Lotte officetel assessment drops

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Lotte officetel assessment drops

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Officetels in Lotte World Tower will be assessed 6 percent lower in 2020 even though the average assessed value for all officetels will rise 1.36 percent.

The assessed value is determined by the government and is used by the National Tax Service to calculate capital gains, inheritance and gift taxes. This assessed value is different from the value used for property taxes.

A total of 749,221 officetels, which are studio apartments, were assessed, and the assessed value is 83 percent of the market value, up from 82 percent this year.

The most dramatic rise was in Seoul, where the assessed values rose 3.36 percent. In Daejeon, the increase was 2.03 percent, while in Sejong, assessed values declined 4.41 percent. The values declined 2.22 percent in Ulsan.

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Lotte World Tower in Jamsil, Gangnam, in southern Seoul where the high-end officetel Signiel Residences are located on the 44th to 70th floor of the 555-meter (1,820-foot) skyscraper. [YONHAP]

The assessed value of Pie’n Polus, located in Cheongdam-dong, Gangnam, will rise 6.28 percent, the sharpest increase.

The only drop is at the Signiel Residences, the officetel located within the Lotte World Tower. The Signiel Residence rank No.1 by assessed value among officetels in the country.

The officetel, which was completed in 2017, is on floors 44 to 70 of the 555-meter (1,820-foot) skyscraper in Jamsil, southern Seoul. It has 223 officetels, with floor areas ranging between 133 square meters (1,432 square feet) and 829 square meters.

The officetel’s average assessed value for next year is 8.6 million won per square meter. For the largest studio, at 829 square meters, the assessed value fell 3.38 percent from 11.03 million won per square meter this year to 10.6 million next year.

That’s 900 million won less in overall value, from 23.5 billion won.

The smallest studios on the 44th floor, at 133 square meters, are being assessed at 7.4 percent less, from 8.38 million won per square meter to 7.76 million won per square meter.

The Korea Appraisal Board, which conducted the assessment, said the lower value was largely because the officetel’s market value has declined due to low sales.

Despite being completed three years ago, only 30 percent of the officetels were sold, while some have been offered at a discount, the appraisal institution said.

In April, a 208-square-meter officetel in the Lotte Skyscraper was sold for 6 billion won. That was 400 million won more than the previous year, when an apartment of the same size was sold for 5.6 billion won. Two 205-square-meter studio apartments in the same building were sold for 6 billion won in October, which was higher than the 5.5 billion won in February 2018.

The taxable assessed value of the 208-square-meter apartment fell 200 million won, while for the 205-square-meter apartment it was down 400 million won.

The JoongAng Ilbo found that 40 percent of the officetels, or 80 units, have been sold so far, higher than the 30 percent claim by the Korea Appraisal Board.

On average, the actual market value of the officetels were between 6 billion and 7 billion won. A 3.3 square-meter area on average is valued at 70 million won.

The market value on the most expensive officetel in the skyscraper, which is a 489-square-meter studio that takes up the entire 68th floor, was 22 billion won. That’s 100 million won for each 3.3 square meters.

The most expensive apartment sold in Korea this year is at Hannam The Hill in Yongsan, central Seoul, where a 244-square-meter unit was sold at 8.4 billion won. This translates to 84 million won for every 3.3 square meters.

The rent on Lotte skyscraper officetels is high. So far, six tenants are renting the studio apartments.

The jeonse ,or long-term deposit, on a 247-square-meter apartment is 5.5 billion won, which is equivalent to 65 percent of the sale price.

The most expensive jeonse deposit for apartments this year is at the Sangji Ritzville Caelum 2 in Cheongdam-dong at 4.5 billion won for a 244-square-meter apartment.

The jeonse price on a 247-square-meter apartment in the neighboring Hyosung Villa was also 4.5 billion won.

The most expensive rent for a Lotte Tower officetel is 21.3 million won.

BY AHN JANG-WON [lee.hojeong@joongang.co.kr]
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