Capital Gain of 65.4 Billion KRW Upon Sale
"Seems to Consider Long-Term Investment Value"
2019 Controversy Over 'Entertainment Venue Operation' Occurred
It is expected that the building owned by Daesung of the group Big Bang will yield a capital gain of over 65 billion KRW after 7 years.
According to Building Road Real Estate Brokerage Corporation on the 6th, Daesung purchased a building with a land area of 275 pyeong located on Dosan-daero, Nonhyeon-dong, Gangnam-gu, Seoul, along a main road, for 31 billion KRW in November 2017. The building is located on Dosan-daero across from Dosan Park, offering excellent visibility, and is within an 8 to 10-minute walk to Apgujeong Rodeo Station on the Suin-Bundang Line and Gangnam-gu Office Station on Line 7, providing good accessibility. Due to the characteristics of the Nonhyeon-dong commercial district, there is a large floating population, and various brand stores are densely clustered nearby, giving it significant commercial value.
After purchasing the building, Daesung reportedly did not make any major expansions but only repainted the exterior in a dark gray color. The building’s registered use was changed from neighborhood living facilities to office facilities only, following changes in the tenants’ business types. The industry interprets that Daesung purchased the building with long-term investment value in mind. In the area, nearby buildings were traded at about 324 million KRW per pyeong in 2022, and the current asking price reaches 379 million KRW per pyeong. Applying this to the land area of the building owned by Daesung, the current market price is estimated at approximately 96.4 billion KRW. If Daesung proceeds with a sale, it is expected to realize a capital gain of about 65.4 billion KRW.
Kim Kyunghyun, manager at Building Road Real Estate Brokerage Corporation, explained, "Daesung’s building spans a general commercial area and a third-class general residential area, so it is likely possible to expand to at least 11 floors in the future," adding, "If the two parcels of land behind the current building are developed together, it could be reconstructed into a larger-scale building." He continued, "Compared to the purchase price in 2017, Daesung has gained a capital gain of 65.4 billion KRW in about 7 years," and added, "Considering the current monthly rent level, an annual yield of over 6% can be expected."
Meanwhile, this building was embroiled in controversy in 2019 when reports surfaced about illegal operation of a nightlife establishment and prostitution mediation. The nightlife business was found to have disguised itself as a restaurant and photo studio since 2005 and operated secretly without a signboard. At that time, Daesung stated, "We purchased the building before leasing it out and were unaware of this fact," and announced, "We will take immediate legal action against the business." Subsequently, the police investigation resulted in a dismissal of charges.
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