Ryu Jun-yeol, 4 Billion Won Profit with 90% Loan... Real Estate Speculation Allegations

[Image source=Yonhap News]

[Asia Economy Reporter Lee Iseul] Actor Ryu Jun-yeol has come under scrutiny for potential real estate speculation after it was revealed that he built a small building in Gangnam and immediately resold it, earning a capital gain of 4 billion KRW.

On the 24th, entertainment media Dispatch reported that Ryu Jun-yeol purchased land in Yeoksam-dong, Gangnam-gu, Seoul in 2020 under a personal corporation's name for 5.8 billion KRW. The corporation was established in March 2018, with Ryu Jun-yeol's mother registered as the representative.

Ryu Jun-yeol bought an 83-pyeong (approximately 274.4㎡) site for 5.8 billion KRW, borrowing 5.2 billion KRW from a bank, which is 90% of the purchase price. Afterwards, he took out another loan under the pretext of construction funds.

After acquiring the land, Ryu Jun-yeol demolished the existing single-story building and constructed a new building with two basement floors and seven above-ground floors. The total floor area is 1,013.35㎡ (306.54 pyeong), and the construction cost was approximately 2.4 billion KRW, calculated at 8 million KRW per pyeong. During this process, Ryu Jun-yeol covered about 70% of the construction cost, roughly 1.7 billion KRW, through loans.

The building was completed in November last year, and Ryu Jun-yeol immediately put it on the real estate market. Last month, the sale was finalized at 15 billion KRW, resulting in a post-tax profit of 4 billion KRW.

It has been pointed out that obtaining loans through a suspected paper company and then constructing a new building to gain capital gains is a typical form of speculation.

His agency, C-JeS Entertainment, explained, "The corporation was established for managing personal income," and added, "We planned and held photo exhibitions, among other events."

Regarding the building purchase, they explained, "We had planned a clothing business with friends, but due to COVID-19, it was put on hold, and the decision was made to sell the building."