Cheongnyangni Development Beneficiary Area 1.65 Billion Won Motel Building Analysis: 550 Million Won Profit in 14 Years, Center of GTX Boost and Market Revitalization (ft. Cheongnyangni Station, Gyeongdong Market)
Cheongnyangni, a transportation hub in northeastern Seoul and a region where large-scale development is actively underway, has been attracting keen interest in the real estate market in recent years. Shedding its image as an aging area, it is undergoing changes close to a complete transformation, offering new investment opportunities. News of a motel building located in a region expected to directly benefit from this Cheongnyangni development being transacted for around 1.6 billion Won is drawing significant attention from many real estate investors. Today, we will delve into this transaction case to conduct an in-depth analysis of the development boosts in the Cheongnyangni area and the investment value of motel building investment.
Dongdaemun-gu Cheongnyangni-dong 722, Transacted for 1.65 Billion Won
The building we will examine is located at Cheongnyangni-dong, 7222 in Dongdaemun-gu, and it was transacted for 1.65 billion Won in February 2025.
Key Features and Location Analysis of the Transacted Building:
- Cheongnyangni Development Beneficiary Area: This building is located in a development beneficiary area near Cheongnyangni Station. The Cheongnyangni area is a place where various development boosts are concentrated, such as the Dongbuk Line connection, GTX line expansion, and redevelopment and reconstruction projects, making it a region expected to see an increase in regional value.
- Proximity to Cheongnyangni Station: Located within walking distance of Cheongnyangni Station, where multiple lines intersect, including Subway Line 1, Gyeongui-Jungang Line, Suin-Bundang Line, and Gyeongchun Line. Once the GTX line opens in the future, it is expected to become a true transportation hub in the northeast metropolitan area, leading to a dramatic increase in foot traffic. Excellent transportation accessibility is a key factor increasing building value.
- Near Gyeongdong Market: Located near Gyeongdong Market, a traditional market, it can secure foot traffic visiting the market as hinterland demand. Recently, Gyeongdong Market is regaining vitality with new shops with a young sensibility, the activation of places like Starbucks Gyeongdong 1960 and Youth Mall.
- Zoning District: It belongs to the '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. Although it is a motel building, it has the potential for future utilization as commercial facilities through zoning changes or remodeling.
- Building Status: It is a B1F to 3F building completed in September 1971. Although it is an old building over 50 years old, combined with the Cheongnyangni development boosts, it has the potential for value increase through remodeling or new construction. The total floor area is 76.04 pyeong (approx. 251.37㎡).
- Road Condition: It fronts a 2m road. Although mentioned as being on a back street of a 6-lane main road, the detailed transaction information specifies a 2m road. A narrow road condition can be a limitation for vehicle access or new construction.
- Value of 63.72 Million Won Per Pyeong: The price in the low 60 million Won range per pyeong for a 25.89 pyeong plot shows the land value of the development beneficiary area near Cheongnyangni Station. It is interpreted as a price reflecting the fact that it is an old motel building and the 2m road condition.
550 Million Won Capital Gain in 14 Years, Impact of Cheongnyangni Market Revitalization
The fact that this building recorded a capital gain of 550 million Won over a period of 14 years is a result of the steady development and market revitalization of the Cheongnyangni area.
Investment Profit Analysis:
- July 2011 Transaction Price: 1.1 billion Won (approx. 42.31 million Won per pyeong)
- February 2025 Transaction Price: 1.65 billion Won (approx. 63.72 million Won per pyeong) (Held for approx. 14 years)
- 14 years: 550 million Won capital gain
- Annual: 39.29 million Won capital gain
- Monthly: 3.27 million Won profit (Simple capital gain analysis only)
Over a period of 14 years, the building's price increased by 550 million Won, and the price per pyeong increased by about 50%, from approximately 42.31 million Won to 63.72 million Won. Calculating annually, this is an appreciation rate of about 3.6%. This calculation is based solely on simple capital gain and does not include rental income (motel operating profit) generated during the holding period, building maintenance costs, taxes, etc. Including rental income would result in a higher actual investment yield.
Cheongnyangni Development Boosts and Market Revitalization
The Cheongnyangni area is currently seeing a concentration of various development boosts, driving regional value appreciation.
- Establishment of Transportation Hub: The opening of new railway lines such as GTX Line C and Dongbuk Line will make Cheongnyangni Station a core transportation hub in the northeastern metropolitan area. This will lead to increased foot traffic and improved wider-area accessibility.
- Redevelopment/Reconstruction: Large-scale redevelopment and reconstruction projects, including the Cheongnyangni 588 (red-light district) maintenance project, are improving the aging urban environment and bringing in high-rise mixed-use buildings and offices, changing the area's skyline and atmosphere.
- Market Revitalization Efforts: Various attempts are being made to revitalize traditional markets like Gyeongdong Market, including attracting young brands and creating cultural spaces. This increases the influx of young people and adds to the appeal of the commercial area.
Motel Building Investment, Considerations
Motel buildings have different investment characteristics compared to general commercial buildings.
- Consideration of Business Type Characteristics: It is necessary to understand the demand volatility, operating method, and regulations of the motel business itself.
- Zoning Change and Remodeling: A strategy of purchasing a motel building and changing its use (e.g., commercial space, office, residential) or remodeling it can be considered. Its designation as a General Commercial Zone can be advantageous for such changes in utilization.
- Tenant Composition: If renting out a motel building, composing tenants from business types other than motel operators may be difficult. If changing the use to another purpose, the rental demand suitable for that purpose must be identified.
- Yield Analysis: A comprehensive investment yield analysis considering maintenance costs due to building age, remodeling/new construction costs, taxes, etc., in addition to motel operating profit (or rental income), is essential.
Future Investment Outlook and Precautions
The Cheongnyangni area is a region expected to see steady value appreciation in the future based on large-scale transportation and development boosts like GTX. Real estate in development beneficiary areas particularly close to Cheongnyangni Station is expected to be directly affected by these boosts.
However, the following precautions should be considered during investment:
- Characteristics of the Motel Business: An understanding of the characteristics of the motel building itself (e.g., facility age, image) and the business is necessary.
- Specificity of Development Plans: It is necessary to specifically ascertain how the surrounding development boosts will directly impact the building's plot, including the pace and scope of development.
- Limitations of Road Condition: A 2m road condition can be a limitation for new construction or expansion. Building regulations and laws must be carefully checked.
- Market Competition: Market competition may intensify as new commercial/office facilities are built in the Cheongnyangni area.
- Expert Advice: Given the strong regional characteristics and the fact that it is a motel building, 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 Cheongnyangni-dong 7222, Dongdaemun-gu.
※ Transaction Details
- Location: Dongdaemun-gu Cheongnyangni-dong 7222
- Subway Station: Cheongnyangni Station
- Transaction Date: February 2025
- Sale Price: 1.65 billion Won
- Land Price (Per Pyeong): 63.72 million Won
- Land Area: 25.89 pyeong (85.6㎡)
- Building Area (Total Floor Area): 76.04 pyeong (251.37㎡)
- Zoning District: General Commercial Zone
- Floors: B1F ~ 3F
- Road Condition: 2m
- Year of Completion: September 18, 1971
- Official Standard Land Price (공시지가): Approx. 18.00 million Won (Per Pyeong)
- Land Price Relative to Official Standard Price: Approx. 3.554 times (Shows that the actual transaction price was significantly higher than the official standard price. Confirms the high market value of the Cheongnyangni area.)
※ Past Transaction History
- July 2011: 1.1 billion Won sale (42.31 million Won per pyeong)
- February 2025: 1.65 billion Won sale (63.72 million Won per pyeong) (Held for approx. 14 years)
- 14 years: 550 million Won capital gain
- Annual: 39.29 million Won capital gain
- Monthly: 3.27 million Won profit (Simple capital gain analysis only)
This transaction is a case where a motel building with a land area of approximately 25.89 pyeong and a total floor area of 76.04 pyeong (B1F to 3F) was transacted for 1.65 billion Won, at approximately 63.72 million Won per pyeong. It is located in the development beneficiary area near Cheongnyangni Station, in a General Commercial Zone, and was completed in 1971. While it recorded a capital gain of approximately 550 million Won in 14 years, showing steady real estate value appreciation in the Cheongnyangni area, being an old motel building with a 2m road condition are disadvantages. However, based on the Cheongnyangni development boosts and its designation as a General Commercial Zone, it has the potential to create new value through remodeling. The ratio of land price to official standard price exceeding 3.5 times indicates that the market value significantly surpasses the official standard price.
Conclusion: Cheongnyangni Motel Building, Expectation of Development Boosts and Change
The case study of the 1.65 billion Won motel building transaction near Cheongnyangni Station in Cheongnyangni-dong, Dongdaemun-gu, shows the investment potential of the Cheongnyangni development beneficiary area. Various development boosts such as the transformation of Cheongnyangni Station into a transportation hub, redevelopment/reconstruction, and market revitalization will drive real estate value appreciation in the Cheongnyangni area. Although it is an old motel building, based on its designation as a General Commercial Zone and development boosts, it has the potential to explore new utilization options and increase value through remodeling. The fact that asset value has steadily increased over a period of 14 years suggests the attractiveness of long-term investment in the Cheongnyangni area real estate.
Investing in Cheongnyangni motel buildings is an attractive option that allows investors to seize investment opportunities in the Cheongnyangni development beneficiary area with a relatively manageable investment amount. However, it is important to carefully analyze risk factors such as the characteristics of the motel business, the building's physical condition, and the 2m road condition, and make wise investment decisions with expert advice. It remains to be seen if this building can also create new value along with Cheongnyangni's 'complete transformation'.