The site of the headquarters of CBS (Christian Broadcasting System), a Korean broadcaster, in Mokdong, Yangcheon District, Seoul, will be converted into a residential complex combining officetels — studio-to-midsize units used as either a home or an office — and senior housing. The developer has revised an earlier plan to build a knowledge industry center for broadcasting and media firms. With Mokdong Yunseul Xi, a residential officetel project on the former KT Mokdong site, drawing strong subscription demand in its recent offering, the CBS site's shift toward officetels has renewed attention on so-called apartels, or officetels marketed as substitutes for apartments.
A revision to the detailed development plan for the CBS site at 917-1 Mokdong is open for public review, the Seoul Metropolitan Government said on the 23rd. The revision calls for adding 244 officetel units and 55 senior housing units.
Reflecting the city government's push for housing suited to single-person households and newlyweds, a substantial share of the units is expected to be small and midsize homes of 60 to 80 square meters of exclusive floor area. CBS plans to complete construction permit procedures and break ground within a year. The 55 senior housing units will be supplied as long-term private rental housing with a mandatory 10-year lease period, and will follow the facility and operating standards of the city's Senior Safe Housing program.
CBS had originally planned to build a knowledge industry center and neighborhood facilities on the 6,730-square-meter site to house broadcasting and media companies, creating a "new media startup hub." But as the slump in knowledge industry centers became entrenched over the past two to three years, the company shifted to a mixed-use development that retains media-related functions while adding officetels and senior housing, following preliminary negotiations with the city. Development density remains unchanged, with a floor area ratio of about 800% and a maximum height of 170 meters.
Demand for high-priced residential officetels has been growing in Mokdong, where the CBS site is located. In subscriptions held on the 8th of this month, Mokdong Yunseul Xi drew 3,788 applications for 651 units, an average ratio of 5.8 to 1 and a high of 8.7 to 1. The complex consists of midsize to large units ranging from 114 to 203 square meters.
"Mokdong has a fixed base of demand from people who want to live there for the school district or for jobs across the southwestern part of the city," an industry official said. "The fact that even the lower floors, which are relatively less preferred, sold out quickly shows there is considerable owner-occupier demand that has been waiting for new residential products in Mokdong." The official added that "the CBS site is adjacent to Hyperion, giving it a strong location, and demand from households relocating for Mokdong rebuilding projects should be high by the time it is completed." As of the same day, only one jeonse (a lump-sum deposit lease) listing was available among all 466 units at Hyperion I.
Rising apartment prices and mortgage curbs have raised the profile of officetels in prime locations in Seoul and the surrounding metropolitan area. In the fourth quarter, 5,666 units are scheduled to be offered at eight sites nationwide. Cheongna Arc One Prugio (987 units), Hillstate Seongnam Metroble (189 units) and The Sharp Osan Station Arc City (90 units) are expected to draw strong interest from owner-occupier buyers, as they consist of midsize to large units of 74 to 136 square meters.
Officetel sales transactions nationwide totaled 18,035 in the first half of this year, up 8.24% from a year earlier, according to Real Estate R114. Transactions of officetels larger than 60 square meters rose 21.44% from the second half of last year. Prices have also been climbing, led by midsize and large units. The sales price index for officetels of more than 60 square meters and up to 85 square meters rose for a second straight month after July. Units larger than 85 square meters have risen for 11 consecutive months after turning higher in October last year.
Industry watchers expect a selective recovery centered on midsize and large officetels in areas where apartment prices are burdensome and housing demand has been proven. They say the scarcity value of new officetels with adequate living conditions will grow as deregulation allows product improvements such as larger usable floor space through the installation of windows on balconies.
"Demand in the officetel market has been recovering recently, led by midsize and larger products suitable for owner-occupied living," an industry official said. "With new supply also declining and the available options limited, there is a strong chance demand will flow selectively into new officetels that offer adequate living conditions."
