'Factory district' no more: Mullae-dong apartments near W2b mark as semi-industrial zone deregulation takes hold

Record-high transactions are piling up in the Mullae-dong area of Yeongdeungpo-gu as Seoul's semi-industrial zones emerge as prime candidates for new housing supply.

According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system, an 84-square-meter unit at Mullae Xi in Mullae-dong 3-ga, Yeongdeungpo-gu, changed hands on July 9 for 1.95 billion won ($1.33 million) on the 14th floor — the highest price recorded among apartments in the southwestern semi-industrial zone, putting the complex on the cusp of the "standard-unit 2 billion won club." A 121-square-meter unit in the same complex also set a new record on June 26, selling for 2.18 billion won on the 23rd floor.

Nearby, an 84-square-meter unit at Mullae Hillstate changed hands on July 11 for 1.85 billion won on the seventh floor. Both Mullae Xi and Mullae Hillstate are older complexes — completed in 2001 and 2003, respectively — making their recent price surge all the more striking, according to people familiar with the local market.

Analysts point to deregulation of semi-industrial zones as the key driver behind rising home prices in Mullae-dong. The central government and the Seoul Metropolitan Government, which have often been at odds over housing supply policy, are for once aligned in pushing to make better use of semi-industrial land.

Seoul city announced its "Southwest Seoul Overhaul" plan in February 2024 and, from March last year, began enforcing an amended urban planning ordinance allowing floor-area ratios of up to 400 percent for apartment construction within semi-industrial zones.

The government's Sept. 7 housing supply package announced last year also included a special provision allowing reconstruction in semi-industrial zones to retain existing floor-area ratios without requiring public contributions. Kim Yong-beom, the Cheong Wa Dae policy chief, recently raised the need to make use of semi-industrial zones in Yeongdeungpo and Guro and signaled a meeting with Seoul Mayor Oh Se-hoon.

Following that, at Mayor Oh's direction, relevant city departments including the Urban Planning Innovation Team have been holding meetings to identify additional sites within semi-industrial zones where housing could be supplied.

Record prices are also emerging at complexes in Mullae-dong where reconstruction hopes are high, even before formal redevelopment zone designation. A 79-square-meter unit at Mullae Park Hansin Apartment — widely regarded as a strong candidate given its direct adjacency to Mullae Station — sold for 1.5 billion won on the fifth floor on June 13.

At the adjacent Mullae Geonyeong Apartment, a 59-square-meter unit sold for 1.18 billion won on the 10th floor on July 9, and an 84-square-meter unit fetched 1.39 billion won on the 12th floor on Wednesday — both all-time highs for the complex. Yangpyeong-dong Sindonga Apartment and Mullae-dong Gukwha Apartment are undergoing integrated review to revise their existing redevelopment plans to reflect higher floor-area ratios.

Some complexes are revisiting their project plans to capture floor-area ratio benefits despite being on the verge of receiving management and disposal plan approval. Namseong Apartment in Mullae-dong had originally planned to apply for such approval last year, but members were divided over whether to first pursue a plan revision to raise the floor-area ratio.

The association held a general meeting in September last year to gather member opinions and plans to hold another in August to decide whether to formally apply for a plan revision. If at least two-thirds of members agree, the association intends to restart the process of revising the redevelopment plan to incorporate the higher floor-area ratio.

The redevelopment project in Mullae-dong 4-ga is also picking up speed. One of Seoul's most concentrated factory districts, the area is set to be transformed into a large-scale mixed-use complex combining residential and commercial uses — with 2,176 apartment units and more than 1,000 units in a knowledge industry center planned for the site. A consortium of Samsung C&T's construction division and Daewoo Engineering & Construction has been confirmed as the contractor.

Experts are paying close attention to both the location and the development potential of Mullae-dong. Kim Je-gyeong, director of Toomi Real Estate Consulting, said: "Mullae-dong has outstanding locational competitiveness — it is close to business districts such as Yeouido and sits on Seoul Metro Line 2. With the easing of floor-area ratio restrictions improving project viability, the investment appeal of semi-industrial zones has become noticeably stronger than before."

He added that semi-industrial zones dominated by actual factories rather than low-rise villa clusters — like Mullae-dong 4-ga — stand out as particularly favorable for redevelopment, since the number of existing owners is far smaller, making project execution and financial feasibility much easier to achieve.