HYBE’s $400 Million Headquarters: The Heart of K-Pop

HYBE’s abrupt initiation of audits targeting executives, notably Min Hee Jin, the representative of its subsidiary label ADOR, has sparked interest.

Min Hee Jin has been revealed to have contributed to establishing HYBE’s Yongsan headquarters, influenced the increase in HYBE’s corporate value, and produced singers from other labels.

What significant contributions might Min Hee Jin have made to this towering building, valued at hundreds of billions of won in real estate alone?

According to the commercial real estate company Real Estate Planet, the AI-estimated value of HYBE’s Yongsan headquarters in Seoul is approximately 454.81 billion won ($396 million). This price is estimated using big data based on spatial information and artificial intelligence (AI) technology.

The building is conveniently located within a 10-minute walk from Yongsan and Sinyongsan subway stations, with a view of the Han River. The building has seven floors below ground and 19 above, with a total area of 18,911 pyeong (62,449 square meters or 672,000 square feet).

The interior is divided into three major sections: music and filming studios, office spaces, and welfare spaces.

It is reported that Min Hee Jin’s ideas were incorporated into this layout.

Min Hee Jin oversaw the branding and design of the building, stating that she designed it “so that all members can gain inspiration and convenience.”

ADOR has been allocated the 16th floor of the building.

However, HYBE is currently leasing the entire building. The security deposit is approximately 17.1 billion won ($14.9 million), and the annual rent is about 18 billion won ($15.7 million).

The reason they chose to rent instead of buy is believed to be due to tax considerations.

When moving into the new building, the real estate industry speculated that “HYBE chose to lease to maintain cash flow, rather than buying the building and paying double taxes by exchanging foreign currency. Their main income source is foreign currency due to the large overseas fan base of their artists like BTS.”

Indeed, following BTS’s breakthrough into the U.S. market and the start of their world tour concerts in 2017, their performance has seen a remarkable rise each year. Sales figures from 2017 through 2020 demonstrate this trend, with respective totals of 92.4 billion won, 301.4 billion won, 587.2 billion won, and 796.3 billion won.

The value of Hybe’s building is expected to increase even more.

Seoul City recently announced a development plan for the Yongsan International Business District. The project aims to develop Yongsan Station’s railway vehicle business site and surrounding areas to make Yongsan the new economic hub following Gwanghwamun, Gangnam, and Yeouido.

HYBE, located next to this area, will benefit from increased real estate value.

Thanks to its distinct identity, HYBE’s presence as the agency of BTS has notably spurred the rejuvenation of the neighboring business district. The Yongsan Lee Dan Road, stretching from Sinyongsan Station to the Samgakji area, has evolved into a sought-after global tourist destination, drawing in many international visitors.

Meanwhile, ADOR was established in 2021 when the Source Music label business division was physically split off.

HYBE owns 80% of the shares, and ADOR executives, including Min Hee Jin, hold the remaining 20%.

Despite revenue of 18.6 billion won and an operating loss of 4 billion won in 2022, the company turned a profit last year with revenue of 110.3 billion won and an operating profit of 33.5 billion won, thanks to NewJeans’ success. They also turned a net loss of 3.2 billion won into a net profit of 26.5 billion.