Exclusive
CJ Group Chairman Lee Jay-hyun Lists Seocho-dong Commercial-Residential Building for 43.8 Billion Won

[비즈한국] It has been confirmed that CJ Group Chairman Lee Jay-hyun has recently put a commercial-residential building in Seocho-gu, Seoul—an area slated for large-scale development—on the market for 43.8 billion won. Chairman Lee purchased the building for 26 billion won at the end of 2021. If the deal goes through, he stands to realize a capital gain of 17.8 billion won in about three years.

According to the real estate industry, CJ Group Chairman Lee Jay-hyun recently listed the commercial-residential building he owned in Seocho-dong, Seocho-gu, Seoul, for 43.8 billion won. The building was constructed in March 2009 near Yongheori Neighborhood Park, southwest of Gangnam Station, featuring three floors above ground (909㎡ land area, 599㎡ total floor area). It is a commercial-residential structure combining multi-household housing and commercial units. Chairman Lee acquired the building in November 2021 for 26 billion won. Given that there were no mortgage rights established on the property at the time, it appears the transaction was settled entirely in cash. The building is currently vacant.

The building is located within the "Seocho-ro District Unit Planning Zone," which is slated for large-scale development. The Seocho-ro District Unit Plan is an urban development project aimed at transforming the Seocho-daero area (600,000㎡) between Gangnam Station and Seocho Station on Subway Line 2 into an international business and commercial hub. Currently, five districts—including the Lotte Chilsung, Kolon Sporex, Lion Sewing, Samsung Town, and Jinheung Apartment sites—have been designated as special planning zones and are undergoing development. Chairman Lee's building is located in a second-class general residential area between the Lotte Chilsung and Kolon Sporex districts.

An official from the Seocho-gu Urban Planning Division stated, "The site is not included in the five districts designated as special planning zones, so there is no need to establish a separate development plan. It is subject to the same regulations as standard plots of land."

If the sale is successful, Chairman Lee Jay-hyun will have generated a capital gain of 17.8 billion won in about three years. However, analysts suggest that it will be difficult to find a buyer willing to accept an asking price nearing 168% of the purchase price from three years ago during a real estate downturn. A real estate industry insider remarked, "While there are favorable development factors nearby, such as the Lotte Chilsung site, commercial facilities and infrastructure have not yet been expanded, and the asking price is high. Therefore, it seems difficult for a deal to be reached unless the price is adjusted. The market situation is poor enough that properties purchased between 2021 and 2023 are often being listed at lower prices."

Chairman Lee Jay-hyun is the largest shareholder of CJ Corporation, the holding company of CJ Group. As of the end of September last year, he held a 42.07% stake in the company. According to the Fair Trade Commission, as of 2022, Chairman Lee served as a non-registered executive at five companies: CJ, CJ CGV079160, CJ ENM035760, CJ Logistics000120, and CJ CheilJedang097950. He received approximately 22.14 billion won in remuneration over one year from three of these companies: CJ, CJ ENM, and CJ CheilJedang. A non-registered executive is an officer not listed on the corporate registry who has the authority to participate in management but is free from legal liability as they do not participate in board activities.