Rising office market in Seoul – MagokDecember 11, 2019 / By
Seoul has many emerging office areas, such as Pangyo and Sangam, which could potentially stack up against the city’s three core office districts – CBD, Gangnam and Yeouido. On this front, Magok is a latecomer but has recently gained a great deal of traction due to the Seoul Metropolitan Government-led development on 3.66 million sqm of land, six times the size of Digital Media City (DMC) and 1.3 times the size of Yeouido. Magok, which used to be a rice field, now houses Korea’s conglomerates, such as LG, Lotte, Kolon and S-Oil, and is expected to develop into a major business district in western Seoul, housing 160,000 workers by next year.
There are a variety of compelling factors behind the success of Magok
- Strong government support: As the development is led by the Seoul Metropolitan Government, there are significant incentives on offer. Tenants moving in will get a 75% reduction in acquisition tax and 35% in property tax until the end and companies with foreign investment will get cash support.
- Knowledge industry cluster: Magok was created as a research complex considering convergence among high-tech technologies. It is comprised of global R&D centres and research institutes, which can create synergy among tenant companies, as well as facilitate joint research projects between large and small companies.
- Location conditions: The location benefits from strong public transport connections across Seoul via subway lines 5 and 9, and the Airport Railroad. Magok also adjoins the Olympic Highway and Southern Circulation Roads, which makes it easy to move to downtown and Gyeonggi-do.
- Financial benefit: To attract tenants, the government has allowed land to be sold at discounted prices, often 50% lower than the fair market price.
- Convenient amenities: Ewha Hospital opened in 2018 and Seoul Botanical Garden, 70 times the size of a soccer field, opened earlier this year. Large-scale shopping facilities including Starfield Magok retail mall are also planned.
Magok is compared with a strong rival, Pangyo.
Magok is often compared with the Pangyo business district. However, Pangyo was created as an IT, BT, and CT cluster, while Magok is regarded as a prominent R&D center with a focus on convergence. Another difference between Magok and Pangyo is the overall stock. The office supply area of Magok is about 1.7 times larger than Pangyo Techno Valley although the number of companies is much smaller. This is because Magok was established as a complex area, more focused on large businesses than Pangyo. Conglomerates accounted for only 3% of occupants in Pangyo, while at Magok, they account for about 32% of the companies .
In the future, Magok plans to become the largest high-tech industrial cluster. With that intent, the Government is planning to attract many small and medium-sized enterprises, as well as large conglomerates by preparing public support centers and knowledge industry centers.
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