Cheongdam-dong 16.4 Billion Won Building Transaction Analysis: Back Street of 6-Lane Main Road, A Successful Investment Case (ft. Apgujeong Rodeo Station, New-Grade Building, High-Quality Tenants)
Cheongdam-dong, Gangnam-gu, is renowned as Seoul's most representative affluent neighborhood and high-end commercial district. It is densely populated with luxury brand flagship stores, upscale restaurants, and galleries, always boasting high asset values. The news of a multi-billion Won building transaction in Cheongdam-dong reflects strong interest in the real estate market and provides significant implications for investing in prime Gangnam buildings. Today, we will analyze a case study of a 16.4 billion Won building transaction in Cheongdam-dong, Gangnam-gu, to explore the key factors of successful building investment.
Gangnam-gu Cheongdam-dong 120-7, Transacted for 16.4 Billion Won
The building we will examine is located at Cheongdam-dong, 120-7 in Gangnam-gu. It was transacted for 16.4 billion Won in February 2025.
Key Features and Location Analysis of the Transacted Building:
- Prime Cheongdam-dong Location: This building is located in the core commercial district of Cheongdam-dong, Gangnam-gu, close to Apgujeong Rodeo Station. It's an area concentrated with Cheongdam-dong's luxury street, high-end restaurants, cafes, etc., boasting high-purchasing power foot traffic.
- Back Street of Apgujeong Rodeo Station Area: Located within walking distance of Bundang Line Apgujeong Rodeo Station and immediately on the back street of a 6-lane main road. It benefits from the excellent accessibility and visibility of the main road while offering a relatively quieter environment of the back street, making it suitable for both commercial and office use. A station-area location is a fundamental factor increasing building value.
- Prime Area Premium: The premium of a prime location like Cheongdam-dong significantly increases the building's value. Its symbolism and high brand value as one of South Korea's top commercial districts add to its appeal as an investment asset. Harmony with the surrounding environment also enhances the value of a Cheongdam-dong building.
- Land Area and Price Per Pyeong: The land area is 76.32 pyeong (approx. 252.3㎡). The sale price of 16.4 billion Won corresponds to approximately 214.88 million Won per pyeong based on the land area. This is considered an appropriate level when considering the average transaction price in the Cheongdam-dong commercial district, taking into account the building's condition and tenant composition. This price range reflects the land value of a top-tier area in Seoul.
- Zoning District and Building Status: It belongs to the Third Class General Residential Zone. This is an area allowing for mid- to high-rise residential and commercial functions, with relatively high building coverage and floor area ratios, resulting in high land utilization. The building has a scale of B1F to 5F, with a total floor area of 222.30 pyeong (approx. 734.87㎡).
Synergy Effect of New-Grade Building and High-Quality Tenants
One of the key factors why this building transaction is considered a successful investment case is the condition of the building and its tenant composition.
- New-Grade Building Completed in 2020: Completed in February 2020, it's a new-grade building, only about 5 years old at the time of transaction. Its exterior design and interior facilities reflect the latest trends and are in prime condition, making it highly competitive in attracting tenants. A new-grade building also has the advantage of low major repair burden for some time after investment.
- High-Quality Tenant Composition: The presence of high-quality tenants in the building is very important for an investor. It not only guarantees stable rental income but also acts as a factor that further increases the building's value. Having renowned brands or stable companies as tenants enhances the building's reliability. The combination of a well-maintained new building and high-quality tenants provides a comfortable and sophisticated environment for both tenants and visitors, maximizing satisfaction.
- Securing Stable Revenue: The combination of a new-grade building's high rental competitiveness and high-quality tenants forms the basis for providing investors with continuous stable rental income. This allows for expectations of stable cash flow relative to the investment amount.
Appropriate Sale Price, Expectation of High Investment Yield
Transacted at approximately 214.88 million Won per pyeong, this building can be considered reasonably priced when taking into account the value of the Cheongdam-dong commercial district.
- Land Price Relative to Official Standard Price: The land price is approximately 2.48 times the official standard land price (공시지가), indicating that the actual transaction price was significantly higher than the official standard price. This is a common phenomenon in core areas of Seoul and can be interpreted as a reflection of the market value of the area and expectations for future land price increases.
- Expectation of High Investment Yield: Considering the appropriate sale price, stable rental income, and the potential for future land price and building value increase comprehensively, it can be seen as a successful investment case with high expected investment yield. Like a goose that lays golden eggs, this transaction has the potential to bring consistent and high returns to the investor.
Implications of the Cheongdam-dong Building Transaction for Gangnam Real Estate Investment
This Cheongdam-dong building transaction provides the following significant implications for Gangnam real estate investment:
- Importance of Prime Location Investment: It shows that the value of core buildings in prime locations remains unchanged or may even increase amidst challenging market conditions. For investors seeking to build a portfolio with stable assets, investing in prime locations remains an attractive option.
- Value of Building Condition and Tenant Composition: It demonstrates that not only the location but also the building's physical condition (whether it is new-grade) and the type of tenants occupying it significantly impact the building's value and investment yield. A well-maintained new-grade building and high-quality tenants play a crucial role in reducing investment risk and securing stable returns.
- Reflection of Future Value: Investment decisions should not be made solely based on the current rental yield. Instead, they should comprehensively consider the development potential of the area, trends in the commercial district, and the potential for the building's value appreciation. The ratio of the actual transaction price to the official standard price is an indicator that can offer a glimpse into the market's assessment of this future value.
- Expert Insight: Investing in prime locations requires significant capital, combined with sharp insight into the market and professional analysis. The assistance of a real estate expert is essential to understand complex transaction terms and identify the hidden value of a building. Like a navigational compass, this transaction case points the direction for investors wishing to invest in prime Gangnam locations.
Detailed Transaction Analysis
Let's examine the specific transaction details of the building at Cheongdam-dong 120-7.
※ Transaction Details
- Location: Gangnam-gu Cheongdam-dong 120-7
- Subway Station: Apgujeong Rodeo Station
- Transaction Date: February 2025
- Sale Price: 16.4 billion Won
- Land Price (Per Pyeong): 214.88 million Won
- Land Area: 76.32 pyeong (252.3㎡)
- Building Area (Total Floor Area): 222.30 pyeong (734.87㎡)
- Zoning District: Third Class General Residential Zone
- Floors: B1F ~ 5F
- Road Condition: 2-lane road (back street of a 6-lane main road)
- Year of Completion: February 11, 2020
- Official Standard Land Price (공시지가): Approx. 86.55 million Won (Per Pyeong)
- Land Price Relative to Official Standard Price: Approx. 2.48 times
This transaction is a case where a new-grade building with a land area of approximately 76 pyeong and a total floor area of about 222 pyeong (B1F to 5F) was transacted for 16.4 billion Won, at approximately 214.88 million Won per pyeong. It is located on the back street of the Apgujeong Rodeo Station area and belongs to the Third Class General Residential Zone. Completed in 2020, the building condition is excellent, which is likely to have significantly impacted the investment value.
Conclusion: Cheongdam-dong Building Investment, The Textbook Case of a Prime Location
The case study of the 16.4 billion Won building transaction in Cheongdam-dong, Gangnam-gu, is a textbook example demonstrating that a successful building investment is possible when a prime location, new-grade building condition, high-quality tenant composition, and a reasonable sale price are combined. It suggests that even amidst challenging market conditions, properties with these characteristics can be transacted and highly valued.
Investing in Cheongdam-dong buildings requires a high initial investment cost, but it is an attractive option that offers potential for stable rental income along with long-term asset value appreciation. However, accurate analysis of prime location investments and expert advice are essential. We hope this case study has provided valuable information and insights for those interested in investing in prime Gangnam buildings.