Soaring Office-Tel Monthly Rent... Popularity of 'Songdo Xi Punggyeongchae Grenoble'

by Jung Jin

Published 20 Mar.2024 15:45(KST)

[Songdo Xi Poonggyeongchae Grenoble Bird's-eye View]

Recently, the subscription fever for officetels has been intense, with thousands of applicants flocking to popular complexes. As the demand for officetel rentals increases due to factors such as villa lease fraud, leading to improved profitability, market interest has shifted toward officetels.

On the 14th, the ‘Songdo Xi Punggyeongchae Grenoble’ officetel (Complexes 3 and 5), which held its subscription, recorded an average competition rate of 7 to 1. A total of 3,808 applicants applied for 542 units across the two complexes. Both complexes achieved simultaneous success with balanced competition rates of 6.07 to 1 and 7.99 to 1, respectively. It is analyzed that the reasonable sale price, which allows expectations of capital gains, greatly contributed to the successful sale.

Earlier in February, the ‘Geomdan New Town Lotte Castle Nextiel I·II·III’ officetels also showed an average competition rate of 4 to 1. A total of 2,778 applicants applied for 682 units. For the exclusive 84㎡ units, 577 applicants applied for 40 units, recording a competition rate of 14.43 to 1.

Successful cases have also appeared in Seoul. The ‘Imun I-Park Xi Officetel IM594,’ supplied in February, attracted 1,237 applicants for 584 units, recording an average competition rate of 2.1 to 1. The third group, consisting of units sized 24 to 52㎡, had a competition rate of 3.4 to 1. Particularly, the 24㎡ units drew attention as this achievement came amid controversy over high sale prices at the time.

The industry views that the recent popularity of officetels is rooted in fears of lease fraud. There is a noticeable trend where rental demand prefers officetels over small housing types such as multi-family (villa) and multi-household homes, which are difficult to assess market prices for.

As demand for officetels increases, rental yields have also significantly improved.

According to data from the Korea Real Estate Board, the officetel monthly rent price index rose by 0.07% from the previous month in February this year, reaching 100.14 points. This is the highest figure since the first statistics were compiled in 2018. The officetel yield also rose to 5.28% this year. Since surpassing 5.01% in November last year, it has consistently maintained the 5% range. This is the first time in three years since June 2020 that officetel yields have exceeded 5%.

A real estate expert explained, “With the increase in single-person households, demand for small housing continues to grow, but as villas lose trust due to lease fraud, rental demand is concentrating on officetels. New officetel sales are also rapidly moving toward complexes that combine location and product competitiveness.”

As officetels are being re-evaluated, attention is focused on new sale complexes with large-scale supply or those located in key areas.

In Songdo International City, Incheon, the ‘Songdo Xi Punggyeongchae Grenoble’ officetel, constructed by GS Construction and Jeil Construction Co., Ltd., is currently on sale.

‘Songdo Xi Punggyeongchae Grenoble,’ which is conducting official contracts over two days on the 20th and 21st, is a project integrating five complexes in District 11 of Songdo International City to create a total of 3,270 residential units (2,728 apartments and 542 officetel units). Among these, the officetels are built in Complexes 3 and 5, each consisting of one building with 271 units. They are composed of a single exclusive area of 39㎡ with three types: A, B, and C.

This location is characterized by abundant potential rental demand around the complex. It is close to Yonsei University International Campus and Incheon Global Campus, with the second phase of Yonsei University International Campus and Inha University Open Innovation Campus (Inha University Songdo Campus) also being constructed nearby. The Samsung Biologics 2nd Bio Campus (planned) and Lotte Biologics (planned) sites are also nearby. Educational and living infrastructure facilities such as kindergarten, elementary and middle school sites, and Songdo Severance Hospital (scheduled to open in December 2026) are within walking distance.