Recent report shows that Super Junior‘s Choi Siwon has lost a considerable amount of money through his real estate business venture.
Super Junior’s Choi Siwon, currently serving as a conscripted policeman in South Korea’s mandatory military service, had purchased a two-story building roughly 68 x 90 square meters in Apgu-jeong’s Rodeo Street, September 2015.
The building was 40 years old, with surrounding buildings priced at around 30 million won (roughly $25,000 USD) per 3.3m²; however, it was revealed Choi Siwon had purchased that building for 40.03 million won (roughly $33,500 USD) per 3.3m², 30% higher than the market value.
By renovating the building, Choi Siwon aimed to hit two birds with one stone: raise the market value and obtain a profit margin. In order to achieve this goal, he invested 200 million won of his own, and took out a loan of 900 million won to renovate the building into a modern three-story building.
In August of 2016, the building was completed; however, there had not been one single tenant since then. Monthly loan payments are currently 2 million won (roughy $1600 USD), but has no tenants to help pay the loan off.
After evaluating the purchase price, market value, and commercial supremacy of the building’s district, Choi Siwon believed the building was in a prime location for growth, and therefore purchased the building in hopes of the area expanding and rising in price.
One of the main reasons why there were no tenants was due to the small floor area, in which each floor only had an area of 40 square meters. This restricted many different types of businesses from renting the space to conduct business, as it went against rules and regulations.
Furthermore, the roads and streets surrounding the buildings were only 4 meters wide, and so the area is not dynamic. This deterred businesses from setting up shop, as most of the area was used for residential housing rather than businesses.
Currently, the building is for sale at 2.7 billion won (roughly $2.3 million USD), however with the surrounding market value, it seems there will be difficulty in selling the building even after lowering the price by a billion won (roughly $830,000 USD).
Source: Chosun
