Lotte Construction plans to sell units in a knowledge industry center in the Magok-dong area of Seoul in May. This is the first knowledge industry center directly developed and constructed by Lotte Construction. Recently, both actual demand and investment demand have been pouring into Gangseo-gu, where apartment price increases were relatively modest even during last year's Seoul apartment price surge. Amid increasing investments from non-locals, record-high price rallies continue, especially centered around the Magok district.
According to the Korea Real Estate Board on the 13th, in March, there were a total of 77 transactions by non-locals (residents outside Seoul) in Gangseo-gu, the highest among Seoul's 25 districts. Transactions by non-locals accounted for 29.2% of the total transactions (263) in Gangseo-gu.
Prices have also been rising sharply this month. On the 4th alone, 16 record-high transactions were made, followed by 14 on the 7th and 15 on the 11th. For example, a 114.98㎡ (exclusive area) unit in Magok M Valley Complex 6 was traded at 1.28 billion KRW in December last year but jumped to 1.65 billion KRW in April this year. Another unit of 84.99㎡ in the same complex was contracted at 1.155 billion KRW in November last year and rose to 1.45 billion KRW in April.
Apartment prices in the Yeomchang-dong area are also showing strength as buying demand continues. For instance, a 84.87㎡ unit in Dong-A 3rd Complex in Yeomchang-dong surpassed 1 billion KRW for the first time in December last year and set a new record high at 1.08 billion KRW in March this year.
The share of transactions in Gangseo-gu within Seoul is also increasing. Despite an overall sharp decline in Seoul's total transaction volume due to the holding back of listings caused by the upcoming June capital gains tax hike, Gangseo-gu's absolute transaction volume has decreased but its transaction share has actually risen. The share of Gangseo-gu in Seoul's total apartment sales transactions increased from 5.6% in January to 6.96% in April.
The upward trend in Gangseo-gu is analyzed to stem from the fact that its prices rose relatively less compared to other Seoul districts last year. According to KB Real Estate, apartment prices in Gangseo-gu rose 13.26% over the past year, which is a smaller increase compared to Nowon-gu (22.29%), Dobong-gu (15.48%), Gangbuk-gu (17.29%), and Guro-gu (16.85%).
The Magok district is leading the rise in Gangseo-gu. It is particularly noted as a large-scale newly built residential complex with close proximity to workplaces. Currently, many large corporations such as Lotte, LG, Kolon, and Nexen are located in Magok, and by 2022, approximately 160,000 employees are expected to complete moving in. The Magok area is served by Magoknaru Station on Line 9 and the Airport Railroad, Sinbanghwa Station on Line 9, and Magok Station on Line 5.
Experts also foresee further price increases due to the large-scale MICE (Meetings, Incentives, Conferences, and Exhibitions) development benefits in Magok. According to Seoul Housing and Communities Corporation (SH Corporation), the Magok MICE complex development, for which the Lotte Construction consortium was selected as the preferred negotiator, is a large-scale project on an 82,724㎡ site that will include a convention center, hotel, and cultural assembly facilities. In the CP4 block of the special planning zone within the district, the Taeyoung Construction consortium is promoting the construction of mixed-use facilities including offices, commercial spaces, and hotels.
Both inside and outside the district, construction of officetels and knowledge industry centers is active. Lotte Construction plans to launch sales of a knowledge industry center near Magok this month. This knowledge industry center will consist of 281 units and 22 support facilities, with a total floor area of about 30,000㎡, spanning from 5 basement floors to 12 above-ground floors. It is within walking distance of Yangcheon Hyanggyo Station on Line 9 and accessible to Magoknaru Station, a transfer station between Line 9 and the Airport Railroad.
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