Dongdaemun Station Chungsin Market 2.3 Billion Won Small Building Analysis: Hidden Value of Flower Market & Garment/Sewing Specialty Street? (ft. 8-Story Building, 5-Year 300 Million Won Profit)
Dongdaemun, located in the heart of Seoul, is a region that boasts a long history as the center of the fashion and garment industry and a vibrant commercial district. Particularly, Chungsin Market near Dongdaemun Station is a unique specialty street where clothing, fabric, and sewing-related businesses, along with a flower market, are located. News of a small building located in this Chungsin Market being transacted for around 2.3 billion Won is attracting the attention of many real estate investors. Today, we will delve into this transaction case of the Dongdaemun Station Chungsin Market small building to conduct an in-depth analysis of the investment value of a specialized commercial district and small building investment strategy.
Jongno-gu Chungsin-dong 179-17, Transacted for 2.3 Billion Won
The building we will examine is located at Chungsin-dong, 179-17 in Jongno-gu, and it was transacted for 2.3 billion Won in February 2025.
Key Features and Location Analysis of the Transacted Building:
- Location in Chungsin Market Near Dongdaemun Station: This building is located in Chungsin Market near Dongdaemun Station on Subway Lines 1 and 4. Dongdaemun Station is a major transportation hub in downtown Seoul, and it is connected to Dongdaemun Market, resulting in very high foot traffic. Chungsin Market is a specialty street linked to the Dongdaemun commercial area, with a concentration of garment and sewing-related businesses, as well as a flower market, creating a unique atmosphere.
- Flower Market and Garment/Sewing Specialty Street: The Chungsin-dong area is a specialty street particularly concentrated with the wholesale flower market and offices/factories related to clothing fabric and sewing. A key advantage of these regional characteristics is consistent rental demand from related industries.
- 8-Story Small Building: Despite being a very small plot of land, approximately 28.19 pyeong (approx. 93.2㎡), it is a building constructed up to 8 stories, from B1F to 7F. A building built tall on a small plot is rare in the area and can possess scarcity value. The total floor area is 114.68 pyeong (approx. 379.11㎡).
- General Commercial Zone: This building is located in a 'General Commercial Zone'. General Commercial Zones are areas developed primarily for commercial and office functions, with high building coverage and floor area ratios, allowing for high-density development. The construction up to 8 stories on a small land area is a result of utilizing the floor area ratio of a General Commercial Zone.
- Building Status: Completed in March 2018, it is a relatively new building. Although about 7 years have passed since completion, it has the advantage of lower maintenance burden compared to older buildings and high tenant preference.
- Road Condition: It fronts an 8m road. An 8m road within Chungsin Market is considered a relatively wide road, offering good vehicle and pedestrian access.
300 Million Won Capital Gain in 5 Years, Necessity of Yield Analysis
Although this building recorded a capital gain of 300 million Won over a period of 5 years, other factors besides simple capital gain must be considered for an objective evaluation of investment yield.
Investment Profit Analysis:
- June 2020 Transaction Price: 2 billion Won (approx. 71.43 million Won per pyeong)
- February 2025 Transaction Price: 2.3 billion Won (approx. 81.58 million Won per pyeong) (Held for approx. 5 years)
- 5 years: 300 million Won capital gain
- Annual: 60 million Won capital gain
- Monthly: 5 million Won profit (Simple capital gain analysis only)
Over a period of 5 years, the building's price increased by 300 million Won, and the price per pyeong increased by about 14%, from approximately 71.43 million Won to 81.58 million Won. Calculating annually, this is an appreciation rate of about 2.8%. This calculation is based solely on simple capital gain and does not include rental income generated during the holding period, building maintenance costs, taxes (acquisition tax, property tax, capital gains tax), and incidental costs such as brokerage fees incurred during the transaction. Considering these incidental costs and the time value, it may be difficult to assess the investment yield as high based solely on simple capital gain. Objective investment value evaluation must be done through a comprehensive yield analysis that includes rental income, costs, and all other relevant factors.
Characteristics of Chungsin Market, a Garment/Sewing Office Cluster, and Considerations for Investment
The Chungsin Market area, a cluster of garment and sewing offices, is a specialized commercial district linked to Dongdaemun Market and has the following characteristics and considerations for investment.
- Stable Rental Demand (Specific Industries): There is steady rental demand from businesses and offices related to clothing, sewing, and fabric, linked to the Dongdaemun fashion industry. Rental demand related to the flower market can also be expected. Stable rental demand for specific industries is an advantage.
- Small Unit Area and Difficulty in Tenant Composition: A building built tall on a small plot of land (8 stories) may have relatively small usable area on each floor. This can be a disadvantage, making it difficult to attract large tenants or compose a diverse range of tenants. Rental demand may primarily consist of small offices or workshops.
- Advertising Effect and Suitability for Company Headquarters: Fronting an 8m road, which is comparable to a main road, and being an 8-story building makes it highly visible, providing an advertising effect. This can make it suitable for use as a company headquarters for certain businesses.
- Rental Yield Prediction: Due to lower rental rates for small unit areas or difficulties in tenant composition, the rental yield relative to the investment amount might be lower than expected. Risks such as vacancy should also be carefully analyzed.
Future Investment Outlook and Precautions
The Chungsin Market area, as a hinterland commercial district of Dongdaemun Market, is expected to have steady demand. However, a cautious approach is needed, considering the following points during investment:
- Changes in Regional Commercial Area: Changes in the Dongdaemun commercial area itself or in the garment/sewing industry may impact the Chungsin Market commercial area. An eye for reading rapidly changing trends is needed.
- Development Boosts: It is important to check if there are any development boosts planned for the Dongdaemun Station area or around Chungsin Market that could increase the regional value.
- Building Condition and Potential Need for Remodeling: Although completed in 2018, making it relatively new, the building's maintenance status and potential need for future remodeling should be considered.
- Difficulty in Renting Small Units: Rental demand and rental rates for small unit areas, as well as the risk of vacancy, must be carefully analyzed. A strategy for securing stable rental income is important.
- Expert Advice: Given the strong regional characteristics and the nature of renting out small units, it is important to seek assistance from a reliable real estate expert for accurate market analysis and investment value evaluation.
Detailed Transaction Analysis
Let's examine the specific transaction details of the building at Chungsin-dong 179-17, Jongno-gu.
※ Transaction Details
- Location: Jongno-gu Chungsin-dong 179-17
- Subway Station: Dongdaemun Station
- Transaction Date: February 2025
- Sale Price: 2.3 billion Won
- Land Price (Per Pyeong): 81.58 million Won
- Land Area: 28.19 pyeong (93.2㎡)
- Building Area (Total Floor Area): 114.68 pyeong (379.11㎡)
- Zoning District: General Commercial Zone
- Floors: B1F ~ 7F
- Road Condition: 8m
- Year of Completion: March 5, 2018
- Official Standard Land Price (공시지가): Approx. 28.89 million Won (Per Pyeong)
- Land Price Relative to Official Standard Price: Approx. 2.82 times (Shows that the actual transaction price was higher than the official standard price.)
※ Past Transaction History
- June 2020: 2 billion Won sale (71.43 million Won per pyeong)
- February 2025: 2.3 billion Won sale (81.58 million Won per pyeong) (Held for approx. 5 years)
- 5 years: 300 million Won capital gain
- Annual: 60 million Won capital gain
- Monthly: 5 million Won profit (Simple capital gain analysis only)
This transaction is a case where a small building with a land area of approximately 28.19 pyeong and a total floor area of 114.68 pyeong (B1F to 7F) was transacted for 2.3 billion Won, at approximately 81.58 million Won per pyeong. It is located in the Chungsin Market specialty street near Dongdaemun Station, within a General Commercial Zone, and is a relatively new building completed in 2018. While it recorded a capital gain of approximately 300 million Won in 5 years, showing some real estate value increase in the area near Dongdaemun Station, the investment yield should be objectively evaluated by considering rental income and other costs. The scarcity of a building built tall on a small plot and the 8m road condition appear to have been reflected in the investment value.
Conclusion: Dongdaemun Station Chungsin Market Small Building, Investment Potential of a Specialty Commercial Area
The case study of the 2.3 billion Won small building transaction near Dongdaemun Station in Chungsin-dong, Jongno-gu, shows the investment potential of the Chungsin Market specialty commercial area, which is linked to Dongdaemun Market. The scarcity of an 8-story building built on a small plot, the 8m road condition, and the advantage of being a relatively new building add to its investment appeal. While it recorded a capital gain of 300 million Won in 5 years, the investment yield should be comprehensively analyzed, including rental income and incidental costs.
Investing in Dongdaemun Station Chungsin Market small buildings is an attractive option that offers the potential for steady returns based on stable rental demand from specific industries (clothing, sewing, flower market-related). However, it is important to carefully analyze risk factors such as the difficulty in renting out small units, potential changes in the commercial area, and the building's physical condition, and make wise investment decisions with expert advice.