Recently, the officetel market in Seoul has regained attention. Once considered less attractive for investment compared to apartments, officetels are now drawing significant interest from buyers due to rising sale prices and increased rental yields, especially in key areas of Seoul.
Between 2020 and 2021, officetels surged in popularity as alternatives to apartments. However, since 2022, the market cooled down due to various negative factors such as interest rate hikes, jeonse fraud, and housing unit count regulations.
Nonetheless, recent deregulation of officetels, apartment supply shortages, interest rate cuts, and increased demand for proximity between home and workplace have collectively boosted the value and scarcity of officetels.
The main reasons officetels are gaining attention can be summarized into four points. First, the rise in apartment prices and supply shortages. Due to increased construction and building costs, apartment supply has decreased, causing prices to rise, which has led demand to shift toward relatively affordable and practical officetels.
Moreover, the supply of officetels in Seoul is sharply declining. This year, the number of officetel units available for move-in in Seoul is 4,057, which is only about 28% of the 2023 move-in volume. The supply is expected to decrease further next year, increasing the scarcity value of officetels.
Second, the benefit of exclusion from housing unit counts and tax relief policies. Through the 8·8 measures, the government announced that newly built officetels under 60㎡ exclusive area will be excluded from housing unit counts until 2027. This means investors can enjoy tax benefits on acquisition tax, comprehensive real estate tax, and capital gains tax, significantly enhancing the investment appeal of small officetels.
Third, interest rate cuts and rising rental yields. Following the recent interest rate cut by the U.S. Federal Reserve (Fed), the possibility of domestic interest rate reductions has increased. While bank deposit interest rates remain at 2-3% per annum, officetel rental yields average 4-5% annually, attracting demand.
In fact, according to the Korea Real Estate Board, the average rental yield for officetels in Seoul was 4.87% last September. This is the highest level in five years, and with the growing aversion to jeonse, monthly rent demand is increasing, which is expected to further raise officetel rental yields.
Lastly, the increase in demand for proximity between home and workplace is a significant factor. In major business districts of Seoul such as Gangnam, Yeouido, and the city center, demand is concentrating on officetels as people seek residences close to their workplaces.
Industry experts say, “Officetels, serving as alternatives to apartments, can offer stable returns in income-generating real estate, attracting attention,” and “Demand is expected to focus on locations with excellent transportation networks and convenient living environments.”
As interest in investing in officetels grows, Bando Construction’s ‘Sangbong Station Bando Yubora First Live,’ currently being sold near Sangbong Station in Jungnang-gu, Seoul, is also gaining attention.
This officetel complex consists of 196 units ranging from 39 to 84㎡ exclusive area, spanning from 7 basement floors to 18 above-ground floors. It offers excellent access to Gangnam, convenient living infrastructure, and abundant future value, attracting both end-users and investors.
Located just 160 meters from Sangbong Station, which serves Seoul Subway Line 7, Gyeongchun Line, Gyeongui-Jungang Line, KTX Jungang Line, and the planned GTX-B line, residents can enjoy the premium of a station-area location. This allows travel to key Seoul business districts such as Gangnam-gu Office Station, Jongno 5-ga Station, and Jamsil Station within about 20 minutes.
Sangbong Station Bando Yubora First Live also boasts excellent living infrastructure. Within 120 meters are Costco Sangbong, Homeplus, Enter Six, CGV, Jungnang Art Center, a food alley, central commercial areas, and academies, providing a convenient living environment.
There are also transportation development benefits, with plans for the Sangbong Redevelopment Promotion District, Sangbong Terminal redevelopment, and a future-type complex transfer center, which will further improve accessibility to other areas.
The complex is ready for immediate move-in, and the site is located near Sangbong Station and close to Costco.
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