"Profitability Decline and Oversupply" Officetel Subscription, 7 out of 10 Sites 'Undersubscribed'

[Asia Economy Reporter Yuri Kim] Unlike the strong demand in the apartment pre-sale market last year, officetels experienced a series of subscription shortfalls.

On the 21st, Real Estate 114 analyzed the 2019 officetel subscription results disclosed on Apartmenttoyou and found that out of a total of 68 sites, 47 complexes had fewer applicants than the number of units available. This means that 7 out of 10 sites failed to close subscriptions.

During the same period, the apartment pre-sale market recorded subscription closures within the ranking for 73.63% (296 out of 402 complexes). Notably, none of the 56 apartment complexes supplied in Seoul experienced subscription shortfalls. However, officetels, which are representative niche products, failed to close subscriptions in 7 out of 12 complexes supplied in Seoul. Nevertheless, some officetels in areas such as Yeouido in Seoul, Gwacheon in Gyeonggi, Dongtan, Songdo in Incheon, and Daegu recorded high subscription competition rates, showing signs of 'super polarization.'

Although officetels, mainly supplied as ultra-small studio units, could not replace apartment products, Real Estate 114 analyzed that the biggest reasons lie in declining profitability and oversupply. As of December 2019, the average rental yield of officetels was 4.91% annually, continuing a downward trend after falling below the 5% range in 2018.

Additionally, nearly 90,000 units, an unprecedented volume, were supplied in 2019. In 2020, 76,979 units nationwide are expected to be completed. Yoon Ji-hae, Senior Researcher at Real Estate 114, said, "A significant portion of the 32,942 units supplied in 2019 remain unsold, so the outlook is not favorable," adding, "Measures to control new supply are necessary."

This content was produced with the assistance of AI translation services.