Gangnam Daechi-dong Hagwon District 19.7 Billion Won Academy Building Transaction Completed: 7.7 Billion Won Profit in 5 Years, Secrets to Gangnam Building Investment? (ft. Daechi Intersection, Seolleung Station)
Gangnam Daechi-dong Hagwon District, the location of Korea's premier private education, is a core commercial district that has established a unique position in the real estate market. It boasts high foot traffic of students and parents and shows relative resilience to economic fluctuations due to its distinct educational fervor. News of an academy building in this Daechi-dong Hagwon District, specifically in the core area of Daechi Intersection, recording a massive capital gain of over 7.7 billion Won in just 5 years is attracting significant attention from 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 Daechi-dong Hagwon District buildings and the key strategies for Gangnam building investment.
Gangnam-gu Daechi-dong 912-31, Transacted for 19.7 Billion Won
The building we will examine is located at Daechi-dong, 912-31 in Gangnam-gu, and it was transacted for 19.7 billion Won in February 2025. This building was previously transacted for 11.95 billion Won in January 2020, approximately 5 years prior.
Key Features and Location Analysis of the Transacted Building:
- Landmark Location in Core Daechi Intersection Hagwon District: This building is located near Daechi Intersection, the very heart of the Daechi-dong Hagwon District. It is densely concentrated with numerous famous hagwons and college entrance exam-related facilities, with an overwhelmingly high foot traffic of students and parents, making it a prime location for an academy building. It also has high recognition as a local landmark.
- Generous Land and Building Area: The land area of approximately 146.47 pyeong (approx. 484.2㎡) and a total floor area of 473.53 pyeong (approx. 1565.38㎡) represent a substantial size rarely seen in the Daechi-dong Hagwon District. A large land area is advantageous for utilizing building coverage ratio and floor area ratio, and a large total floor area contributes to securing stable rental income by attracting hagwons or commercial tenants of various sizes.
- Proximity to Seolleung Station: Located within walking distance of Seolleung Station on Subway Line 2 and Bundang Line. Seolleung Station is an important transportation hub connecting to major business and commercial districts in Gangnam, and convenient public transportation access enhances accessibility for students and parents, playing a decisive role in securing rental demand for 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. The building's total floor area is more than three times the land area, indicating that the floor area ratio was efficiently utilized during construction.
- Road Condition and Building Status: It fronts a 2-lane road. This is a major back street near Daechi Intersection, with good vehicle and pedestrian access. The building has a scale of B1F to 6F and was completed on November 14, 1991.
7.75 Billion Won Capital Gain in 5 Years, Steady Appreciation of Gangnam Real Estate
The background to this building's ability to achieve a remarkable profit of 7.75 billion Won in just 5 years is a result of the unique location of the Daechi-dong Hagwon District combined with the steady appreciation of the Gangnam real estate market.
Investment Profit Analysis:
- January 2020 Transaction Price: 11.95 billion Won (approx. 81.85 million Won per pyeong)
- February 2025 Transaction Price: 19.7 billion Won (approx. 134.50 million Won per pyeong)
- Holding Period: Approximately 5 years and 1 month (approx. 5.08 years)
- Total Capital Gain: Approx. 7.75 billion Won (simple capital gain)
- Annual Capital Gain: Approx. 1.5255 billion Won (simple capital gain)
- Monthly Profit: Approx. 127.12 million Won (simple capital gain)
In just 5 short years, the building's price increased by 7.75 billion Won, over 60%. The price per pyeong also jumped significantly in 5 years, from the low 80 million Won range to the mid-130 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, etc. Including rental income would result in a significantly higher actual investment yield. This is a prime example demonstrating the steady upward trend in value for properties in the Daechi-dong area.
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, specifically near Daechi Intersection, was the most fundamental prerequisite for successful investment. The unique commercial area of the hagwon district guarantees stable rental demand and high rental rates, and is relatively strong even in downturns.
- Building of Ample Size: The generous size of the building, with a land area of 150 pyeong and a total floor area of 474 pyeong, was advantageous for attracting large hagwons of various sizes, contributing to maximizing rental income.
- Leveraging the Steady Appreciation of the Gangnam Real Estate Market: The investor effectively leveraged the market conditions where the value of Gangnam real estate, especially prime properties, steadily increased during the period from 2020 to 2025, realizing high capital gains. The strategy of waiting for value appreciation from a long-term perspective, rather than reacting to short-term price fluctuations, proved effective.
- Stable Rental Income: Given its nature as an academy building, stable rental demand was likely secured, generating consistent cash flow. This allowed for long-term holding and contributed to the realization of capital gains.
Gangnam Building Investment Secrets, Stable Rental Income and Capital Gain Simultaneously
Investing in buildings in core areas of Gangnam has the attractive advantage of allowing investors to enjoy both stable rental income and capital gains simultaneously.
- Stable Rental Income: Gangnam has very strong rental demand due to its abundance of office facilities, hagwon districts, and commercial facilities. Particularly, buildings located in station areas can easily attract high-quality tenants, allowing for stable cash flow.
- Expectation of High Capital Gain: Gangnam, being Seoul's top-tier area, is a region where steady land price increases and building value appreciation are expected. There is a high possibility of realizing significant capital gains through long-term holding.
- Utilizing Building's Potential: It is important to accurately assess the building's zoning district, building coverage ratio, floor area ratio, etc., to utilize the potential for value increase through new construction, expansion, or remodeling.
Future Investment Outlook and Precautions
The Daechi-dong Hagwon District is expected to have steady demand as long as Korea's educational fervor continues. Surrounding development boosts such as the Eunma Apartment reconstruction can have an even more positive impact on the hagwon district.
However, the following precautions should be considered during investment:
- Building Age and Potential for Remodeling/Reconstruction: Completed in 1991, the building may require major repairs or remodeling/reconstruction due to its age in the future. It is necessary to thoroughly check related costs and regulations.
- Rental Status and Risk of Vacancy: The current rental status, lease terms, rental rates, and potential risk of vacancy must be carefully analyzed.
- Market Volatility and Interest Rates: The real estate market can be affected by external factors such as interest rate fluctuations. Careful judgment regarding market conditions is necessary during investment.
- 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. Just like navigating with a 'compass', meticulous analysis and careful judgment are required.
Detailed Transaction Analysis
Let's examine the specific transaction details of the building at Daechi-dong 912-31, Gangnam-gu.
※ Transaction Details
- Location: Gangnam-gu Daechi-dong 912-31
- Subway Station: Seolleung Station
- Transaction Date: February 2025
- Sale Price: 19.7 billion Won
- Land Price (Per Pyeong): 134.50 million Won
- Land Area: 146.47 pyeong (484.2㎡)
- Building Area (Total Floor Area): 473.53 pyeong (1565.38㎡)
- Zoning District: Third Class General Residential Zone
- Floors: B1F ~ 6F
- Road Condition: 2-lane road
- Year of Completion: November 14, 1991
- Official Standard Land Price (공시지가): Approx. 35.97 million Won (Per Pyeong)
- Land Price Relative to Official Standard Price: Approx. 3.74 times
※ Past Transaction History
- January 2020: 11.95 billion Won sale (81.85 million Won per pyeong)
- February 2025: 19.7 billion Won sale (134.50 million Won per pyeong) (Held for approx. 5 years)
- 5 years: 7.75 billion Won capital gain
- Annual: 1.55 billion Won capital gain
- Monthly: 129.17 million Won profit (Simple capital gain analysis only)
This transaction is a case where a building with a land area of approximately 146.5 pyeong and a total floor area of 473.5 pyeong (B1F to 6F) was transacted for 19.7 billion Won, at approximately 134.50 million Won per pyeong. It boasts a prime location in the core Daechi-dong Hagwon District near Daechi Intersection and Seolleung Station, and belongs to the Third Class General Residential Zone. Despite being completed in 1991, it recorded a capital gain of approximately 7.75 billion Won in 5 years, clearly demonstrating the overwhelming value appreciation of buildings in the core Daechi-dong Hagwon District. The ratio of land price to official standard price, which is 3.74 times, also indicates that the market value significantly exceeds the official standard price.
Conclusion: Daechi-dong Hagwon District Building Investment, Success from Golden Location and Value Appreciation
The case study of the 19.7 billion Won building transaction in the core Daechi-dong Hagwon District, Gangnam-gu, clearly demonstrates the overwhelming investment value and potential of the unique golden location near Daechi Intersection Hagwon District. Achieving a remarkable profit of 7.75 billion Won in 5 years was not merely luck, but a result of securing a golden location, having a building of ample size, and leveraging the steady appreciation of the Gangnam real estate market. The ability to expect both stable rental income and high capital gains simultaneously is the biggest appeal of Gangnam building investment.
Investing in buildings in the Daechi-dong Hagwon District requires a high initial investment cost, but it is an attractive option that offers potential for stable asset growth and high investment returns based on stable rental demand, high commercial activity, and future development potential. However, it is important to carefully analyze risk factors such as the building's physical condition, potential for remodeling/reconstruction, and market volatility, and make wise investment decisions with the advice of an expert.