In April this year, Donghae, a member of the group Super Junior, purchased a building in Seongsu-dong, Seoul, for 12 billion KRW (approximately 120 billion won or around $90 million). He acquired this building using a loan of about 9 billion KRW secured by jointly using the land where the building is located and an apartment he owns as collateral. According to the real estate registration document from the court, Donghae bought the underground to four-story building in individual ownership on April 27. By paying the remaining balance in mid-July, the ownership was transferred to him, and a maximum bond amount of 10.8 billion KRW was established for the mortgage. Typically, the maximum bond amount is set at approximately 120% of the loan amount. Based on this, it is assumed that Donghae borrowed around 9 billion KRW from a commercial bank using the land of the building and a high-end apartment in Seongdong District, Seoul, as collateral.
The building Donghae purchased covers a land area of approximately 270㎡ (about 82 pyeong) and a total floor area of about 733㎡ (about 222 pyeong), traded at roughly 146.71 million KRW per 3.3㎡ of land area. Completed in 1988, the building is located in a semi-industrial area and is presently used as a combination of a commercial and residential space, with some parts leased to operators such as restaurants and shoe repair shops.
Situated near Yeonmujang-gil (also known as Café Street), a trendy commercial area in Seongsu and a five-minute walk from Seongsu Station on Line 2, the building has a premium location. It is also in close proximity to the ‘Seoul Forest Hill State Apartment,’ contributing to the area’s vibrant residential and gastronomy scene.
Even though it has been less than half a year since the building transaction, analysts predict a minimum market gain of over 2.5 billion KRW. In comparison, a nearby three-story building across the street sold for 5.95 billion KRW in May, at roughly 178.65 million KRW per 3.3㎡. Additionally, a building located approximately 100m away is currently for sale at 171.43 million KRW per 3.3㎡ of land area.
Park Yong-hoon, CEO of An Realty, a firm specializing in high-end residential and commercial real estate, commented that Donghae made a well-negotiated purchase. Even conservatively estimating from local market transactions, gains of over 2.5 billion KRW are anticipated. More broadly, prices around 200 million KRW per 3.3㎡ have been seen in areas with similar zoning, suggesting potential profits could exceed 4 billion KRW.
He added that the Seongsu-dong area has an active small building market compared to other regions, driven by major developments like the Samyang Cement site and Booyoung Hotel projects. As such, transactions of small buildings in Seongsu-dong are more frequent than in areas like Gangnam.