Purchased Office Building for 7 Billion Won... Industry Says "Value Will Greatly Increase After Redevelopment"

Acquisition of Chungjeongno Building Previously Leased for Corporate Use
Industry: "Value Expected to Increase Significantly After Redevelopment"

It has been confirmed that "Ddanzi Group Co., Ltd." purchased the building it used as its headquarters in Seodaemun-gu, Seoul, for about 7 billion KRW. The area of Chungjeongno 3-ga, where the building is located, designated as the "Mapo-ro 5 District 2 Zone Urban Maintenance-type Redevelopment Area," is expected to be transformed into a 28-story residential-commercial complex through redevelopment.

According to the real estate industry on the 20th, Ddanzi Group purchased the Chungjeongno 3-ga headquarters and the attached land, which it had been leasing, under the corporation's name in September last year. Ddanzi Group is a company led by broadcaster Kim Eo-jun, who conducts internet broadcasts from the Chungjeongno 3-ga headquarters.

Built in 1970, the building consists of neighborhood living facilities, offices, and a security room, spanning floors 1 to 5 with a total floor area of 1,285㎡. While the local real estate industry expected the price of the building and land to reach 10 billion KRW, the transaction was made at 7.32538 billion KRW.

Kim Eo-jun, CEO of Ddanzi Group [Photo by Yonhap News]

In November last year, Industrial Bank of Korea established a mortgage lien on the building with Ddanzi Group as the debtor. The maximum claim amount is 8.4 billion KRW. Considering that the maximum claim amount is generally set at 110-120% of the loan amount, it is estimated that Ddanzi Group borrowed about 7 billion KRW when purchasing the building.

The Mapo-ro 5 District 2 Zone, which includes Chungjeong Apartment known as the oldest apartment in Korea, was designated as a redevelopment area in 1979 but was changed to an urban environment maintenance area in 2009, resulting in no development for decades. During former Seoul Mayor Park Won-soon's administration in 2019, a plan to preserve Chungjeong Apartment as a cultural facility was proposed, but due to safety issues, demolition was decided in June last year.

According to the maintenance industry on the 20th, the Promotion Committee for the Establishment of the Redevelopment Association of the Mapo-ro 5 District 2 Zone Urban Environment Maintenance Project plans to hold a general meeting on the 18th of next month to discuss the establishment of the redevelopment association. Earlier, in June last year, the Seoul City Urban Planning Committee approved a revision of the "Mapo-ro 5 District 2 Zone Urban Maintenance-type Redevelopment Area and Maintenance Plan."

Ddanzi Group has been using the headquarters since 2016, reportedly paying several hundred million KRW annually in rent. The maintenance industry views the purchase of the headquarters as linked to the redevelopment push. An industry insider said, "The Mapo-ro 5 District 2 Zone, which includes Chungjeong Apartment, is adjacent to Chungjeongno Station on subway lines 2 and 5 and close to downtown, so its value is expected to increase significantly after redevelopment."