year, income-generating real estate such as officetels and residential-type accommodation facilities, which are exempt from these regulations, will benefit. In particular, investors are flocking to residential-type accommodation facilities, which are freer from regulations than officetels. Located in major tourist destinations, these facilities are equipped with hotel-level living support services and diverse community amenities, not only absorbing tourist demand but also serving as villas where people can escape the stifling daily life in the city. This has attracted attention not only from investors but also from asset owners."

Meanwhile, the residential-type accommodation facility 'Sihwa MTV WAVE M' to be built in Sihwa MTV (Multi-Techno Valley) is attracting investors' interest due to its excellent future value and freedom from regulations.

'Sihwa MTV WAVE M,' which combines the advantages of hotels, apartments, and officetels, holds high value as a niche product in regulatory gaps. It does not require a subscription savings account, is exempt from comprehensive real estate tax, is not subject to housing-related regulations such as the one household two houses rule, and has no resale restrictions. It is expected to gain popularity as a niche investment product relatively free from various real estate regulations.

Moreover, unlike existing residential-type accommodation facilities that have caused many victims related to profit payments, 'Sihwa MTV WAVE M' plans to pay actual payments (profits) to purchasers through precise calculations of room sales revenue, management fees, consumables, and consignment fees via collaboration among the developer, entrusted operator, and marketing company.

'Sihwa MTV WAVE M' is scheduled to be built on Turtle Island in Sihwa MTV. Comprising East and West sections, 'Sihwa MTV WAVE M' will consist of a total of 446 residential-type accommodation units (284 units in 3BL, 162 units in 2-1BL) and neighborhood living facilities. The residential-type accommodation will include long-term stay residential lodging (residences) and lodging-type residential lodging. In particular, the lodging-type residential lodging will be operated by a specialized management company in a hotel-style manner, enabling it to absorb visitor demand from Sihwa MTV, which is gaining attention as Korea's premier marine leisure tourism complex, thus attracting strong interest from investors.

In addition to luxurious premium life rooms, the facility will feature diverse community amenities such as an infinity pool, fitness facilities, and a kids' play park, making it a top destination for family tourists. It also boasts a waterfront location with ocean views from every floor, raising expectations as a marine tourism landmark representing Korea.

Furthermore, 'Sihwa MTV WAVE M' offers excellent location conditions. Situated in the Sihwa Lake waterfront living zone, it provides superior comfort and openness. As a marine leisure complex city, several developments are planned, enhancing its future value. Additionally, with the expansion of road and rail networks including the Second Outer Ring Road, it will be accessible within an hour from all areas of the metropolitan region, ensuring excellent transportation conditions.

Meanwhile, the promotional center for 'Sihwa MTV WAVE M' is located in Siheung City, Gyeonggi Province, near the project site.