The End of the Jeonse Era and the Dawn of the Monthly Rent Era... Residential Officetel 'Pungmu Station Prugio City' Draws Attention

- Tenants Feeling Loan Interest Burden Due to Rising Jeonse Rates Shift to Monthly Rent
- High Interest Rate Trend Expected to Continue... Growing Interest in Residential Officetels Generating Rental Income

As interest rate hikes continue, the monthly rent market is expected to remain strong. Tenants, burdened by the rising interest rates on jeonse loans, are increasingly shifting from jeonse to monthly rent.

Accordingly, interest in ‘residential officetels,’ income-generating real estate that can yield monthly rent income, is also expected to rise. Residential officetels are often purchased for actual residence but are widely used as a means to generate rental income.

In fact, according to data from the Korea Real Estate Board’s ‘National Housing Price Trend Survey,’ while the nationwide officetel jeonse price index is declining, the monthly rent price index is rising. In August this year, the nationwide officetel jeonse price index was 104.29, down 0.02% from July, whereas the nationwide officetel monthly rent price index rose 0.16% to 102.73 in August.

Notably, the monthly rent price index has been on an upward trend for 25 consecutive months since July 2020, drawing attention. By region, Gyeonggi-do saw the highest increase at 0.29%, followed by Seoul at 0.14% and Daegu at 0.12%, showing higher growth rates in the metropolitan area.

The jeonse-to-monthly rent conversion rate has also shown a stepwise increase since the beginning of the year. As of July, the conversion rate stood at 5.9%, up 0.3 percentage points from 5.6% in February.

The shift of demand from jeonse to monthly rent is attributed to the steep rise in jeonse loan interest rates, which has removed tenants’ incentives to choose jeonse. According to industry sources, the interest rates on jeonse loans from commercial banks have exceeded an annual 6%, significantly increasing interest burdens. Concerns over “kan-tong jeonse” (underwater jeonse) due to falling property prices are further accelerating the shift to monthly rent. Additionally, since officetels are mainly leased in the form of monthly rent, landlords find monthly rent price increases more advantageous than jeonse.

With the high-interest rate trend expected to continue for the time being, the preference for officetels is likely to increase accordingly. Compared to houses, officetels require lower purchase costs and offer the potential for monthly rent income.

Among these, Daewoo E&C’s ‘Pungmu Station Prugio City,’ being built in Pungmu-dong (Pungmu 2 District), Gimpo-si, Gyeonggi-do, is attracting attention.

‘Pungmu Station Prugio City’ is a residential officetel constructed as a single building with four basement floors and ten above-ground floors, comprising a total of 288 units with exclusive areas of 64㎡, 67㎡, and 82㎡. Additionally, 32 retail units will be supplied on the first floor. Notably, ‘Pungmu Station Prugio City’ offers a 10% down payment and interest-free installment benefits, significantly reducing the initial financial burden for buyers amid ongoing interest rate hikes.

Using Gimpo Goldline’s Pungmu Station, located within walking distance from the complex, residents can reach Gimpo Airport Station?where the Incheon Airport Railroad, Seoul Subway Lines 5 and 9, and the Gimpo Goldline intersect?in just two stops. This line connects to major business districts in Seoul such as Yeouido, Magok District, Gangnam area, and Seoul City Hall, facilitating easy access to large-scale business hubs. Using Gimpo Hangang-ro, Olympic-daero, and the Metropolitan Area 1st Ring Expressway, travel to Seoul as well as major cities in Incheon and Gyeonggi-do is convenient.

With abundant surrounding development benefits, steady population inflow is expected in the future. The Pungmu Station area urban development project is planned near the complex, and Inha University’s Gimpo Medical Campus is scheduled for completion in 2027. Additionally, a university hospital with 700 beds is under construction, and the ‘Hangang Cinepolis (Industrial Complex),’ being developed as a business and residential complex city, is expected to bring further benefits.

Convenient lifestyle facilities are also plentiful nearby. Facilities such as E-Mart Traders Gimpo Branch, Homeplus Gimpo Pungmu Branch, and CGV are easily accessible, along with neighborhood parks like Seonsu Park and Saejangteo Park. Gimpo Sports Complex, Pungmu National Sports Center, and Gimpo Citizens’ Hall Indoor Gymnasium provide ample recreational and cultural amenities.

Daewoo E&C has designed ‘Pungmu Station Prugio City’ with a 100% underground parking lot accessible only to delivery vehicles, with no car traffic inside the complex, and will install electric vehicle charging stations. The complex features unique landscaping spaces rarely seen in the area, including rooftop gardens, terrace gardens, and a conversation yard in the publicly accessible area.

The retail facilities are located along the flow of foot traffic using Pungmu Station and can serve not only residents but also nearby residential complexes as a demand base. The layout plan, linked with Seonsu Park and the central garden, creates an environment where people want to stay longer. The underground parking lot is generously sized at 187% relative to the number of units.