High Monthly Rents Spread to Seoul's Outer Districts

* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six tailored news items for each reader type.

1. Monthly Rents of 3 Million Won Reach Outer Districts as High Rents Spread Beyond Gangnam Across Seoul

Key points: Monthly rent contracts of 3 million won or more for Seoul apartments totaled 6,570 so far this year, up 9.7% from a year earlier. Mapo District jumped more than 40% from 325 to 459 contracts, while Gangdong District (67 to 148) and Dongjak District (47 to 95) each more than doubled. Nowon, Dobong and Gangbuk districts went from one contract to 12, and Geumcheon, Gwanak and Guro districts rose 133% from nine to 21, showing that high monthly rents have spread to Seoul's outer districts. Jeonse prices for Seoul apartments have risen for 84 consecutive weeks since February last year, for a cumulative gain of 7.79%, and the average monthly rent for a Seoul apartment reached 1.64 million won as of August, up 14% from a year earlier. With the number of units scheduled for occupancy set to keep declining through 2028, analysts say the rise in jeonse and monthly rents will not easily subside.

2. "Seoul's Rental Market More Attractive Than Hong Kong" — Global Heavyweights Eye Korea Again

Key points: Global investment firms including Morgan Stanley, KKR, GIC, the Canada Pension Plan Investment Board (CPPIB) and Nuveen Asset Management have begun expanding investment in Korea's rental housing market in earnest this year. Rental housing currently operating or under development in the Seoul metropolitan area totals about 5,000 units, and the figure is estimated to approach 20,000 units when investment agreements are included. In a survey by global real estate consultancy Cushman & Wakefield, Korea scored 3.98 out of 7 in residential real estate investment preference in the Asia-Pacific region, overtaking Hong Kong for fourth place. Along with assessments that the accelerating shift from jeonse to monthly rent is turning the market into one more friendly to institutional investors, measures to ease the tax burden on corporate rental housing operators are under review, leaving the market positioned for additional inflows of global capital.

3. Mokdong Complexes 9 and 13 Advance Toward 7,810-Unit Development

Key points: Mokdong Complex 9 and Mokdong Complex 13 in Seoul's Yangcheon District cleared integrated redevelopment review on a conditional basis, launching a rebuilding project of up to 49 stories and 7,810 units in total. Mokdong Complex 9 will comprise 3,958 units and Mokdong Complex 13 will comprise 3,852 units, with a public pedestrian passage secured between the complexes. Mokdong Complex 13 is also running its contractor selection process in parallel, and Samsung C&T was the sole bidder in the first and second tenders worth about 2.3763 trillion won in construction costs, making its selection likely. With rebuilding proceeding one after another at the 14 complexes in the Mokdong district, the review approval is seen as moving the project timetable forward another step.

4. Yeomri 4 and Ssangmun 2 Among Stalled Redevelopment Projects Restarting

Key points: Seoul redevelopment and rebuilding zones that had been dropped because of resident opposition and weak project viability are pushing ahead again one after another. The Yeomri 4 zone in Mapo District obtained association establishment approval this month and is proceeding with a project of up to 35 stories across 12 buildings totaling 1,120 units, while the Ssangmun 2 zone in Dobong District was redesignated at 1,919 units after going through the Fast-Track Integrated Planning program and a zoning upgrade. At Bangbae Imkwang Phase 1 and 2 in Seocho District, resident consent surpassed 75% just a month after consent forms for a restart were collected through the Fast-Track Integrated Planning program. With 163 of the 389 sites that have a history of being dropped now moving to restart, and planned housing alone reaching 128,550 units, observers say the expansion of redevelopment sites will continue.

5. Gaemi, Munhwa and Former Hongje 4 Zone to Be Redeveloped Together With 2,520 Units

Key points: The Seoul city government on the 22nd finalized a Fast-Track Integrated Planning redevelopment plan combining three villages in Hongje-dong, Seodaemun District — Gaemi Village, Munhwa Village and the former Hongje 4 zone. The plan calls for a residential complex of up to 30 stories and 2,520 units on the slopes of Inwangsan Mountain, and for restoring about 30,000 square meters of damaged mountainside as a park. Zoning for the residential land will be upgraded from Class 1 and Class 2 general residential zones to a Class 3 general residential zone to secure the supply volume. With this approval, the number of completed plans among 314 Fast-Track Integrated Planning sites rose to 201.

6. Another Setback for JR Global REIT in Rehabilitation as Audit Opinion Refusal Triggers Delisting Grounds

Key points: JR Global REIT, which is undergoing rehabilitation proceedings, received a "refusal" audit opinion in its first-half audit report, creating grounds for delisting from the main securities market. The external audit swung first-half net income from a 24.9 billion won profit to a 100.7 billion won loss, a reversal of about 125.6 billion won, caused by a full impairment of 125.6 billion won in goodwill. The company says the treatment is non-cash accounting and does not affect funding for its ARS process, but its continued listing has become uncertain since trading was suspended in April. As a public REIT invested in overseas real estate in Belgium and the United States, the case points to the need for a broader risk review by investors in overseas real estate public REITs.