Redevelopment projects in station areas across Seoul are picking up speed. Station-area redevelopment targets blighted neighborhoods around subway stations and is a maintenance program that induces high-density development by upgrading zoning and easing floor area ratios. With strong profitability and faster progress thanks to simplified permitting in recent months, investment is also becoming more active. Experts advise carefully reviewing the redevelopment consent rate, the transfer of association member status, and cost sharing.
According to the maintenance industry on the 8th, Korea Real Estate Investment & Trust Co. (KOREIT), the operator of the station-area revitalization and redevelopment project for the area around 252-15 Sadang-dong in Dongjak District on Line No. 7 Namseong Station, filed for integrated deliberation with the Seoul city government at the end of last month. It has been less than a year since the designation of the maintenance zone in Jan. last year and the appointment of the project operator in Mar., which is unusually fast considering that it typically takes around five years. After passing the integrated review, a builder will be selected in the second half of this year. The Namseong Station station-area revitalization redevelopment will develop 669 units of multifamily housing up to 38 stories and 23 officetel rooms.
The station-area revitalization and redevelopment project for the area around 52-6 Galwol-dong in Yongsan District on Line No. 4 Sookdaeipgu Station is proceeding with the process of appointing a project operator after the designation of the maintenance zone in Aug. last year. The preparatory committee began collecting consent forms on the 5th to designate a real estate trust company as the project operator. A total of 870 apartment dwellings are planned from four basement levels to 40 stories above ground, including 183 long-term jeonse dwellings and 37 mandatory rental units for redevelopment.
Projects backed by the government are also gradually gaining momentum. The station-area revitalization project for the area around 298-9 Hongje-dong in Seodaemun District on Line No. 3 Hongje Station saw various attempts, including resident-led association-type maintenance projects, over about 20 years but made no progress. After being selected in Nov. 2023 as a Seoul station-area revitalization target site, Seodaemun District pushed the effort and completed the maintenance zone designation, maintenance plan decision, and project operator appointment in 1 year and 9 months. The district office has stepped in directly as the operator and is steering the project. It is the first case in the country. Seoul Housing and Urban Development Corporation (SH) will also participate as a co-operator. The area around Mok-dong 523-45 at Line No. 9 Yeomchang Station, the first station-area revitalization site with SH participating as a public operator, was also designated as a maintenance zone in Nov. last year, putting the redevelopment on track.
Experts stressed that investors should avoid "blind investment" driven by expectations for maintenance projects and should look for sites with high consent rates. Nam Hyeok-u of Woori Bank Real Estate Research Institute said, "You need to keep in mind that if the opposition consent rate reaches just 25%, the association can be dissolved at any time and the redevelopment project can return to square one," adding, "Areas with many commercial facilities tend to have high opposition, so it is better to invest stably in places where residents are highly motivated, preferably in higher-grade locations." Nam said, "Rather than fixating on listings that require little capital, choose properties suitable for long-term holding and even actual residence."
They also advise noting that, after the Oct. 15 real estate measures were announced, transfers of association member status have been partly restricted. As all of Seoul has been designated a regulated area, transfers of association member status are restricted after association establishment approval. For one-household, one-home owners who have held for more than five years and actually lived in the dwelling for up to three years, succession is allowed.