Sangin Prugio Center Park in Daegu's Dalseo District is drawing crowds of prospective tenants after its units were offered as jeonse (a lump-sum deposit lease) rentals through a corporate restructuring (CR) real estate investment trust. Deposits run as much as 100 million won below those at older apartment complexes nearby, and the complex is newly built. Applicants pitched tents and waited through two nights to secure a lease on a first-come, first-served basis.
More than 200 people were lined up by the time applications opened at 10 a.m. on the 8th, according to a sales official at the site. Kim Yu-gon, managing director at STHM, the sales agency handling the complex, said the line began forming on the afternoon of the 6th as owner-occupier renters sought the low-priced leases, and that more than 200 people had gathered by the 10 a.m. opening.
Price is the main draw. Deposits for 84-square-meter units were set at 222 million to 260 million won, while 113- and 117-square-meter units were priced at 300 million to 330 million won. That compares with roughly 300 million won for an 84-square-meter unit and about 450 million won for a 113-square-meter unit elsewhere in Dalseo District, a gap of more than 100 million won at the top end. Tenants can also secure a guarantee from the Korea Housing & Urban Guarantee Corporation (HUG). Leases run two years, with an option to renew for another two years for a maximum stay of four years.
The 990-unit complex was completed in 2024, but not a single unit had been sold under a presale contract. The entire complex was converted to jeonse rentals after being folded into a CR REIT program that the Ministry of Land, Infrastructure and Transport introduced to clear unsold homes in completed buildings. A CR REIT pools investor money to buy unsold apartments in completed provincial developments, operates them as rentals and sells them once the market recovers. JB Asset Management runs the vehicle for this project.
In the first round of offerings on June 17, about 420 of 549 units were leased, excluding the largest floor plans. Applications to select specific buildings and units in the second round of 441 units opened on the 8th, with formal contracts to be signed starting on the 11th.
An industry official said other CR REIT projects in Daegu have seen disputes with existing presale buyers during the conversion of unsold units into REIT rentals, but that the process went relatively smoothly at Sangin Prugio Center Park because no presale contracts had been signed.
Daegu carries the country's heaviest burden of unsold homes in completed buildings. Of 4,278 unsold apartments as of the end of July, 3,481 were in completed buildings — the most among South Korea's 17 major administrative divisions. Such units are described in the industry as the most difficult inventory to clear.
Analysts say CR REITs have limits as a broad remedy for unsold provincial housing. Lee Eun-hyung, a research fellow at the Korea Research Institute for Construction Policy, said REITs are designed to generate returns, so they have little choice but to select higher-quality properties that can deliver a certain level of profit when buying unsold apartments. The remaining units, he said, must ultimately be absorbed by the market.
