Daechi-dong Hagwon District 8.8 Billion Won Small Building Analysis: Eunma Apartment Reconstruction Issue and Synergy Effect? (ft. Hanti Station, 4 Billion Won Capital Gain in 4 Years)
Daechi-dong Hagwon District 8.8 Billion Won Small Building Transaction Analysis: Eunma Apartment Reconstruction Issue and Synergy Effect? (ft. Hanti Station, 4.6 Billion Won Capital Gain in 4 Years, Hagwon Commercial Area)
Daechi-dong Hagwon District in Gangnam-gu, South Korea's number one private education hub, is a core commercial district that boasts a unique position in the real estate market. It has high foot traffic of students and parents and shows relative resilience even in economic downturns due to its distinctive educational fervor. News of a small building in this Daechi-dong Hagwon District recording a massive capital gain of 4.6 billion Won in just 4 years is attracting significant attention from many real estate investors and once again confirms the investment potential of Daechi-dong. Today, we will delve into this transaction case to conduct an in-depth analysis of the secrets to successful investment in Daechi-dong Hagwon District small buildings and the synergy effect expected from the Eunma Apartment reconstruction issue.
Gangnam-gu Daechi-dong 932-31, Transacted for 8.8 Billion Won
The building we will examine is located at Daechi-dong, 932-31 in Gangnam-gu, and it was transacted for 8.8 billion Won in February 2025. This building was previously transacted for 4.2 billion Won in April 2021, approximately 4 years prior.
Key Features and Location Analysis of the Transacted Building:
- Prime Location in Daechi-dong Hagwon District: This building is located in the Daechi-dong Hagwon District, South Korea's number one private education hub. It is densely concentrated with numerous famous hagwons and a very high foot traffic of students and parents, resulting in high rental demand for businesses related to hagwons, such as academies, bookstores, stationery stores, and restaurants.
- Proximity to Hanti Station: Located within walking distance of Hanti Station on the Bundang Line. Hanti Station is a major transportation hub adjacent to the Daechi-dong Hagwon District, and convenient public transportation access enhances accessibility for students and parents, contributing to securing rental demand for commercial spaces and academy facilities within the building.
- Zoning District: 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.
- Building Status: It is a B1F to 6F building with a total floor area of 179.01 pyeong (approx. 591.78㎡). The land area is 54.81 pyeong (approx. 181.2㎡), indicating that the floor area ratio was efficiently utilized during construction relative to the land area (when applying the maximum allowed floor area ratio for a Third Class General Residential Zone).
- New Building: Completed in March 2024, it is a brand new building. It boasts the latest design and facilities, making it highly preferred by tenants, and has the advantage of low major maintenance cost burden for some time. It is in optimal condition for use as academy facilities.
- Road Condition: It fronts a 4m road. Many back alleys in the Daechi-dong Hagwon District are narrow, and a 4m road affects vehicle and pedestrian access.
- Value of 160.55 Million Won Per Pyeong: The price exceeding 160 million Won per pyeong for a plot of about 55 pyeong clearly demonstrates the high land value of the core location in the Daechi-dong Hagwon District. This is a result of the combination of the premium of a new building and the uniqueness of the hagwon district.
4.6 Billion Won Capital Gain in 4 Years, Daechi-dong Investment Success Legend
The background to this building's ability to achieve a remarkable profit of 4.6 billion Won in just 4 years is a result of the combination of the unique location of the Daechi-dong Hagwon District and the investor's strategic judgment.
Investment Profit Analysis:
- April 2021 Transaction Price: 4.2 billion Won (approx. 76.36 million Won per pyeong)
- February 2025 Transaction Price: 8.8 billion Won (approx. 160.55 million Won per pyeong)
- Holding Period: Approximately 3 years and 10 months (approx. 3.83 years)
- Total Capital Gain: Approx. 4.6 billion Won (simple capital gain)
- Annual Capital Gain: Approx. 1.2 billion Won (simple capital gain)
- Monthly Profit: Approx. 100 million Won (simple capital gain)
In just 4 short years, the building's price increased by 4.6 billion Won, more than 100%, doubling the initial investment amount. The price per pyeong also more than doubled in 4 years, from the high 70 million Won range to the 160 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 importantly, 'new construction costs'.
Key Secrets to Investment Success:
- Securing a Prime Location in Daechi-dong Hagwon District: Acquiring a prime location in the Daechi-dong Hagwon District, South Korea's number one private education hub, was the most fundamental prerequisite for successful investment. The unique commercial area of the hagwon district guarantees stable rental demand and high rental rates.
- Maximizing Value Through New Construction: After purchasing the old building for 4.2 billion Won in 2021, it was demolished and rebuilt into a new building of B1F to 6F scale, completed in March 2024. Improving the building's physical condition and design through new construction, and efficiently utilizing the floor area ratio to increase the total floor area, played a decisive role in increasing building value.
- Supplying a Building Optimized for the Hagwon Commercial Area: Designing and supplying the new building to meet the needs of the hagwon commercial area was effective. The fact that the building is leased entirely to a hagwon demonstrates the new building's rental competitiveness and the investor's ability to secure stable returns.
- Anticipation of Future Boosts like Eunma Apartment Reconstruction: As the Eunma Apartment reconstruction issue became more concrete, expectations for the future value of the Daechi-dong Hagwon District further increased. These boosts likely had a positive impact on price appreciation.
Hagwon Commercial Area, Strong Investment Appeal Even in Downturns
The Daechi-dong Hagwon District has a relatively strong investment appeal even in economic downturns due to being based on the special demand for education.
- Stable Rental Demand: The constant demand from students aiming for prestigious universities and their parents sustains the hagwon district and secures stable rental demand.
- High Rental Rates: Top-tier hagwons are willing to pay high rents to occupy space, resulting in relatively high rental yields.
- Preference for New Buildings: Hagwons tend to prefer new buildings with comfortable and modern facilities, giving new buildings high rental competitiveness.
- Advantage of Whole-Building Lease: When the entire building is leased by one hagwon, rental management is easier, and the risk of vacancy is low.
Eunma Apartment Reconstruction Issue and Hagwon District Synergy Effect
The Eunma Apartment reconstruction issue, a symbol of Gangnam redevelopment, is a major boost that will directly impact the Daechi-dong Hagwon District.
- Increase in Student Population: The number of households in the Eunma Apartment complex will increase through reconstruction, and the inflow of families with children moving into new apartments will lead to a further increase in the number of students attending Daechi-dong hagwons.
- Commercial Area Revitalization: The increase in student and parent foot traffic will lead to the revitalization of the surrounding commercial area, positively impacting the sales of other businesses besides those directly related to hagwons, such as restaurants, cafes, and convenience facilities.
- Real Estate Value Appreciation: The reconstruction of Eunma Apartments and the revitalization of the hagwon district are expected to drive an overall increase in real estate values in the Daechi-dong area.
Detailed Transaction Analysis
Let's examine the specific transaction details of the building at Daechi-dong 932-31, Gangnam-gu.
※ Transaction Details
- Location: Gangnam-gu Daechi-dong 932-31
- Subway Station: Hanti Station
- Transaction Date: February 2025
- Sale Price: 8.8 billion Won
- Land Price (Per Pyeong): 160.55 million Won
- Land Area: 54.81 pyeong (181.2㎡)
- Building Area (Total Floor Area): 179.01 pyeong (591.78㎡)
- Zoning District: Third Class General Residential Zone
- Floors: B1F ~ 6F
- Road Condition: 4m
- Year of Completion: March 22, 2024
- Official Standard Land Price (공시지가): Approx. 27.35 million Won (Per Pyeong)
- Land Price Relative to Official Standard Price: Approx. 5.87 times
※ Past Transaction History
- April 2021: 4.2 billion Won sale (76.36 million Won per pyeong)
- February 2025: 8.8 billion Won sale (160.55 million Won per pyeong) (Held for approx. 4 years)
- 4 years: 4.6 billion Won capital gain
- Annual: 1.53333 billion Won capital gain
- Monthly: 127.78 million Won profit (Simple capital gain analysis only)
This transaction is a case where a new building with a land area of approximately 55 pyeong and a total floor area of 179 pyeong (B1F to 6F) was transacted for 8.8 billion Won, at approximately 160.55 million Won per pyeong. It is located in the core Daechi-dong Hagwon District near Hanti Station, in a Third Class General Residential Zone, and was completed in March 2024, a very new building. Compared to the purchase price of the old building in 2021, it recorded a capital gain of approximately 4.6 billion Won in 4 years, clearly demonstrating the potential for successful new construction investment in the Daechi-dong Hagwon District. The fact that the ratio of land price to official standard price exceeds 5 times also confirms the high market value of the land in the core Daechi-dong area.
Conclusion: Daechi-dong Hagwon District Small Building, Success Built on Location and New Construction
The case study of the 8.8 billion Won small building transaction in the Daechi-dong Hagwon District, Gangnam-gu, clearly demonstrates the overwhelming investment value of the unique core location of the Daechi-dong Hagwon District and the potential for success of value creation strategies through new construction. Achieving a remarkable profit of 4.6 billion Won in 4 years is a result of combining securing the best location in the Daechi-dong Hagwon District near Hanti Station and demolishing the old building to supply a new building optimized for the hagwon commercial area. The Eunma Apartment reconstruction issue is expected to have an even more positive impact on the Daechi-dong Hagwon District in the future.
Investing in small buildings in the Daechi-dong Hagwon District is an attractive option with potential for high investment returns. However, it requires a high initial investment cost, an understanding of the specific characteristics of the hagwon commercial district, and professional knowledge in construction and development. We hope you seize opportunities for investing in small buildings in the Daechi-dong Hagwon District through thorough analysis and expert advice.