Analysis of Gangnam Daechi-dong New-Grade 7.65 Billion Won Small Building Transaction: 2.85 Billion Won Profit in 3 Years, Gangnam Building Development Success Story (ft. Seolleung Station Area)
Seolleung Station and Daechi-dong area in Gangnam, Seoul, representative business and education centers in Korea, are among the hottest real estate markets in the country. Combining convenient transportation, abundant hinterland demand, and the unique specialty of the Daechi-dong hagwon (academy) district, it is a region that always attracts the attention of investors. News of a new-grade small building located in this Seolleung Station area, Daechi-dong, being transacted for the 7 billion Won range, recording a capital gain of over 2.8 billion Won in just 3 years, is showing the astonishing potential of Gangnam building development investment to many real estate investors. Today, we will delve into this transaction case to conduct an in-depth analysis of the secrets to successful investment in small buildings in the Seolleung Station area, Daechi-dong, and Gangnam building development strategy.
Gangnam-gu Daechi-dong 901-30, Transacted for 7.65 Billion Won
The building we will examine is located at Daechi-dong, 901-30 in Gangnam-gu, and it is a new-grade small building whose sale was completed for 7.65 billion Won in February 2025. This building was previously transacted for 4.8 billion Won in January 2022, just 3 years prior.
Key Features and Location Analysis of the Transacted Building:
- Core Location in Seolleung Station Area, Daechi-dong: It is an undisputed station area building located within walking distance of Seolleung Station, a transfer station for Subway Line 2 and Suin-Bundang Line. The excellent transportation accessibility of Seolleung Station, which connects to major business districts in Gangnam, is very advantageous for attracting tenants for offices and commercial spaces within the building and contributes to securing abundant foot traffic. Particularly located in the core area of Daechi-dong, the best hagwon district in Korea, demand for academies and education-related facilities is very high.
- New-Grade Building (Completed in 2023): It is a new-grade building of B1F to 5F scale, completed on October 23, 2023. Less than 2 years have passed since completion, so the building condition is very good, and it incorporates the latest architectural standards and trendy design, resulting in high tenant preference. It also has the advantage of lower maintenance costs compared to older buildings.
- Second Class General Residential Zone: This building is located in a 'Second Class General Residential Zone'. This is an area primarily for low- and mid-rise residential buildings. However, based on its unique locational characteristics as a Seolleung Station area in the Daechi-dong hagwon district, it has the potential for diverse utilization as commercial and education-related facilities such as academies, offices, and medical clinics. It appears to have been constructed efficiently utilizing the building coverage ratio and floor area ratio (land area 76.05 pyeong, total floor area 182.32 pyeong).
- Land Area and Total Floor Area: The land area is 76.05 pyeong (approx. 251.4㎡), and the total floor area is 182.32 pyeong (approx. 602.72㎡). The total floor area is high relative to the land area, indicating efficient utilization of the floor area ratio during construction, which is a factor that favors securing rental space and increasing yield.
- Fronting a 4m Road: It fronts a 4m road. While not a main road, it is located on a back road in the Seolleung Station area and Daechi-dong hagwon district, ensuring a certain level of exposure to foot traffic.
- Investment in the 7 Billion Won Range: The sale price of 7.65 billion Won can be assessed as a reasonable level considering its locational value as the best location in the Seolleung Station area, Daechi-dong hagwon district, and the fact that it is a new-grade building.
2.85 Billion Won Capital Gain in 3 Years, Gangnam Building Development Success Model
The background to this building's ability to record a massive capital gain of 2.85 billion Won in just 3 short years is a result of successful building development in a core Gangnam location and the rapid appreciation of the Gangnam real estate market.
Investment Profit Analysis:
- January 2022 Transaction Price: 4.8 billion Won (approx. 63.16 million Won per pyeong)
- February 2025 Transaction Price: 7.65 billion Won (approx. 100.59 million Won per pyeong)
- Holding Period: Approx. 3 years and 1 month (Approx. 3.08 years)
- Total Capital Gain: Approx. 2.85 billion Won (Simple capital gain analysis)
- Annual Average Capital Gain: Approx. 925 million Won (Simple capital gain analysis)
- Monthly Average Profit: Approx. 77.08 million Won (Simple capital gain analysis)
In just 3 years, the building's price increased by 2.85 billion Won, or over 59%. The price per pyeong also jumped significantly in 3 years, from the low 60 million Won range to the low 100 million Won range. This calculation is based solely on simple capital gain and does not include rental income generated during the holding period, building maintenance costs, taxes, and the costs incurred for new construction. Even considering the new construction costs, this transaction, which generated immense profit in a short period, is a clear example demonstrating the high profitability of building development in core areas of Gangnam.
Key Secrets to Investment Success:
- Securing a Core Location in Seolleung Station Area, Daechi-dong Hagwon District: Acquiring a unique core location in the Seolleung Station area, Daechi-dong, the best hagwon district and business center in Korea, was the most fundamental prerequisite for successful investment. The power of the location is the basis for stable rental income and building value appreciation.
- Successful Building Development (New Construction): Purchasing an aging building and constructing an efficient new building suited to the regional characteristics was the core strategy for maximizing building value. By supplying a new building with the latest facilities and design, tenant preference was increased.
- Leveraging the Rapid Appreciation of the Gangnam Real Estate Market: The investor effectively leveraged the market conditions where the value of Gangnam real estate, especially commercial properties in station areas, sharply increased during the period from 2022 to 2025, realizing high capital gains.
- Utilization of Second Class General Residential Zone Zoning: Despite being a Second Class General Residential Zone, the building's value was increased by utilizing the characteristics of the Daechi-dong hagwon district and constructing a building with high commercial utility such as academies and offices, overcoming the limitations of the zoning district.
- Excellent Building Marketability: As a new-grade building completed in 2023, its clean and modern facilities were advantageous for attracting high-quality tenants, which was a significant factor in increasing the building's value.
Characteristics and Investment Appeal of Daechi-dong Hagwon District
The Daechi-dong hagwon district has unique characteristics as the center of private education in Korea.
- Solid Rental Demand: Rental demand for education-related businesses such as academies, college admissions consulting, education-related offices, and study cafes is very strong and consistent.
- Weekday and Weekend Vitality: Foot traffic from students, parents, and instructors is very abundant on both weekdays and weekends, resulting in stable rental income for commercial spaces.
- High Consumption Power: Due to the high educational enthusiasm in the region, related consumption expenditures are active, leading to high sales for commercial facilities.
- Diverse Business Types: Besides education-related facilities, various types of businesses targeting students and parents, such as restaurants, cafes, bookstores, and stationery stores, are well-developed.
Future Investment Outlook and Precautions
Investing in a new-grade small building in the Seolleung Station area, Daechi-dong, is an attractive investment property that can expect stable rental income along with long-term asset value appreciation. The unique characteristics of the Daechi-dong hagwon district combined with the power of the Seolleung Station area location are expected to maintain consistently high value. The past case of recording a significant capital gain in a short period demonstrates this potential.
However, the following points should be carefully considered during investment:
- High Initial Investment Cost: New-grade buildings in core areas of Gangnam require high initial investment costs.
- Specificity of Daechi-dong Hagwon District: Changes in the hagwon district commercial area and education policy changes may impact rental demand. A deep understanding of the hagwon district's characteristics is necessary.
- Building Management and Maintenance: Even for a new-grade building, consistent management and maintenance of facilities aligned with trends are important for rental competitiveness.
- Market Volatility: The Gangnam real estate market can be volatile. Careful judgment regarding market conditions due to external factors such as interest rate fluctuations and economic conditions is necessary.
- Expert Advice: Investing in high-value buildings in core areas of Gangnam can be complex and involve risks. It is important to seek assistance from a reliable real estate expert for thorough analysis and prudent investment decisions.
Detailed Transaction Analysis
Let's examine the specific transaction details of the building at Daechi-dong 901-30, Gangnam-gu.
※ Transaction Details
- Location: Gangnam-gu Daechi-dong 901-30
- Subway Station: Seolleung Station (Transfer station for Line 2, Suin-Bundang Line)
- Transaction Date: February 2025
- Sale Price: 7.65 billion Won
- Land Price (Per Pyeong): 100.59 million Won
- Land Area: 76.05 pyeong (251.4㎡)
- Building Area (Total Floor Area): 182.32 pyeong (602.72㎡)
- Zoning District: Second Class General Residential Zone
- Floors: B1F ~ 5F
- Road Condition: 4m Road
- Year of Completion: 2023.10.23
- Official Standard Land Price (공시지가): Approx. 26.72 million Won (Per Pyeong)
- Land Price Relative to Official Standard Price: Approx. 3.76 times
Past Transaction History (January 2022):
- Transaction Price: 4.8 billion Won (63.16 million Won per pyeong)
Change Compared to Past Transaction (Held for approx. 3 years):
- Total Capital Gain: 2.85 billion Won
- Annual Capital Gain: 950 million Won
- Monthly Profit: 79.17 million Won (Simple capital gain analysis)
Key Features:
- Seolleung Station area, core location in Daechi-dong hagwon district
- New-grade building completed in 2023 (B1F to 5F)
- 7.65 billion Won transaction
- Land area 76.05 pyeong, Total floor area 182.32 pyeong
- Second Class General Residential Zone
- Fronting a 4m road
- 2.85 billion Won capital gain in 3 years
This transaction is a case where a new-grade building with a land area of approximately 76.05 pyeong and a total floor area of 182.32 pyeong (B1F to 5F) was transacted for 7.65 billion Won, at approximately 100.59 million Won per pyeong. It has the best locational conditions as a Seolleung Station area, Daechi-dong hagwon district, and is a new-grade building completed in 2023. Compared to the purchase price in 2022 (4.8 billion Won), it recorded a massive capital gain of 2.85 billion Won in just 3 years, clearly demonstrating the astonishing profitability of building development investment in core areas of Gangnam. Despite being in a Second Class General Residential Zone, it was recognized for its high value based on its excellent location and the marketability of a new building, which was reflected in the high ratio of land price relative to the official standard price.
Conclusion: Seolleung Station Area Daechi-dong, A Golden Opportunity for Building Development and Investment
The case study of the 7.65 billion Won new-grade small building transaction in the Seolleung Station area, Daechi-dong, Gangnam-gu, clearly demonstrates how much profit successful building development investment in a core Gangnam location can bring. The unique location in the Seolleung Station area, Daechi-dong hagwon district, and the excellent marketability of the new building combined to record a massive capital gain in a short period. Purchasing an aging building and constructing a new building suited to the regional characteristics was the key secret to investment success.
Investing in small buildings in the Seolleung Station area, Daechi-dong, is an attractive option that offers the potential for stable rental income along with long-term asset value appreciation. Utilizing the specificity of the Daechi-dong hagwon district and the advantages of Seolleung Station as a transportation hub, it is expected to maintain consistently high value. However, it is important to carefully analyze risk factors such as high initial investment costs, the specificity of the hagwon district commercial area, and market volatility, and make wise investment decisions with expert advice. Building development investment in core areas of Gangnam can be a golden opportunity when combined with thorough planning and execution.