University and Offices in the CBD Area... Vacancy-Free 'Twin City Namsan Officetel'

- Officetels with abundant tenant demand in university areas and business districts attract attention as prime investment options in the ultra-low interest rate era
- 'Twin City Namsan Officetel' forms reasonable price range near Seoul Station super transit hub... Investment inquiries pouring in

In an ultra-low interest rate era of 0.5% per annum, it is difficult to expect high returns through financial products such as savings and deposits, and with the government's successive strong regulations making additional investments in the housing market challenging, income-generating real estate is gaining attention.

Experts particularly recommend paying attention to officetels introduced in areas with abundant rental demand that can generate stable income. Representative examples include areas near universities or business districts, which have solid underlying demand from office workers and students, resulting in low vacancy rates and stable tenant and rental income. Additionally, the more abundant the rental demand, the lower the risk of price decline during recessions and the better the liquidity, which is another advantage.

Moreover, it is even better if the rental demand is doubled rather than just one. For example, Seoul’s Gwanghwamun Central Business District (CBD), one of the three major central business districts in Seoul, is densely packed with offices, providing abundant rental demand from office workers, and is also located near universities such as Kyonggi University and Sookmyung Women’s University, securing student rental demand as well.

For this reason, officetels in Seoul’s downtown area, including the CBD, can earn higher monthly rental income compared to other areas. According to the Korea Real Estate Board’s officetel monthly rent price data, as of May 2021, the average monthly rent for officetels in Seoul’s downtown area was 944,000 KRW. This is 165,000 KRW higher than the average monthly rent of 779,000 KRW for officetels in Seoul overall.

The popularity of the CBD area is also remarkable in the new sales market. In February last year, ‘Ssangyong The Platinum Seoul Station’ supplied in Jung-gu, Seoul, closed its subscription with an average competition rate of 4.2 to 1 and a highest competition rate of 91 to 1, and was fully sold out within a week of the contract start, attracting market attention.

An industry insider said, “In the CBD area, where business districts and universities are concentrated, there is not only underlying demand but also a large floating population, so steady rental yield growth can be expected. Transportation is convenient and amenities are nearby, making it an optimal area both for living and renting out,” he said.

Meanwhile, ‘Twin City Namsan Officetel,’ which is located near Seoul’s core business district CBD, universities, and offices, and has abundant underlying demand, is attracting investors’ attention.

Nearby this officetel, there is a concentration of large corporations including GS Construction, SK Telecom, and Hana Bank headquarters, as well as the CBD area, providing abundant demand from office workers seeking convenient commuting. Additionally, it benefits from demand from self-employed business owners around Dongdaemun, Myeongdong shopping town, Lotte Department Store, Shinsegae Department Store, and abundant university demand from Yonsei University, Ewha Womans University, and Sookmyung Women’s University.

As a result, ‘Twin City Namsan Officetel’ is known to have recorded a high occupancy rate over the past six years based on its strong popularity. According to occupancy rate data for this officetel, it achieved 100% occupancy within 10 months of move-in commencement and maintained a high average occupancy rate of about 96.7% for approximately four years thereafter. Especially during the economic slowdown caused by the COVID-19 outbreak, the occupancy rate of this officetel declined but quickly recovered to previous levels, demonstrating the strength of its abundant rental demand.

In particular, this officetel is highly valuable as a prime location near Seoul Station, served by four subway lines and KTX. The underground passage directly connects Seoul Station Exit 12 and the officetel, allowing fast and safe access within two minutes. Residents can conveniently enjoy multiple transportation options nearby, including Seoul Subway Lines 1 and 4, Airport Railroad, Gyeongui-Jungang Line, KTX, and the metropolitan and regional bus transfer center.

Compared to nearby properties, its reasonable price is also a reason why investors consider it a prime investment. Recently, officetels and residential hotel facilities supplied in Jung-gu and surrounding areas have been priced higher, whereas ‘Twin City Namsan Officetel’ is priced reasonably at about 200 to 300 million KRW, making it easy for both investment and actual residence.

Meanwhile, ‘Twin City Namsan Officetel,’ which offers stable rental income based on abundant underlying demand, has completed its first public sale and is currently proceeding with general sales on a first-come, first-served basis.

The promotional center is located in Yongsan-gu, Seoul.