Speeding Up Gangnam and Songpa Development Projects... "Olympic-ro Jamsil Area Expected to Be the Biggest Beneficiary"

[Asia Economy Reporter Ryu Tae-min] On the 30th of last month, the groundbreaking ceremony for the Yeongdong-daero Complex Transfer Center in Gangnam-gu, Seoul, accelerated the creation of the International Exchange Complex District, known as the largest development project in the Gangnam area. This has further heightened interest in the real estate market around Teheran-ro in Gangnam-gu and Olympic-ro in Songpa-gu.

According to the Korea Real Estate Board on the 23rd, Gangnam-gu and Songpa-gu, where large-scale development projects are underway, ranked first (Gangnam-gu 5.5%) and second (Songpa-gu 5.4%) respectively in land price increase rates among Seoul’s 25 districts last year, drawing significant attention. To prevent speculative demand influx amid ongoing development expectations, Seoul City re-designated areas including Samseong-dong, Daechi-dong, Cheongdam-dong (all in Gangnam-gu), and Jamsil-dong (Songpa-gu) as land transaction permission zones.

However, this year, news directly or indirectly related to the International Exchange Complex District development continues to emerge. Unlike the Samseong-dong area in Gangnam-gu, large-scale reconstruction projects are also being promoted throughout the Jamsil area in Songpa, so interest in these regions is expected to remain strong into the second half of the year and beyond.

The most representative development project is the Yeongdong-daero Complex Transfer Center, which broke ground on the 30th of last month. The complex transfer center will have a facility area of approximately 220,000㎡, including transfer facilities and commercial spaces. Transfer facilities for GTX, subway, bus, and taxi will be located on basement levels 4 to 7, while commercial facilities will occupy basement levels 2 to 3.

The Jamsil MICE project around Jamsil Sports Complex in Songpa-gu has also gained momentum after passing the Seoul Metropolitan Council plenary session. The Jamsil MICE project, worth about 2.2 trillion KRW, is structured so that the developer bears the entire project cost and recovers the investment through operation over a certain period. According to the plan, construction will start in March 2023, with phase 1 completed by 2026 and the remaining phase 2 finished by March 2029.

The puzzle pieces of the International Exchange Complex District development are also coming together. This large-scale development connects COEX in Samseong-dong, Gangnam-gu, Hyundai Motor Group’s Global Business Center (GBC), and Jamsil Sports Complex. Covering a site area of 1.99 million㎡, this massive project involves complex interests among Gangnam-gu, Songpa-gu, Seoul City, the Ministry of Land, Infrastructure and Transport, the Ministry of Economy and Finance, and private sectors, which had caused delays. However, with the groundbreaking of the Yeongdong-daero Complex Transfer Center and acceleration of the Jamsil MICE development, a green light has been given to the project.

Alongside the Yeongdong-daero Complex Transfer Center, Jamsil MICE, and International Exchange Complex District development, the Jamsil Tourism Special Zone, which includes Lotte World Tower and Seokchon Lake, is also attracting attention. The Jamsil Tourism Special Zone covers an area of 2.31㎢ from Jamsil Lotte World to Seokchon Lake, Bangi Matgol, and Olympic Park, and was designated in 2012. It was the first special zone designated in the Gangnam area, followed by the COEX area (Gangnam MICE Special Zone) in 2014. KT Estate is developing the former KT Songpa Telephone Office site into the 'Sofitel Ambassador Seoul Hotel & Serviced Residences.' As the first domestic entry of Sofitel, the luxury brand of the French Accor Hotel Group, prime office and high-end retail facilities will also be included.

As large-scale development projects in the Gangnam area gain momentum, the Olympic-ro area in Songpa is considered the biggest beneficiary. In addition to Jamsil MICE, the reconstruction expectation has grown significantly as the Jamsil Woosung 1, 2, and 3 apartment complexes across the street received approval for reconstruction association establishment on the 11th of last month.

Kwon Il, head of the Real Estate Info Research Team, said, “With the acceleration of large-scale projects, interest is rising in the approximately 4km section of Olympic-ro from Jamsil Sports Complex to Olympic Park. The addition of office facilities through the Jamsil MICE project and the complex development of the KT Songpa Telephone Office site is expected to bring significant changes, such as an increase in office facilities similar to the Teheran-ro area in Gangnam-gu. Currently, the area is designated as a land transaction permission zone, so transactions are not very active, but over time, transactions are expected to increase again, continuing the upward trend.”