Downtown Officetels Embracing Commercial Areas... Standing Out with High Residential Convenience

In the officetel sales market, locations adjacent to major commercial districts are recognized as equally important as those near subway stations. Especially in the metropolitan downtown area, as more people seek residential officetels instead of apartments for actual living purposes, new officetels in areas with well-developed commercial districts and high convenience are gaining popularity.

In the metropolitan downtown area, the supply of new apartments is low compared to demand, loan regulations targeting apartments are strict, and the cutoff scores for subscription points are soaring, making the chances of winning low. As a result, more people are turning to officetels as an alternative, and among downtown areas, officetels located in places with developed commercial districts that offer high convenience for actual residence are attracting attention.

In fact, last year, officetel complexes adjacent to major commercial districts in the metropolitan downtown area showed excellent sales performance. According to the Korea Real Estate Board’s Subscription Home, ‘Hillstate Cheonggye Central’ in Jung-gu, Seoul (scheduled for move-in in May 2024) recorded an average competition rate of 12.72 to 1 and sold out all units. Geographically located at the center of Seoul, it is situated in the middle of Hwanghak-dong Kitchen and Furniture Street, a designated specialized street with a developed commercial district, and is connected to the already active Seoul Central Market commercial area.

‘e-Pyeonhansesang City Bupyeong Station’ in Bupyeong-gu, Incheon (scheduled for move-in in August 2023) achieved an average subscription competition rate of 7.47 to 1, successfully selling out despite being the largest officetel in Bupyeong with over 1,000 units. Near Bupyeong Station where the complex is located, a large-scale commercial district gathers, allowing easy access to shopping and convenience facilities such as Lotte Mart, Bupyeong Station underground shopping mall, 2001 Outlet, and Moda Department Store.

‘Hwaseo Station Prugio Briciel’ in Jangan-gu, Suwon-si, Gyeonggi Province (scheduled for move-in in September 2023) attracted attention by closing with a high average competition rate of 31.44 to 1. Nearby are Lotte Department Store, Lotte Mart, and AK Plaza, and the Daeyupyeong district where this officetel is located is expected to see further activation of the commercial district as the large commercial facility ‘Starfield Suwon’ (scheduled for 2024) received its building permit in December last year.

As such, even within the metropolitan area, regions with developed commercial districts have well-equipped infrastructure such as residential products and convenience facilities, attracting high popularity among subscribers.

An industry insider said, “There are many people who want to live in the metropolitan downtown area, but with high apartment prices, scarce jeonse (long-term lease) listings, and strengthened loan regulations, it is becoming increasingly difficult to own a home.” He added, “As it becomes difficult for buyers to purchase new apartments, demand naturally shifts to officetels offered in downtown areas, and when the complex is located near a developed commercial district, it records subscription success based on expectations of high residential convenience.”

Hyundai Construction will sell the residential officetel ‘Hillstate Jangan Central’ in the Dongdaemun-gu area of Seoul this April. It consists of a total of 369 units ranging from 38 to 78 square meters in size, spanning from 6 basement floors to 20 above-ground floors. Located in the main commercial area of Dongdaemun-gu, a downtown district, it is surrounded by abundant living infrastructure. Within walking distance are the Art Malling Jangan branch complex shopping mall and Lotte Cinema Jangan branch, as well as various convenience facilities such as Lotte Department Store Cheongnyangni branch, Samyook Seoul Hospital, and Homeplus Dongdaemun branch.

A sales official stated, “Recently, as Seoul’s jeonse prices have risen and the supply of new units has decreased, there has been a noticeable increase in young generations seeking residential officetels.” He added, “The residential officetels sold recently in Seoul have continued to sell out and have shown vertical price increases, proving the popularity of residential officetels in Seoul.”